Economic Impact of Earthquake – Tourism

Key Tourism Products Damaged

The April 25th earthquake which occurred right in the middle of Nepal’s spring trekking season, brought the season to an abrupt halt.  Nepal’s key tourism products including UNESCO world heritage sites: Basantapur Durbar Square, Patan Durbar Square, Bhaktapur Durbar Square, Swayambhu Nath and Boudha Nath have all seen major damages. Furthermore, trekking regions like Langtang, Manaslu, Gantesh Himal, Ruby Valley and Rowling have also faced severe damages, all of which will require substantial time and money to rebuild and re-establish. Additionally, trekking routes face further damages with the threat of landslides.

However, on a positive note, there are various other trekking routes and tourist destinations such as Pokhara, Chitwan, and Lumbini, which have not witnessed major damages and are fully capable of hosting tourists. The same goes for certain ancient heritage structures which still stand intact. While many of these heritage sites cannot be visited anytime soon, it is heartening to know that numerous structures remain unharmed.

Impact on Tourism Earnings

Nepal’s high end tourism that was badly hit last season due to the Everest Avalanche is yet again in jeopardy as the earthquake triggered another avalanche killing 19 people, bringing the climbing season to an unprecedented end. The government earns approximately USD 3.5 million in climbing fees from Everest alone, whereas a single guide on Everest earns USD 6,000-7,000 during a single season. World Travel and Tourism Council data shows that Nepal’s tourism accounts for 4.3% of the national GDP and 3.5% of total employment generating 487,500 jobs in 2014. The tourism sector has substantial backward and forward linkages that directly benefit rural economy, as locals get better access to revenues generated by local tourism. In this case, ensuring that tourism picks up in areas that have been hard hit by the earthquake will help communities get back on their feet.

Post-earthquake, reportedly 80% of hotel reservations have been cancelled and an estimated 45,000 tourists have left the country. While hotels in the capital still have a relatively good occupancy rate, the rooms are occupied by foreign rescue teams, media personnel and members of international agencies.

Joint Efforts of Government and Private Sector

The Government of Nepal and private sector have five months to prepare for the autumn tourist season which begins in September.  The crucial task here is to identify and assess the damages to the country’s tourism products and to strategically reconstruct and rehabilitate the areas as per tourism priority. The recently formed Tourism Recovery Committee (TRC) has been tasked with minimizing the repercussions of the earthquake in the tourism sector. Under the TRC, private sector associations have been tasked with submitting a status paper on their sectors. This is an encouraging initiative to bring together the government and the private sector and jointly work towards reviving the tourism industry. There should be continued collective efforts from these parties to eliminate fear among potential incoming tourists regarding the safety of the country and also availability of tourism products. A strategic communication should be initiated to project the true situation of the country post-earthquake, as the current portrayal through major news portals leaves behind the image of a severely devastated country unfit for tourism.

Creative Alternatives

To temporarily revive the tourism sector during the reconstruction phase, the private sector can look into the prospect of disaster tourism wherein packages can be designed with a combination of earthquake hit tourist sites and unharmed tourist destinations. Tour guides can be trained to provide narratives exhibiting the resilience of the people and the country. This will not only add value to the experience but will also draw a different set of tourists to the country.


Tourism will be hit in the short term, but with a majority of the tourism market comprising of domestic, Chinese, and Indian tourists, the focus will have to be placed on reviving these as other markets may take time to revive. The drive around social media along with the international promotion that Nepal is receiving on tourism will help to counter the absence of concrete revival plans from the government or the private sector. Investment in the tourism sector may be affected by the wait and watch mode on large investments. Further, major investments in the hotel sector will have to be reviewed as the government will come with more stringent directives on building code and construction.