Businessman Desh Bandhu Basnet is set to further expand his footprint in Nepal’s hospitality sector with a Rs 1.66 billion luxury resort and convention centre in Itahari, Sunsari. The project, being developed by A.B. Hospitality Private Limited (ABHPL), is designed to combine high-end accommodation, large-scale events, dining, and wellness facilities under one property.
The proposed project is located in Itahari-16 and is expected to be completed by late 2028. The development is being positioned as a premium hospitality and MICE destination, with a particular focus on high-end Nepali and Indian customers, corporate and government functions, destination weddings, conferences, exhibitions, and other large gatherings. According to an October 2026 credit rating report issued by Infomerics Credit Rating Nepal Limited, the estimated project cost stands at Rs 1.664 billion.
Luxury Accommodation and 3,000-Person Event Facility
The project will include 30 luxury rooms and villas, supported by a large convention and banquet facility with a capacity of approximately 3,000 people. Alongside accommodation and convention facilities, the planned development will feature fine-dining restaurants and bars, spa and wellness facilities, a swimming pool, landscaped areas, and outdoor event lawns. The luxury property is being designed with an antique palace-inspired luxury concept, aimed at creating a distinct positioning in the eastern Nepal hospitality market.
The convention component will be one of the project’s major revenue-generating facilities. It is expected to serve weddings, corporate programmes, conferences, exhibitions, concerts, government events and other functions requiring large-scale venues. By combining accommodation, food and beverage, wellness and event facilities, the company is targeting customers who require multiple services within a single destination rather than relying solely on conventional hotel accommodation.
Strategic Location Near Major Transport Corridors
The luxury project’s location in Itahari is considered one of its key strengths. Itahari is an important junction connecting the East-West Highway and Koshi Highway, providing road access to major cities and commercial centres in eastern Nepal. The property will have connectivity to Biratnagar, Dharan, and major Nepal-India border points, while Biratnagar Airport and Indian airports such as Bagdogra and Purnia provide additional access for domestic and Indian visitors.
The company plans to target a broad customer base, including premium domestic travellers, high-net-worth individuals, corporate houses, government organisations and Indian customers. Indian destination weddings are expected to form an important part of the project’s business strategy, while its convention capacity could help attract corporate conferences, exhibitions and large institutional events from eastern Nepal and neighbouring India.
Project Financial Progress at Around 16%
Despite the size of the planned development, the project remains at an early stage of implementation. As of mid-September 2026, the company had spent around Rs 261 million, equivalent to approximately 16% of the total estimated project cost. Land and land development activities were nearly completed, with progress estimated at around 98%. However, major civil construction had not yet started, with boundary wall works underway at the time of the rating assessment.
The project has adopted an estimated 75:25 debt-equity financing structure. The total equity requirement of the luxury resort has been estimated at around Rs 422 million, of which the promoters had injected approximately Rs 157 million by mid-September. The company therefore needs to inject the remaining equity while moving ahead with the major construction phase.
Rs 1.24 Billion Debt Financing Tied Up
The debt component of the project stands at around Rs 1.242 billion, which has already been tied up. Infomerics has assigned an IRN BB- rating to the company’s long-term bank facilities of Rs 1.2419 billion. The rating agency has also assigned an IRN A4 rating to short-term bank facilities of Rs 300 million, which fall within the sanctioned term-loan limit.
The credit ratings reflect the project’s experienced promoter and management team, strategic location and differentiated positioning, but are also constrained by implementation and market risks. The rating agency has specifically highlighted the relatively low financial progress of the project and the fact that civil construction was yet to begin as key concerns.
Basnet Holds 74.47% Stake
A.B. Hospitality Private Limited was incorporated on November 10, 2022, under the Companies Act, 2006, and is registered with the Office of the Company Registrar. Basnet is the company’s principal shareholder, holding 74.47% of the equity. A.B. Investment Holding Private Limited owns the remaining 25.53%. The company’s paid-up capital stood at Rs 157 million as of mid-September 2026.
Basnet has business interests across tourism, trade and investment and is associated with A.B. Holdings and several business and industry-related organisations. His involvement in the hospitality sector has also expanded through other hotel projects. The company has also appointed an experienced hospitality management team. Abhimanyu Kayastha, the General Manager, has more than 30 years of experience in hotel operations and management in India, according to Infomerics.
Project Aims to Address MICE Infrastructure Gap in Eastern Nepal
One of the major propositions of the project is its focus on the MICE market, meetings, incentives, conferences and exhibitions. Eastern Nepal has a number of hotels and banquet venues, but the availability of integrated luxury hospitality facilities capable of hosting very large events remains comparatively limited. The proposed 3,000-person convention facility is therefore being positioned to capture this segment.
The luxury project could also benefit from the increasing movement of visitors between Nepal and India, particularly across the eastern border. Its proximity to major highways and border points is expected to make it accessible to both regional customers and visitors from India. The inclusion of destination wedding facilities further broadens the potential market, as Indian wedding groups typically require accommodation, banquet facilities, restaurants, leisure services and event spaces at the same destination.
Demand and Competition Remain Key Challenges
While the luxury project’s location and diversified facilities have been identified as strengths, the rating agency has cautioned that the demand for premium hospitality and large-scale events in the region remains to be established. The business model depends on attracting customers willing to pay premium prices, including high-net-worth Nepali customers, Indian wedding groups, corporate clients and government organisations.
The luxury project will also compete with existing hotels, resorts and banquet facilities in Itahari, Biratnagar, Dharan and other eastern markets. New upscale hospitality projects could further intensify competition by the time the property becomes operational. The ability to maintain sufficient occupancy, attract large events and generate sustainable revenue will therefore be important once the project begins commercial operations.
Timely Construction Critical for Project Viability
With the project still at an early construction stage, timely implementation has emerged as one of the most important factors for its future performance. Infomerics has identified completion within the estimated cost and timeline, additional equity infusion, commencement of civil construction and development of sustainable market demand as key rating sensitivities.
The project is currently scheduled for completion by late 2028. If construction progresses according to the planned schedule, the property could add a sizeable new venue for luxury hospitality and large-scale events in eastern Nepal. At the same time, the relatively low construction progress means the company still faces considerable execution risk before the project can begin generating operating revenue.
Expanding Premium Hospitality Infrastructure Outside Kathmandu
The Itahari project comes amid increasing private-sector investment in premium hospitality infrastructure beyond Kathmandu Valley. Developers are increasingly looking at cities such as Itahari and Biratnagar, where road connectivity, proximity to India and growing commercial activity provide opportunities for new hospitality concepts.
For A.B. Hospitality, the proposed project represents an attempt to combine luxury accommodation, wellness, dining and large-scale event infrastructure into a single destination. Its eventual performance will largely depend on how effectively the company converts Itahari’s strategic location into sustained demand from domestic travellers, corporate clients, government organisations and Indian visitors, while managing construction costs and completing the project within the targeted 2028 timeline.
