Hotel and Tourism Industry Analysis Post-COVID in NEPSE

The hotel and tourism industry in Nepal suffered one of the most severe blows during the COVID-19 pandemic. Travel restrictions, lockdowns, and global fear of movement brought the entire hospitality business to a standstill. Major hotel chains in Kathmandu, Pokhara, and Chitwan recorded near-zero occupancy for months, leading to staff layoffs, loan defaults, and halted expansion projects. However, as borders reopened and international travel gradually resumed, the sector began its long path toward recovery — a trend now reflected in the NEPSE Hotel & Tourism Index, which has seen consistent improvement since mid-2023.

In the post-COVID era, the sector’s recovery is being fueled by several key factors. First, the rise in tourist arrivals — with Nepal welcoming over one million tourists in 2024 — has significantly boosted hotel occupancy and cash flow. Second, the domestic tourism market has strengthened as Nepalis increasingly engage in local travel, weekend getaways, and pilgrimage tourism. Third, government initiatives promoting “Visit Nepal Decade” and the development of new international airports in Pokhara and Bhairahawa have created optimism for long-term sectoral growth.

From a fundamental analysis perspective, investors evaluating hotel and tourism companies listed in NEPSE should focus on several key indicators. Revenue per Available Room (RevPAR) and Average Daily Rate (ADR) show how well hotels are utilizing their capacity. Debt-to-equity ratio and interest coverage ratio reveal how companies are managing debt accumulated during the pandemic. Operating profit margin, cash flow from operations, and occupancy rates help determine whether a company’s business model is recovering sustainably. Meanwhile, dividend payout trendsindicate long-term profitability and management confidence.

Despite recovery, challenges persist. The industry remains highly seasonal and sensitive to political instability, natural disasters, and global crises. Many hotels still face debt pressure, especially those that borrowed heavily to survive lockdowns. Inflation and labor costs have also reduced profit margins, and the oversupply of rooms in urban areas like Thamel and Lakeside continues to restrict pricing power.

According to Sandeep Kumar Chaudhary, Nepal’s leading Technical and Fundamental Analyst and founder of the NepseTrading Training Institute, “The hotel and tourism sector represents Nepal’s soft power — it reflects both economic growth and national image. Investors must evaluate balance sheet strength, occupancy recovery, and cost control before investing in tourism stocks.” With over 15 years of banking and market experience, Mr. Chaudhary trains traders and investors to analyze the hospitality sector through a blend of financial data, macroeconomic insight, and long-term demand patterns — empowering them to identify strong, fundamentally sound opportunities within NEPSE’s tourism category.