Atrium Hotel Private Limited is developing a luxury hotel project in Birtamod. The cost of the luxury hotel being developed by businessman Durga Prasai in Birtamod, Jhapa, is expected to rise further from its initial estimate. The company had initially estimated the total project cost at Rs. 2.843 billion. However, the estimated cost was later increased to Rs. 3.298 billion after the company expanded the project scope and increased the number of hotel rooms.
The Atrium Hotel project is now expected to face further cost pressures due to additional civil, mechanical and furniture-related works, design modifications and the expansion of facilities in the banquet and casino areas. The extension of the construction period is also expected to increase interest expenses, further raising the overall Atrium Hotel project cost.
Number of Rooms Increased from 96 to 98
The hotel was initially planned with 96 rooms. However, the company has increased the number of rooms to 98 as part of the project expansion. Along with the additional rooms, the company has also revised the design and expanded several facilities planned for the hotel. The Atrium Hotel project is expected to include restaurants, a swimming pool, conference and banquet halls, a spa, casino and other luxury hospitality facilities.
Construction Work in Final Phase
The construction of the hotel has progressed significantly and is currently in its final phase. However, challenges remain in completing the Atrium Hotel project within the previously estimated cost and schedule. The additional construction work, design changes and extended construction period have created further implementation risks. The increase in interest expenses during the extended construction period is also expected to put additional pressure on the total investment required for the Atrium Hotel project.
70:30 Debt-to-Equity Financing Structure
The project has adopted a debt-to-equity financing structure of 70:30. Under the financing plan, approximately Rs. 2.37 billion is expected to be financed through debt, while the remaining 30 percent will be financed through the promoters’ equity contribution. The company has already arranged approximately Rs. 2.369 billion in financing for the project. It has also obtained a rating for long-term borrowing of Rs. 2 billion.
Hotel Targets Indian and Regional Tourists
The hotel is strategically located in Birtamod, a major commercial centre in eastern Nepal. It is approximately 12.9 kilometres from Chandragadhi Airport and around 30 kilometres from the Nepal–India border at Jogbani. The project is also located approximately 57 kilometres from the tea-growing areas of Ilam.
Its proximity to the Indian border, airport and popular tourism destinations indicates that the hotel is expected to target both domestic visitors and tourists from India. The location is expected to provide the hotel with access to business travellers, tourists, pilgrims and visitors travelling through eastern Nepal.
Market Competition and Long-Term Operating Risks
Although the hotel project is nearing completion, its long-term financial performance will depend heavily on its ability to attract customers and maintain a sustainable occupancy rate after commencing operations. Large-scale luxury hotels generally require significant time to recover their fixed investment and reach stable profitability.
The construction of high-end hotels can take three to four years, while establishing stable operations, building a brand and achieving consistent occupancy may require an additional two to three years. Once operational, the hotel’s ability to attract guests, maintain room occupancy, establish its brand and generate profits in line with projections will be crucial from both business and lending perspectives.
Project Established by Durga Prasai
Atrium Hotel Private Limited was established in 2016 under the leadership of businessman and medical entrepreneur Durga Prasai, who serves as the company’s chairman. Prasai is also associated with B&C Medical College and Teaching Hospital in Jhapa and the Purvanchal Cancer Hospital. In recent years, he has also been publicly associated with campaigns related to loan repayment and financial obligations. The hotel project is being developed as a major private-sector investment in eastern Nepal’s hospitality industry.
Growing Investment in Luxury Hospitality Sector
The development of Atrium Hotel comes at a time when large-scale investments in hotels and luxury resorts are increasing in major cities and prominent tourism destinations across Nepal. Banks and financial institutions have also been providing financing for large hospitality projects, reflecting growing expectations regarding the long-term potential of Nepal’s tourism and hospitality sector. However, rising construction costs, project delays, interest expenses and the challenge of maintaining high occupancy rates remain significant risks for large hotel investments.
About Atrium Hotel Private Limited
Atrium Hotel Private Limited is a hospitality company established in 2016 to develop and operate a luxury hotel in Birtamod, Jhapa. Led by businessman Durga Prasai, the company is developing a 98-room luxury hotel with facilities including restaurants, a swimming pool, conference and banquet halls, a spa and casino.
The project is designed as a major hospitality investment in eastern Nepal, with a strategic location near Chandragadhi Airport, the Nepal–India border and tourism destinations in Ilam. Its location suggests a focus on attracting domestic travellers, business visitors and tourists from neighbouring India.
The company is developing the hotel under a debt-to-equity financing model of approximately 70:30. However, additional construction work, design changes, expanded facilities and a prolonged construction period could lead to further increases in the project’s overall cost.
