Hotel Industry Struggling, But Hilton Remains Under Reconstruction as a Symbol of Loss

The Hotel Association Nepal reported that arson and vandalism at two dozen hotels across the country during the Janjhi movement caused damage worth NPR 2.5 billion. According to the association, most damaged hotels have been rebuilt and resumed operations, but some are facing difficulties due to delays in insurance claim payments. Association President Binayak Shah stated that the hotel and tourism sectors remain uncertain because the government has not provided a clear vision or master plan.

24 Bhadra, Kathmandu – During the Janjhi movement on 23 and 24 Bhadra 2082, around two dozen hotels throughout the country were damaged by fire and vandalism. The Hotel Association Nepal (HAN) estimates the total damage reached NPR 2.5 billion. As the one-year anniversary of the protests approaches, the hotel industry is moving forward with reconstruction efforts. While physical repairs are underway, many hotels have already resumed operations. Treasurer Yubaraj Shrestha noted that some hotels are in the final stages of rebuilding. “Many hotels have been rebuilt or are under construction,” he said.

The interim government following the Janjhi movement consistently worked to boost business morale. After peaceful elections, the new government has also offered hope to entrepreneurs. Despite additional challenges in the tourism sector, business owners continue to invest with confidence in a brighter future.

One of the most prominent damaged hotels, the Hilton Hotel, remains under reconstruction. Sources report that the rebuilding of the fully burned structure is nearly complete, with further work ongoing. “The civil construction is finished, but earthquake-resistant dampers need to be fully replaced, orders for which have been placed. Additionally, orders for the exterior glass have also been placed,” the source said. The reconstruction process has been delayed due to pending insurance claim payments. “The rebuilding is expected to finish within the next one to one and a half years, with expansion work proceeding simultaneously,” they added.

The interim government introduced measures to reactivate businesses damaged by arson and vandalism, including loan restructuring, loans at reduced interest rates, and advance payments of 50% on insurance claims. Tax payment deadlines were extended, and customs exemptions were granted for re-importing damaged items. Interim Prime Minister Sushila Karki and Finance Minister Rameshwar Khanal visited affected establishments and met with businesspeople to promote encouragement.

According to HAN President Binayak Shah, although there were short-term measures to boost morale, significant long-term challenges remain in restoring businesses.

What impact did the Janjhi movement have on the hotel industry? HAN data indicates severe damage in hotels located in the Kathmandu Valley, Pokhara, Butwal, Bhairahawa, Jhapa, Morang–Biratnagar, Dhangadhi, Mahottari, and Dang–Tulsipur regions. These hotels suffered vandalism, arson, and looting. The Hilton Kathmandu, invested in by the Shankar Group, was set on fire during the protests. Over 2,000 jobs were lost due to the unrest.

The five-star Taragaun Regency (Hyatt Regency) in Kathmandu Metropolitan City also sustained significant damage. This hotel is among the highest taxpayers and foreign currency earners in Nepal. The Barnabas Museum Hotel, invested in by former Congress MP Rajendra Bajgain, was also vandalized and set on fire. Due to the protests, many hotel rooms remained vacant. September, generally regarded as the peak season, saw over 80% room vacancies on September 8 last year because of the unrest.

President Shah emphasized that the most affected aspect of the hotel industry due to the movement has been confidence.

How is reconstruction progressing for hotels damaged by arson? Reconstruction efforts near Barnabas Hotel are underway rapidly, with plans to resume operations soon. This hotel suffered losses exceeding NPR 300 million due to arson. Hyatt Regency is also actively rebuilding, aiming to reopen by December. In Kathmandu, Crown Plaza Hotel has resumed operations following reconstruction. In Pokhara, Hotel Adam and Barpipal are operating, while Landmark Hotel is also open, and Sarobar Hotel is currently under reconstruction. Bagaincha Resort in Pokhara is operational. In Butwal, Dream International and Dreamland Gold Resort have reopened. In eastern Nepal, Hotel Kingsbury and Mechi Crown in Jhapa are operational.

Severe Damage to Cable Cars, but Businesses Recover Quickly: Protesters also damaged cable cars across various regions. The Maulakalika Cable Car in Nawalparasi resumed operations last Mangsir after repairs to vandalism at the lower station. Chandragiri Cable Car was suspended for two months but has reopened after necessary maintenance and safety inspections. More than 2,000 tourists use the Chandragiri cable car daily.

The new government has yet to fully restore business confidence. Dissatisfaction is apparent not only in the hotel industry but across the entire tourism sector due to current government policies. Critics say the powerful government has adopted a crackdown approach toward investors and failed to efficiently manage leadership of key agencies. Nepal Airlines Corporation is in crisis, and the Nepal Tourism Board remains leaderless. Though the policies use attractive slogans, budgets and programs have not aligned accordingly. HAN President Shah commented, “The government is trying, but there is no clear vision.”

Nepal’s hotels have the capacity to accommodate over 4 million tourists annually, but currently only about 1.2 million visit—the success largely attributed to private sector efforts. Shah added, “If this government wishes, it can solve any problem and move the country forward; therefore, working with a clear vision in the tourism sector is essential.”

Nepal is always vulnerable to natural disasters, and in such cases, the state must act proactively to mitigate impacts, Shah said. Coordination among government bodies remains poor. While the Ministry of Tourism calls tourists, the Ministry of Industry delays providing technical assistance. Diverging priorities between these ministries create uncertainty over which industry the government should prioritize, a matter causing concern among businesspeople.

Current Status of Hotels Damaged in the Janjhi Movement

• Hilton Hotel: Under construction
• Hyatt Regency: Under construction
• Barnabas Museum Hotel: Under construction
• Hotel Crown Plaza Kathmandu: Operational
• Hotel Adam Pokhara: Operational
• Hotel Barpipal Pokhara: Operational
• Hotel Kingsbury Jhapa: Operational
• Mechi Crown Jhapa: Operational
• Hotel Landmark: Operational
• Hotel Sarobar Pokhara: Closed
• Bagaincha Resort, Pokhara: Operational
• Dream International Butwal: Operational
• Dreamland Gold Resort: Operational