Around 150 mid-range hotels in Nepalgunj have closed in the past three years due to declining business activity. While high-investment star hotels are increasing, mid-range hotel businesses are struggling. The closures have led to job losses for hundreds of workers, according to hotel entrepreneur Bhim Kandel.
Despite hopes for recovery after the COVID-19 pandemic, about 150 mid-range hotels have shut down, and even star-rated hotels are facing difficulties. Kandel, who is also the first vice president of the Hotel Entrepreneurs’ Federation, Lumbini Province, stated that many hoteliers have either moved abroad or returned to their villages due to financial struggles.
Rangbahadur Khadka, president of the Banke Hotel Entrepreneurs’ Federation, said that the economic slowdown after COVID-19 has severely impacted the hotel industry in Nepalgunj. Hotels only experience full occupancy on one or two days a month, making it difficult to cover rent, loans, interest, and employee wages, forcing many to shut down.
Nepalgunj has numerous mid-range hotels with investments ranging from NPR 200,000 to NPR 20 million, and their closure has resulted in significant job losses. According to Tanka Dhami, president of the Nepalgunj Chamber of Commerce and Industry, the relocation of provincial government and non-government offices to Butwal and Dang after federalism’s implementation has reduced business activity in Nepalgunj. He emphasized the need for provincial and local governments to introduce relief packages to support the struggling hotel industry.
