In recent months, several significant developments have taken place in Nepal’s hospitality and tourism sectors with multiple high-end hotels opening across the country. The most notable among them is the launch of the Mercure Kathmandu in Sukedhara in January, which has been set up with an investment of NPR 3 billion. The management of this five-star hotel is handled by the French hotel group, Accor. This addition to Kathmandu’s hotel industry follows the launch of Hilton Kathmandu in Naxal in July 2024, a project by the Shankar Group with an investment of NPR 8.35 billion.
Moreover, another notable establishment is the Temple Bell Boutique Hotel & Spa in Pokhara’s Lakeside, which opened in the latter part of March 2025, backed by a total investment of NPR 1.25 billion from the Chilli Group under the leadership of tourism entrepreneur Bishworaj Poudel. This marks a significant step for Pokhara, which has become increasingly popular among tourists, adding to the growing trend of luxury hotels in Nepal.
In addition to these new openings, Siddhartha Hospitality has also been actively expanding its operations. Recently, it inaugurated a three-star hotel in Damuli, Tanahu, and is planning to construct a five-star hotel in Dhangadhi. Siddhartha’s ambitious growth strategy has also led to the launch of Siddhartha Cottages in Butwal. The company is aggressively expanding its footprint, with plans for additional hotels in various locations shortly. Furthermore, by the start of the Nepali New Year (Baishakh 1st), Siddhartha Hospitality will also open a hotel in Bharatpur as part of its expansion.
The boom in luxury hotels is not limited to Kathmandu or Pokhara. Various cities in Nepal are seeing a rise in the number of five-star and tourist-standard hotels, not only from domestic investors but also from international hotel chains. This year alone, nearly a dozen luxury and chain hotels have been inaugurated, while half a dozen more are currently in the pipeline.
Some of the international hotel chains that have entered Nepal include well-known brands such as Marriott, Lemon Tree, Ramada, Dusit Thani, and Hyatt Place. These global chains are opening their hotels in key tourist destinations such as Kathmandu, Pokhara, Lumbini, Biratnagar, and other regions, contributing to the rapid growth of Nepal’s hotel industry.
While this growth in the hospitality sector is promising, there are concerns regarding the underutilization of hotel capacity. Despite the substantial investments, the occupancy rates of these newly built hotels remain low, with only about one-third of the total capacity being utilized.
Binayak Shah, the President of the Hotel Association of Nepal (HAN), expressed concern over the lack of returns despite large investments in the sector. However, he emphasized that the arrival of international hotel chains in Nepal sends a positive message to the global market, which could eventually lead to a greater number of foreign tourists visiting the country.
In terms of infrastructure development, there have been significant efforts to improve Nepal’s tourism facilities. The Nepal Tourism Board (NTB) has focused on aggressive international marketing, hosting more than 17 B2B (business-to-business) programs and promoting Nepal as a destination globally. The NTB has also invited foreign influencers and media representatives to visit Nepal to further promote tourism. These initiatives have contributed to the rebound of international tourism, with tourist arrivals reaching pre-COVID levels.
Despite the positive growth in the hotel sector, some challenges need to be addressed. One such issue is the infrastructure, particularly in terms of transportation and airport capacity. Although Tribhuvan International Airport (TIA) in Kathmandu is operating at full capacity, the newly opened Gautam Buddha International Airport in Lumbini and Pokhara International Airport are still in the process of being fully operational, which has hindered further tourism growth. The government is actively working on these issues, with plans to expand and upgrade infrastructure to support the increasing number of international tourists.
In the regulatory sphere, the Ministry of Culture, Tourism, and Civil Aviation has made notable strides in improving the legal and structural framework for the tourism industry. New laws, including the Civil Aviation Authority Bill and the Tourism Act, are in the process of being passed. These laws aim to streamline the operations of the tourism sector and make Nepal a more attractive destination for foreign investors and tourists alike. Moreover, the government has recently recognized the hotel industry as a national priority, which has motivated both domestic and international investors to continue pouring funds into the sector.
The recognition is expected to further encourage investments in hotel infrastructure, thereby boosting the growth of the hospitality industry. While the hospitality industry in Nepal has made significant strides in the past year, there is still much work to be done. The overall goal is to increase the number of foreign tourists and improve hotel occupancy, which will require continued efforts from both the private sector and the government. The continued growth of the hotel industry, along with improved infrastructure and international marketing, offers a promising future for Nepal’s tourism sector.
