Prithvi Bahadur Pandé is the chairman of Nepal Investment Bank Limited. He is one of the most renowned bankers of Nepal, a pioneer in the commercial banking sector, who took over the French managed Indo-Suez Bank and successfully operated it for more than 15 years.
He is also the Chairman of Chhaya Centre, a multi-storied commercial building located in Thamel, which hosts the world-renowned Starwood's Aloft Kathmandu, a five-star hotel. Though a banker through and through, Pandé has also been involved in the tourism sector. He spoke to Terence Lee about his involvement in tourism and what his expectations are for the industry in a post-COVID world: Excerpts:
As a banker what led you to venture into tourism?
I have been a banker my entire life. I have always looked at what the real issues of the country are. I have always looked at how we can help the economy.
We started a bank I think when there were hardly any private banks. That created a lot of momentum in the economy. A lot of private banks opened up, development banks entered the market and the contribution to the country was actually huge. So the whole thing is about the economy and at the end of the day, how to provide employment to our citizens. So I looked at a couple of things where we could help Nepal’s economy.
Also, I have reached an age where we are more or less retired. Let’s say you pass 60, that does not mean you are retired, you may only retire from a 9 to 5 job. Actually, the most productive time in a person’s life is between the age of 60 and 70, and research has shown that. The most productive time doesn’t mean only when making money. You now follow your passion. It’s the time you give back to the country. In life you go through all these struggles, you have the networking, you have the contacts, you have the capital, and you have the reputation, so in terms of contribution to the economy, contribution to society or arts and crafts it is much more productive.
I actually retired from active banking at the age of 58 so it’s been at least seven-eight years now, but that doesn’t mean I have completely retired.
I was and am always ready to contribute in other ways. Nepal is known for a few obvious things so why reinvent the wheel. We started with a small 10-megawatt hydropower project so that we could learn the business. After that we started our own project, a 22-megawatt project, which is online.
We are also trying to get into education but it is still in the preliminary stage. I think education is important. Nepal can be a hub for education due to its proximity to northern India and for our climate. We never look at climate being an asset but it is.
And last but not the least, we said we should get involved in tourism. One of the major reasons was that it helps in generating employment. If you go by the statistics they show that one tourist contributes to one person getting a job and the cascade will be that five people benefit from that. I have always looked at this perspective of trying to see how we can create more employment.
What was the plan and vision you had to enter the hospitality sector?
We started with a hotel here, Aloft, which is a 5-star hotel but pre-COVID our idea was to get into high-end hotels. We started to talk to Luxury Collection, Starwood, which has been taken over now by Mariott and we even signed a memorandum of understanding to open a luxury hotel in Nagarkot and to go up-scale.
What I also realised is that everyone is looking at the 100-dollar hotels and by the time it comes out, it averages 80 dollars and so it is difficult to sustain. I feel it is better to go high-end and target to save 300–400 dollars. Bhutan has done that and they have survived it. Everyone talks about Bhutan being more pristine but I think we can also do the same thing.
When I said that we will establish a hotel at 400 dollars, people said it will not work in Nepal. But has anyone tried? We are not talking about 500-room hotels, we are taking about 70–80-room hotels and I perennially go by intuition.
I think we can fill up 70–60-room hotels easily at 400–500 dollars. I think this type of idea will work in Nepal, though it may not work in Kathmandu valley, because Kathmandu comes with a lot of issues and pollution and all that. But I think we can look at the periphery – Kakani, Nagarkot, Dhulikhel or other areas.
How do you see the tourism industry recovering in the post-COVID era and what should we be focusing on with so much uncertainty?
There are two types of markets now we are looking at – one is the foreign market and the other is the domestic and Indian market. I want to actually concentrate more on the Indian and domestic market. The COVID has taught us a lesson.
We have the vaccines now and people are saying their efficacy is actually only 60–70 percent. You may not end up in the hospital but you could still transmit it so COVID hasn’t really ended. It will subside but it will take time. I personally think the impact of the virus will go on for the next 10 years.
I think we need to focus on domestic tourism. Some talk about Kathmandu but the problem is people will not visit Kathmandu again and again. For domestic tourism, people will look for places beyond Kathmandu.
Aloft is a venture which is a business hotel cum shopping mall. Pre-COVID, things were well on track. Our room sales were increasing and we had good bookings for February and March and the banqueting was doing very well. We maintained certain rates and things were looking hunky dory until the bolt from the blue.
Now obviously we are in the same boat as all the others in tourism. There are mixed feelings. People are saying that once everyone is vaccinated, which will take at least one to two years, tourism will come back with a vengeance. In a way it may be true because we are all cooped up and of course we look forward to travelling even if just domestically. Personally, I think our future salvation is actually marketing ourselves in India.
What about China?
Yes, but I would say India first. What you have to understand is that India is next door. Indians don’t need visas to come here and can just drive across the border. The real Chinese market is nearly three hours away by plane.
If you look at India then the north of it is accessible to Nepal by road or plane and the air fares are cheaper. Nepal is in the centre of north India, look at the map, you can come from even Bangladesh.
So we are being stupid. The tourism board is constantly promoting Nepal in Europe and America but India has a middle-class population in the range of about 400-500 million people and that’s the whole of Europe and half the population of America. Indians have the money to spend and that’s why I’m saying that the middle-class needs to be focused on. The regional airports that the government is establishing in Pokhara and Lumbini are a good thing.
Do you think Nepal Tourism Board is doing enough in terms of marketing post-COVID? Now we understand that they don’t even have the budget.
I think the main source of their funds is from the tourists coming in and the taxes. So it’s understandable that they don’t have the funds but I’m sure they must have reserves.
I don’t know the balance sheet of Nepal Tourism Board but I’m sure they have some reserves. I believe that when you make more profit, you don’t go to the government and ask them to tax you more. So in business when you are in trouble, you also shouldn’t go knocking at the government’s door too much.
Of course, you expect a little bit of help but you’re doing business and business comes with all sorts of risks. I am not in a position to say whether they are doing good or bad but I would tell them to please pay more attention to India and then China and South East Asia.
No one is going to now fly 12 hours for a holiday for the next couple of years. Even Europeans are going domestic or to neighbouring countries, so why will they spend more money and travel to Nepal.
Our focus should be on regional tourism. Our first priority should be India, then Bangladesh and SAARC and then China. Focus, put your blinkers on and concentrate on India. Concentrate on getting flights in from Varanasi, Lucknow, Patna and Kolkata. India has a lot of airports and especially now with Pokhara and Lumbini regional airports we should look at this.
Do you think we need a tourism master plan and what should it include?
If you want to have a real tourism plan, you should concentrate not only on Kathmandu or Pokhara. You should also concentrate on other valleys and areas and develop them.
Look at western Nepal and its proximity to Delhi. When the roads and infrastructure in India soon improve, you could come from Delhi to the border in two hours. Why isn’t the government looking at developing our roads to go up to the hills, to go north – from Bhairahawa to Palpa, Tansen and from Butwal to Pokhara. We need to make tunnels. Now Janakpur is coming up. Have these hubs and roads to go up to the hills.
I would again say I am going back to education. We missed a great opportunity in the early 80’s by not opening schools here when there were issues in India. At that time there were lots of Indian schools interested. Tourism and education go hand in glove. Even now the government should concentrate on building roads and tunnels that connect the borders to the hills within an hour’s drive.
For instance, within an hour from Bhadrapur one can travel from a blistering hot location to cool hills. So, we should develop such road infrastructure because in India eight months of the year is hot. Develop these areas where the local people can benefit from tourism. I’m not talking about 5-star hotels but the whole idea of tourism is that it must trickle down and provide employment so that people do not have to go abroad for employment.
Nepalis are now quite well-trained. They have worked abroad but if you offer them a reasonable salary or opportunity why would they want to go work in foreign lands.
We need luxury hotels but not concentrated in one area. Look towards Ilam, western Nepal, the Rara area. The government should concentrate on roads and tunnels. Even though the investment is going to be huge it is the future of the country.
Do you think we can survive on domestic tourism and what else needs to be done?
Hotels on the outskirts of Kathmandu valley are doing well. Nagarkot too is doing well but it took five years to make a road which is an embarrassment to everybody. Nagarkot in my opinion is under developed so my focus actually is going to be Nagarkot. Since we have some land there I have told my children to develop something there for the luxury market.
We have the third-highest mountain Kanchenjunga in the east but there are less than 1,000 tourists going there and that’s an insult. I think people are travelling domestically and we will have to focus on them and India.
Looking at the banks and tourism what kind of correlation do you see now that the tourism industry is badly hit?
As I just said the after effects of COVID is something nobody knows and nobody can predict accurately just what will happen next. In tourism they say it will come back with a vengeance but nobody knows when.
It could take a few years but tourism is the biggest industry in the world so our country’s focus should be on that. I feel every industry is in trouble. Tourism is a bit more but their cash comes to banks. The focal point is the banks and banks are lending money here there and everywhere. So banks are also affected.
Yes, the interest rates have come down, some by choice, some due to government intervention, which is good. The government is doing its best but we can’t expect them to do everything. Certain old hotels are thinking of rebuilding and coming back to compete, and this is an opportunity for them to actually refurnish maybe over the next two years.
Personally I feel if we plan well, we can easily hit two to three million tourists a year. Our contribution to the GDP from tourism is negligible. It should be minimum 12 percent but at present it is not even half of that. We need to plan our products now and develop them with a broad vision.
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