NEPAL HERITAGE TOURISM REPORT ARCHITECTURAL AND CULTURAL HERITAGE TOURISM PRODUCTS IN NEPAL An Assessment of New Private Sector Investment Opportunities in the Tourism Sector in Annapurna Conservation Area 1 NEPAL HERITAGE TOURISM REPORT About IFC International Finance Corporation is an international organization established by Articles of Agreement among its member countries, and a member of the World Bank Group. All names, logos and trademarks are the property of IFC and you may not use any of such materials for any purpose without the express written consent of IFC. Additionally, “International Finance Corporation” and “IFC” are registered trademarks of IFC and are protected under international law. © International Finance Corporation 2021. All rights reserved. 2121 Pennsylvania Avenue, N.W. Washington, D.C. 20433 Internet: www.ifc.org The material in this work is copyrighted. 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All other queries on rights and licenses, including subsidiary rights, should be addressed to IFC Communications, 2121 Pennsylvania Avenue, N.W., Washington, D.C. 20433. 2 NEPAL HERITAGE TOURISM REPORT Acknowledgements This report—Architectural and Cultural Heritage Tourism Products in Nepal: An Assessment of New Private Sector Investment Opportunities in the Tourism Sector in Annapurna Conservation Area—is brought to you by IFC, a member of the World Bank Group. The report was developed under the leadership of Raihana Rabbany, Private Sector Development Specialist, and IFC’s core tourism team consisting of Wouter Schalken, Senior Tourism Specialist, and Sanjay Kumar Jha, Consultant. Contributing in no small measure were Ashim Nepal, Associate Operations Officer, John Perrottet, Senior Tourism Specialist, WBG, Louise Twining-Ward, Senior Tourism Specialist, WBG, and Natalia Juanco Corral, Consultant. Within IFC, the team would like to thank Wendy Jo Werner, Country Manager, Nepal, Babacar Sedikh Faye, Resident Representative, Nepal, and Shalabh Tandon, CMA Program Manager (South Asia), for their leadership, encouragement, and support. This effort would not have been possible without the help of officers and functionaries of the Nepalese government, especially from the Ministry of Culture, Tourism, and Civil Aviation, Ministry of Forest and Environment, Annapurna Conservation Area Project, Nepal Trust for Nature Conservation, and chairpersons of the Rural Municipalities of Warangjung, Thasang, Tukuche, and Gharapjong. Many owners and operators gave up their valuable time to provide deep insights into the status of tourism in the region. The team thanks them all, especially Tripple Gurung, Kamala Lalchan, and Arjun Singh. This report would have been impossible without their knowledge, which they so happily shared with the team. Finally, the team would like to thank Chris Seek (Solimar) and Hitesh Mehta (HM Designs) for conducting interviews, carrying out field work, taking photographs, and helping put this report together; and Sanish Maharjan for the spectacular illustrations of the region. 3 NEPAL HERITAGE TOURISM REPORT Foreword Across the world, the tourism industry creates jobs, earns foreign exchange, and generates tax revenues for developing countries. The sector is dominated by small and medium-sized businesses that provide a wide variety of services ranging from accommodation to transport, guiding, food and beverage, and tour-operating services. IFC supports the tourism industry because of its strong development impact. It is easily accessible to rural entrepreneurs, allows for local approaches and products, has a bias towards female participation, and enables excellent supply-chain linkages. Our activities in tourism are aimed at promoting private sector-investments leading to sustainable and inclusive growth. In Nepal, tourism development also enables the creation of cultural, adventure, and sightseeing experiences that have appeal and significance among its established global, loyal market of visitors—ranging from pilgrims to mountaineers, hikers, and wellness and sightseeing travelers. But the COVID-19 pandemic has hit the tourism industry especially hard. The potential loss to the country’s GDP from the collapse of tourism activities is estimated at $460 million. Around 230,000 jobs are at risk; 20,000 tour and trekking guides are unemployed, and 2,600 trekking agencies are closed, some maybe permanently. Now, as outbound markets begin to show signs of recovery, it is time to implement strategicadjustments to Nepal’s tourism sector and implement policies that will align the destination with the new market reality. IFC’s immediate aim in Nepal is to help attract more private investors. Tourism is a priority area for IFC. We have been supporting this sector through investments and advisory projects. IFC’s Tourism Advisory project in Nepal supported the Government of Nepal in the COVID response phase by bringing together key stakeholders to develop an integrated communication strategy. We are also working to strengthen the market position of tourism SMEs while actively seeking to facilitate investment by international brand operators or support local quality brands that are able to attract higher-paying clients in heritage tourism. In the long term these efforts will improve the competitiveness of the destination by attracting a wider range of tourists, including more affluent travelers who seek international-standard facilities and comfort. This will help make the tourism economy in Nepal more resilient and aligns with the expected changes in visitor profile in a post- COVID-19 market. 4 NEPAL HERITAGE TOURISM REPORT This report looks at how to pivot Nepal’s broad appeal to specifically attract a greater number of higher-end tourists. While backpackers have long recognized that Nepal is one of the most beautiful countries in the world, it is now time to broaden the market and offer a competitive product to tourists who prefer to travel in comfort and experience authentic heritage products. Arrivals of higher-spending tourists will have a huge impact across the supply chain, as businesses upgrade and upskill to cater to a different class of tourists. This will also have ripple positive effects across Nepal’s economy. The report presents four tangible opportunities for Nepal to attract these higher-value visitor segments through examples of development across the country’s most-frequented destination: the Annapurna Conservation Area. These four examples are practical investment opportunities and are described with associated development/management models. They are easy to implement and provide a blueprint for replication across the country. As the pandemic and its economic devastation starts fading into the past, Nepal should be positioned to benefit from the return of tourism activity with a more conscious traveler from across the world seeking authentic, personal, and meaningful heritage experiences. Nepal has the attractions to welcome these visitors and should be ready with an enhanced product that matches the country’s appeal. Babacar Sedikh Faye Resident Representative, Nepal 5 NEPAL HERITAGE TOURISM REPORT Table of Contents Acknowledgements 03 Foreword 04 Executive Summary 07 SECTION 1: Introduction 11 SECTION 2: Proposals for Accommodation Investment In the Annapurna Conservation Area 15 Investment Proposal 1: The Albergo Diffuso Model at Tukuche—Lower Mustang 15 Investment Proposal 2: Jharkot Heritage House 19 Investment Proposal 3: Network of Lodges—Manang 22 Investment Proposal 4: Coffee House Franchise Concept—Lower Mustang andManang 23 SECTION 3: Action Points to Improve Nepal’s Visitor Profile 26 SECTION 4: Afterword: Way Forward 29 ANNEX: A Closer Look at Three Investment Models 31 1. The Albergo Diffuso or Scattered Hotel Concept 31 2. Adaptive Reuse of Existing Heritage Buildings 32 3. The Network of Lodges Concept 33 6 NEPAL HERITAGE TOURISM REPORT Executive Summary WHY INVEST IN NEPAL The five-year IFC Nepal Country Strategy (FY17- standards, will attract an additional market 21) identifies tourism as a key sector and sets segment that is different from the traditional an ambitious target to facilitate private sector low-budget tourists that come to Nepal. investments in tourism across Nepal to drive employment and diversify economic growth. Nepal’s tourism arrivals, before the pandemic, A key element of the strategy is to change the was booming—growing at 31 percent a year. In existing low-value, high-volume tourism model, 2019, Nepal welcomed over 1.17 million visitors. which presents a disincentive for investment in The government has been making coordinated the industry. efforts to attract more travelers to the country by highlighting its scenery, heritage, wellness, Not least due to the global pandemic, Nepal’s and adventure options. New roads are providing tourism stakeholders are now looking to better access for higher-value tourists. The offer a higher-value product to attract high- example of neighboring Bhutan shows that spending global customers that seek to high-value tourists, seeking Himalayan experience the country’s spectacular natural experiences, are willing to pay premium prices and cultural attractions. This changing focus for comfortable and luxury accommodation. towards wellness and authentic experiences, offered with international health and hygiene BUILDING A GREENER, RESILIENT, AND INCLUSIVE TOURISM SECTOR IN NEPAL Capturing these new market opportunities the authentic and unique appeal of heritage requires investments to sustainably enhance properties found across Nepal. There is a clear operating standards to follow international opportunity to build back a tourism system that protocols while, at the same time, utilizing is greener, more resilient, and more inclusive; 7 NEPAL HERITAGE TOURISM REPORT with a focus on improved quality of products construction of a new road has greatly improved and service, especially in mountain regions, the quality of life for local people and has to be able to earn significantly higher returns opened up the area to a wider range of tourists. per visitor-night. Adding to this, opportunities On the flip side, it has changed the trekking derived from digital innovation and improved experience. Hikers now share the road with supply-chain linkages—particularly in vehicles, and some are opting to go elsewhere agricultural products—will create an inclusive as a result. tourism economy with strong resident/ community participation along the entire value There are currently two main visitor segments chain. to the Annapurna Conservation Area: Firstly, Buddhist and Hindu pilgrims heading to The Annapurna Conservation Area is well- Muktinath, an important site for both religions. known for its spectacular mountain landscapes And second, adventure tourists, including and its wide range of trekking and climbing those seeking soft adventure—hikers and opportunities. It already accounts for 60 trekkers—and those pursuing more strenuous percent of trekking holidays in Nepal. However, activities—mountaineers seeking to scale the its cultural and heritage resources remain high peaks. The new road has opened up the largely untapped. The Annapurna Circuit region to new markets, including self-driven and Trail is one of the most famous treks in the leisure tourists, keen to see the mountains but world. The trail is between 160 km and 230 km preferring to do so through a car window. depending on where trekkers start and end. The PRIVATE INVESTMENT CAN HELP OFFER RICHER EXPERIENCES While the Annapurna Conservation Area is Tourism Products in Nepal: An Assessment of New arguably one of the most beautiful regions Private Sector Investment Opportunities in the in the world, it is surprising that a higher Tourism Sector in Annapurna Conservation Area—is level of accommodation infrastructure has a result of these visits. not been built to accommodate the growing segment of global soft-adventure tourists. The report sums up the status of tourism New accommodation offerings will be needed in the Annapurna Conservation Area and to attract this different and higher-spending proposes definite ways to channel private- market to the area. IFC’s team of sustainable sector investments that will attract tourists by tourism and finance professionals made two offering a richer experience and benefit the local visits to the area to assess opportunities to economy by increasing incomes and creating create higher-value tourism products. This jobs. In that way, this report demonstrates report—Architectural and Cultural Heritage how an investment in Nepal will yield not 8 NEPAL HERITAGE TOURISM REPORT just financial returns, but social and cultural Nature-based tourism is firmly established returns as well. It examines how investors can as an important and competitive sector in leverage the Annapurna Conservation Area’s the local economy and the demand is only triple offering of landscape, architecture, and growing. All four investment models offer huge culture to offer a tourist experience unparalleled opportunities to investors, who will see both anywhere else in the world. It presents four the earning potential of such enterprises as well potential investment concepts rooted in as the immense social impact they can have on heritage preservation and restoration: a the people of Nepal. Boutique Hotel in Tukuche, a Heritage Lodge in Jharkot, a network of lodges along the trail, and a coffee shop franchise in Lower Mustang and Manang. LAYOUT OF THE REPORT The report is presented in four sections and an Diffuso model, first made famous in Italy. The annex. second proposal seeks to apply the Adaptive Reuse of Heritage Buildings model to a Jharkot SECTION 1, Introduction: This section gives a Heritage House. The third proposal is to brief picture of the Annapurna Conservation establish a Network of Lodges, a branded lodging Area, its main trekking path, and major towns franchise company to provide a lodge-to-lodge in the area. While the area is well-known for experience for trekkers along the Seven-Passes its natural splendors, it also has a rich cultural trail. The final proposal is to set up franchised diversity and unique architectural heritage. coffee shops along the trail, where customers The Introduction provides the context for the can rest, freshen up, buy local souvenirs, and rest of the report, which seeks to synthesize even witness small cultural events. these three elements to build a richer tourism experience. SECTION 3, Action Points to Improve Nepal’s Visitor Profile: Here, we present what needs to SECTION 2, Proposals for Accommodation be done by both government and private sector Investment in the Annapurna Conservation to attract higher-spending tourists to Nepal. Area: This section lists four concrete investible These are the following: proposals to develop the tourism circuit Need for Building Codes: Prevent modern in Lower Mustang and Manang, which are buildings from clashing with the area’s heritage the principle regions within the Annapurna architecture. Conservation Area. Create Holistic Destinations: Develop soft- adventure tourism that also offers non-hiking The first proposal is to develop a street in products to attract families and higher- Tukuche village along the lines of the Albergo spending tourists. 9 NEPAL HERITAGE TOURISM REPORT Self-Drive Tourism: Explore opportunities to to promote high-value tourism in the region and promote self-drive tourism in the western part discusses the future roadmap, which includes of the Annapurna Conservation Area. a series of pitch books that will present the Hospitality Training: Train local people to serve proposed investment models. These pitch books higher-value tourism. will include information required by investors, Reduce Barriers to Investment: Address issues including financial information. such as high interest rates, land acquisition issues, and the challenges of working with local ANNEX, A Closer Look at Three Investment municipal regulations. Models: This section delves deeper into the Stop all Free Accommodations: Put an three models introduced in Section 2. The end to the existing practice of providing free Albergo Diffuso, the Adaptive Reuse of Heritage accommodation and charging only for food. Buildings, and the Network of Lodges models are Internationally-accepted bathroom design: discussed in greater detail with an emphasis Ensure hotels and lodges in the region have on requirements and benefits. It also provides appropriate bathroom designs. examples of how these models have worked in other countries. SECTION 4, Afterword: Way Forward: This section sums up the need to attract investment 10 NEPAL HERITAGE TOURISM REPORT SECTION 1: Introduction This Assessment Report is a result of two separate field visits made to Lower Mustang and Lower/Upper Manang to assess the potential for new investment opportunities and models in tourism in the Annapurna Conservation Area (ACA). This report is part of IFC’s Creating Markets for Tourism project, which seeks to create a more beneficial, inclusive, and competitive tourism system in Nepal by identifying investment opportunities for tourism products that attract different and higher-spending market segments, improve local supply- chain linkages, and limit their impact on the environment. The project is implemented in the Annapurna Conservation Area, which is one of the country’s primary tourism destinations. Map of Nepal showing the location of Annapurna Conservation Area. 11 NEPAL HERITAGE TOURISM REPORT CONTEXT The Annapurna Conservation Area (ACA) is the The area is also rich in cultural diversity. It is largest protected area in Nepal, covering an area home to over 125,000 residents of different of 7629 square kilometers, and managed by an cultural and linguistic groups. Gurung and autonomous non-governmental organization, Magar are the dominant ethnic groups in the the National Trust for Nature Conservation south, while Thakali, Manang, and Loba are (NTNC)¹. Among other features, ACA contains dominant in the north. Each group has its own the tenth highest peak in the world, Mt. language, culture, and traditions. There are Annapurna (8,091 meters) and the world's also Brahmin, Chhetri, and other occupational deepest river valley, the Kali Gandaki gorge. ACA castes, although, in smaller numbers. Hindu, is rich in biodiversity, harboring 1,226 species Buddhist, and pre-Buddhist religions and of flowering plants, 102 mammals, 474 birds, mixtures thereof are prevalent across the 39 reptiles, and 22 amphibians. The world's region. largest rhododendron forest is located in ACA’s Ghorepani region and Tilicho Lake is one of the world's highest-altitude freshwater lakes. The Cultural Diversity of ACA ACA AS A TOURISM DESTINATION Tourism is an important sector across Nepal deep gorges, traditional villages, a rich cultural contributing 6.7 percent to GDP in 2019 (WTTC diversity, and important spiritual sites—the Country profile) and it is not surprising that Annapurna Conservation Area is an important the natural and cultural features of ACA have and popular tourist destination in Nepal. made it the most popular trekking destination There are two main tourism segments in ACA: in the country. With stunning mountain ranges, pilgrimage tourism, for Buddhists and Hindus 1 The continued management of ACA by NTNC is under review in 2021 12 NEPAL HERITAGE TOURISM REPORT heading to Muktinath, and trekking tourism, shorter trails are now being offered; more which includes soft adventure, such as hiking, vehicles enter the area, which could potentially and expeditions scaling peaks over 6,000 attract new types of tourism, such as the meters. higher-value leisure/wellness tourists, along with increased visitation by pilgrims. According to the Nepali Ministry of Forestry and Environment, ACA accounts for 60 percent Post COVID-19, UNWTO expects visitors to pay of trekking holidays in Nepal. Nature-based more attention to authentic experiences in tourism is firmly established as an important less-crowded areas, where residents benefit and competitive sector of the local economy. from their visit. ACA offers excellent prospects There are over 1,000 hotels and lodges, tea for regional economic development through shops, and hundreds of other subsidiary services increased tourist expenditure and associated to cater to the thousands of trekkers, pilgrims, revenue. But for tourism to capture increased and their supporting staff. benefits to the local communities, new products need to be developed in both Lower Mustang Most lodges and hotels cater to low-budget and Lower Manang to attract these different travelers, with some charging only for meals and higher-paying customers. and not for accommodation. A recent study found that hotels in ACA on average have a 38 In Lower Mustang, the town of Jomsom and its percent occupancy rate, and charge around $10 airport, has become a gateway for visitors to a night for room and board. the Hindu temple at Muktinath and trekkers passing over the Thorong La Pass. The improved More recently (2017), the trekking trail has been access allows for more time to explore the larger partly upgraded to a motorable road, which has area and its heritage villages, agricultural fields, altered the tourism landscape and negatively and undertake trips to the hidden kingdom of impacted the experience of the Around Upper Mustang. Annapurna 20-day Trekking Trail. Different, IFC’S TOURISM VISION FOR LOWER MUSTANG Lower Mustang is recognized as a cultural circuit, structured along the old Annapurna Circuit, with the heritage settlements of Marpha and Tukuche as major attractions. Equally, the Muktinath- Kagbeni area has reinforced its position as a pilgrimage center at national and international level; facilitated by the development of Jomsom as a tourism hub. At Manang, there is a need to diversify away from the over-reliance on hard-adventure trekkers, who currently make up approximately 80 percent of visitors. The region has a limited number of accommodations and the upgrading of the trekking trail to an actual road is a deterrent to hiking tourism. Therefore, IFC’s vision here proposes to “reposition the Annapurna circuit with shorter 13 NEPAL HERITAGE TOURISM REPORT treks.” This will appeal more to soft adventurers and domestic tourists, creating a more impactful tourism market in Lower Manang. There is need here to create new trekking routes and lodges, located in the wilderness and away from the main road between Jagat and Manang Town IFC’S TOURISM VISION FOR MANANG The Manang area is a desired destination for It is in this context that IFC proposes new adventure seekers seeking unspoiled and models to attract investment to Lower Mustang unexplored areas. The Annapurna circuit is and to create a circuit of lodges in Manang. being repositioned, offering short treks and These models are discussed in greater detail in other activities for nature lovers. Section 2. 14 NEPAL HERITAGE TOURISM REPORT SECTION 2: Proposals for Accommodation Investment in the Annapurna Conservation Area This section describes four investible proposals to develop higher-value tourism in Lower Mustang and Manang. INVESTMENT PROPOSAL 1: THE ALBERGO DIFFUSO MODEL AT TUKUCHE— LOWER MUSTANG Just south of Jomsom, lies Tukuche, a charming or Pokhara, while their houses either sit empty Thakali village of 662 habitants at an altitude or are rented out. of 2580 meters. It is accessible by road from Jomsom (1 hour) and Pokhara (8 hours), both These beautiful abandoned homes of which have domestic airports. The road is should be converted into quality tourism currently in a poor state but is continuously accommodations. Tukuche was the center of being improved. the old trade route where Tibetan traders came down with salt and wool and exchanged it with Tukuche’s streets are lined with old stone grain that came from the south. Tukuche was houses, apple orchards surround the village, and also a center of tax collection during the Rana the backdrop of snow-capped mountains gives era. Local residents are particularly proud of it a fairy-tale appearance. The village has two having hosted the Japanese monk, Kawaguchi main streets that run parallel to each other and (around 1899), who spent some time in the are lined with Thakali houses, notable for their building that is now the distillery. stone walls and ornate wood balconies. Some of the old houses are already falling into disrepair, There are currently ten guesthouses in with roofs fallen in or walls broken down. Most Tukuche, with a total of around 100 rooms and house owners are said to be living in Kathmandu 250 beds. The average cost of these hotels is 15 NEPAL HERITAGE TOURISM REPORT approximately $10 per night for full board. In ACA, the average daily spend is $39 per night. Tukuche lies on the Annapurna Circuit and has long been a place for hikers to halt. The nature of trekking a circuit means these tourists usually stay only for a night. ACA accounts for 60 percent of all trekking holidays in Nepal. Muktinath, an important pilgrimage site for Buddhists and Hindus, is about 30 kilometers from Tukuche and, on occasion, Tukuche has great character and with pilgrims may halt overnight in the village. views of the Nilgiri Range Hoteliers in Tukuche are members of the Tourism Entrepreneurs Association of Manang. The owner of the Dutch bakery is head of the local Tourism Committee. TOURISM IN TUKUCHE Buildings and boundary walls are Tourism operations in Tukuche are in a state of constructed from stone transition. The village used to be popular with visitors hiking the 20-day Around the Annapurnas Trail. Because of the nature of trekking tourism, tourists only stayed for a night and service levels were kept basic and cheap. With the upgrading of most of the trail into a motorable road, fewer hikers pass through Tukuche. While pilgrimage tourism is on the rise, this segment is also characterised by short stays and these tourists Architectural heritage of Tukuche’s therefore rarely stop overnight in the small towns main street and villages between Besisahar and Muktinath. This segment tends to travel through specialist operators who work at scale and seek larger accommodations. However, according to operators, the single- family pilgrimage segment is growing rapidly (field assessment 2019). Tukuche has all the makings of a Heritage Village with its numerous buildings characterized by rich local architecture and the way in which stone has been used in construction. It invites visitors to meander through the small streets and alleys and reflect on history and Window detail of a disused Tukuche house 16 NEPAL HERITAGE TOURISM REPORT heritage, which is so obvious everywhere you look. A big attraction is the distillery located in a well- preserved heritage building that produces brandy from apples grown in local orchards (not yet for sale on the market in 2020). The distillery itself has tourism potential as it is big enough to house a restaurant or guestroom. In addition, there are four gompas (Buddhist monasteries), a cultural museum, and a Thakali library. There is easy access from here to Chhairo, a Tibetan refugee settlement accessible only on foot. The main attraction is the 300-year-old Chhairo Gompa and a visit will automatically require a two- night stay in Tukuche. Currently, the town has ten small lodges, with two more in the pipeline. The existing lodges are all located in heritage homes, while the upcoming lodges are new constructions that ignore local building styles. COMPETITIVE EDGE Why will tourists to Nepal choose to stay at an Albergo Diffuso? High-quality service and Part of a holistic Accessible accommodation destination Tukuche is easily There are very few upmarket The location of the Albergo accessible from Jomsom hotels in the Nepalese Diffuso in a mountain village and Pokhara. Both cities Himalayas. Most hotels cater to will provide a variety of have regional airports. budget travelers. Tourists from activities for guests during Despite this accessibility, Bhutan, India, and elsewhere their visit—allowing for Tukuche has a ‘remote’ in Nepal, indicate that there is extended lengths of stay. feel, nestled between a sizable market ready to pay Activities will include high Himalayas. for upscale accommodations in hiking, mountain biking, adventure destinations. birdwatching, cooking classes, heritage tours Albergo Diffuso Tukuche will and spiritual and wellness have “first mover” advantage, experiences around local by being the first heritage monasteries. preservation project in Annapurna. More projects are likely to follow and a successful cluster can be built across Marpha, Jomsom, and Kagbeni. 17 NEPAL HERITAGE TOURISM REPORT APPLYING THE ALBERGO DIFFUSO (SCATTERED HOTELS) MODEL TO TUKUCHE Tukuche requires a low-volume, high-value anchor hotel—similar to Moksha Mustang, the high-end hotel that has benefited Jomsom tourism—to provide impetus and act as a catalyst for tourism revival in this most charming of heritage villages. Since many buildings are abandoned or in a state of disrepair, this turnaround can best take place through an Albergo Diffuso concept of refurbishing dilapidated and abandoned homes to convert them into hotel rooms and suites. Our proposal is that the street parallel and closest The ambience of the Albergo Diffuso Street Hotel to the Kali Gandaki River, which has several abandoned buildings, be converted into an Albergo Diffuso Boutique Hotel. This proposal would of course require buy-in from residents living on this street, local village members, and the local authority. Each group of scattered hotels can be complemented with a restaurant, café, and wellness facilities. After Tukuche, other projects will likely follow and a successful cluster can be built around Marpha, Jomsom, and Kagbeni. Marpha especially is a good The proposed location for the Albergo Diffuso Street Hotel candidate as it is located just north of Tukuche and is a well-maintained heritage village of traditional stone houses. The houses are uniform in their white color, with their doors and windows outlined in dark red. Firewood is piled on top of roofs, an old symbol of wealth. The old center of town is pedestrian only. Marpha is very clean, with less garbage than the team encountered in any other village, and the view from the top of the main Nyigma monastery is beautiful. An abandoned building that can be Marpha is well known for agricultural outputs, converted into a family luxury suite especially apples. Farmers here have created a variety of products that target the tourist market 18 NEPAL HERITAGE TOURISM REPORT directly, with dried fruits and jams being the most popular. There is a local distillery that makes apple brandy under the brand Marphak. Its tourism value is still small. Packaging and presentation of most products need to be improved and distribution, through lodges and hotels, initiated. Together with a possible visit to the distillery and tasting room, Marpha has real potential to add brand value to the destination and create additional profit centers for tourism entrepreneurs through short supply-chains of quality, potentially-certified agricultural outputs. To learn more about the Albergo Diffuso model and how it is applied in other parts of the world, see Annex. BENEFITS OF ALBERGO DIFFUSO • Nothing new needs to be created: Albergo Diffusos make use of existing infrastructure, with limited upgrades, to accommodate the modern tourist. • Heritage is preserved and shared: Heritage buildings and cultural traditions are preserved and celebrated. Local cuisine, festivals, and handicrafts become part of the tourism experience around the Albergo Diffuso. • Provides a unique tourism experience: Albergo Diffusos provide tourists access to the whole village and its cultural heritage. • Local benefits: Beyond job creation, local residents can reclaim pride in their homes and villages and view them in a new light. INVESTMENT PROPOSAL 2: JHARKOT HERITAGE HOUSE Jharkot village is located at an elevation of 3519 meters between Kagbeni, on the banks of the Kali Gandaki River, and the Hindu pilgrimage site of Muktinath. It is accessible by a short drive from Jomsom, which has a regional airport. Its population is around 60, but swells to around 400 in high season. 19 NEPAL HERITAGE TOURISM REPORT TOURISM SITUATION ANALYSIS Due to its proximity to Kagbeni, Jomsom, and Muktinath, not many tourists opt to stay in the village. Those that do are most likely pilgrims. There is therefore an opportunity to create higher-quality hotels for pilgrims in Jharkot. Pilgrim-tourists are typically from other countries in South Asia or domestic tourists. They travel in larger groups and seek convenience and comfort in their accommodations. There are currently two existing hotels in Jharkot. Room costs are around $4 to 5 a night. Foreign tourists from outside the region are mainly from France, Switzerland and Germany and spend between one and three days at the This abandoned mud-house in Jharkot is village. 800 hundred years old BENEFITS OF ADAPTIVE REUSE • Sustainability: Sustainability begins with preservation. Adaptive reuse is basically large- scale recycling. It reduces the need for new materials and other costs of demolition and waste disposal. • Climate friendly: Many heritage buildings were built with features that respond to the climate and location. These authentic structures provide the atmosphere that today’s discerning traveler seeks, while retaining the knowledge and wisdom of previous generations. • Heritage is preserved and shared: Local heritage buildings are protected and greater appreciation and preservation of local culture is encouraged. Other aspects of the village— such as cuisine, festivals, and handicrafts—become part of the overall visitor experience. • Provides a unique tourism experience: Historic buildings provide a glimpse of the past, while lending character and serving a new practical purpose. They contribute to the sense of place and atmosphere that is appealing to tourists. • Local benefits: Adaptive reuse can invigorate a community by creating alternative livelihoods and meeting the changing needs of the population. 20 NEPAL HERITAGE TOURISM REPORT APPLYING THE “ADAPTIVE REUSE” MODEL TO JHARKOT Our proposal is for an adaptive reuse development of the Heritage House in Jharkot and identified in the photo below. This abandoned residential building can be converted into a boutique luxury hotel. To learn more about the Heritage House model, see Annex COMPETITIVE EDGE Why tourists and tour operators will choose Jharkot: High-quality service and Part of a holistic Accessible accommodation destination Jharkot is a short drive There are very few The location of a heritage from Jomsom and its upmarket hotels in the boutique hotel in a regional airport. Despite Nepalese Himalayas. mountain village will the short distance, it Most hotels cater provide a variety of feels a world away from to budget travelers. activities for guests during the bustle of the regional Tourists from Bhutan, their visit—allowing for center. This atmosphere India, and elsewhere extended lengths of stay. and the convenience of in Nepal, indicate that Activities will include being close to Jomsom there is a sizable market hiking, mountain biking, will appeal to guests. ready to pay for upscale birdwatching, and cultural accommodations in activities, including adventure destinations. A cooking classes and boutique hotel in Jharkot heritage tours. Spiritual will have first mover and wellness elements advantage. More projects with local monasteries are likely to follow and also have tremendous a successful cluster can potential. Jharkot is an easy be built across Marpha, drive—or hike—to Kagbeni, Jomsom, and Kagbeni. Jomsom and Muktinath, expanding opportunities for exploration. 21 NEPAL HERITAGE TOURISM REPORT INVESTMENT PROPOSAL 3: NETWORK OF LODGES — MANANG Manang village is the main settlement of the valley, both from tourism and historical points of view. Manang village is the epicenter of all social, political, cultural, and administrative activities in the valley. The Gangapurna mountain peak and the Gangapurna Glacier are very close to Manang village. Manang village also has a cultural museum, movie theater, restaurants, and other recreational facilities. Manang village has amazing background views of snow-covered mountains, but the foreground aesthetics—modern buildings with no character—are not in sync with the heritage character of the village. The Network of Lodges concept is a chain of branded lodges along a specific trek, with the first lodge situated in a gateway like Pokhara or Kathmandu. Typically, there should be a minimum of three lodges, but five to seven being the optimum. The lodges will have different owners and managers but will attempt to jointly attract groups hiking along a trek as a lodge-to-lodge model. The lodges will be mid-end, with rates between $25 and $100, depending on the season, lodge, and type of room. The facilities will be comfortable and superior to the other market offerings. The lodges will have between 10 and 15 rooms each and collectively employ over a hundred people. ANNAPURNA TREKKING PATH OPPORTUNITIES The Annapurna trekking paths offer myriad opportunities to set up networks of lodges, as these treks can take several days and branded lodges at daily intervals will have many takers. The treks range from between ten and seventeen days, depending on where trekkers choose to begin and end their trek. The circular 17-day trek is still considered by many to be the best in Nepal for its dramatic scenery and diverse cultures. The trek typically begins in Dharapani or Chame, because approaching the daunting Thorong-La pass (over 5,000 meters) from the east is more manageable. It is also possible to start the trek in Jomsom, instead of ending there. 22 NEPAL HERITAGE TOURISM REPORT The concept of Network of Lodges has already been introduced in ACA along the Seven-Sisters Trek and in southern ACA. Guests can stay exclusively in lodges along a chain for a real ‘hut-to-hut’ experience, with a day’s walk from one lodge to the next. Depending on the target market, other itineraries are promoted, such as the Annapurna Sanctuary Trek, which include a mix of branded and local lodges. To learn more about the Network of Lodges model, see Annex INVESTMENT PROPOSAL 4: COFFEE HOUSE FRANCHISE CONCEPT— LOWER MUSTANG AND MANANG A BUSTLING HIMALAYAN COFFEE SHOP IN LOWER MANANG Location is everything in tourism development. In small, rural settlements, visitors prefer recognizable service providers and branded outlets offer a sense of security and quality. This creates an opportunity for lodge-owners to cooperate with providers of specialist products and services. A good example is a coffee shop that serves Nepalese coffee and tea, showcases local art, and hosts music nights. Such coffee shops, offering cultural events, add value to the attached hotel and 23 NEPAL HERITAGE TOURISM REPORT BENEFITS OF A COFFEE SHOP There are several benefits of having a coffee shop franchise in a mountain hotel: • The coffee shop can provide breakfast to hotel guests, if other breakfast options are unavailable. • Specialty coffee, highly appreciated by international tourists, is available throughout the day to hotel guests and contributes to a higher-end visitor experience. • The coffee shop can serve both hotel and outside guests. • The coffee shop can sell souvenirs to hotel and outside guests. • Most towns lack a gathering place and coffee shops can fill that gap with a welcoming atmosphere and events highlighting local music, art, and culture. These events would add value to travelers too. attract more customers. This kind of gathering salaries, brand signage, furniture, and staff place is lacking along the circuit and could be training. If the franchise is located in a hotel, added to existing or new developments through the coffee shop can provide breakfast and food lease or franchise agreements. They can also to guests while serving specialty coffees, which incorporate souvenir shops (surprisingly will find many takers among overseas visitors. absent from many of the villages) and sell local Besides, these shops can serve both hotel and handicrafts. outside customers and, if priced affordably, even locals, thus providing a gathering/resting place BRANDED COFFEE: We believe there are in towns and villages that lack them. opportunities for Nepalese or international coffee chains to expand into Lower Mustang and Moreover, the shops can sell local souvenirs or Manang, possibly through a partnership with hold cultural events that highlight local music, local lodges through a franchisee model. The food, art, and culture. Such offerings will add franchisee would benefit from a recognizable value for travelers. A high-quality espresso brand and consumers would benefit from machine will constantly send out the aroma of the consistency and oversight of the parent brewing coffee and act as a welcome beacon for company. The franchisees would be responsible travelers needing to refresh and rejuvenate in a for all capital and running costs, including rent, short time. 24 NEPAL HERITAGE TOURISM REPORT COMPETITIVE EDGE: Since there are currently no options to get high-quality coffee outside of Jomsom, an investor will have first-mover advantage. Not to mention that tying up with a recognizable brand will increase visibility across the region as a place to come to for fresh coffee and quality food. COMPETITIVE EDGE A customer will visit a franchise coffee shop in Manang or Lower Mustang for the following reasons: First-Mover Advantage Recognizable Brand High-quality Coffee There are currently no Customers will recognize The brand will project options outside of Jomsom and trust the brand, which consistency and quality to enjoy high-quality will have increased visibility and customers will to specialty coffee. across the region. appreciate that the coffee is always hot and fresh. 25 NEPAL HERITAGE TOURISM REPORT SECTION 3: Action Points to Improve Nepal’s Visitor Profile If Nepal is to become an important tourist destination that attracts higher-spending travelers, several issues need to be addressed, both from the government and the industry sides. During our survey, we noticed a few issues that need attention. In this section, we present action points that can be done in the short and medium term to improve the country’s visitor profile. IMPLEMENT BUILDING CODES The cultural heritage of Lower Mustang has huge potential as a tourism attraction if correctly preserved and rehabilitated. Unfortunately, in every Heritage Village we visited, we encountered uncontrolled growth, lack of building codes, and new construction that has no architectural language and is in total contrast to the vernacular stone architecture. Efforts are needed to convert existing modern buildings into aesthetically pleasing experiences. There is a need for policy to ensure preservation of the country’s rich architectural heritage. Most likely, this should be formed at the municipal level. Supporting municipalities to create planning, design, and development guidelines and building codes to conserve these important and unique structures is of paramount importance. The consulting team identified five villages in Lower Mustang that must begin to create building codes before they all become a hodge-podge of architectural styles: Tukuche, Marpha, Jharkot, Kagbeni, and Thini. CREATE HOLISTIC DESTINATIONS Lower Mustang has been identified as a location for soft trekking and pilgrimage, while both Lower and Upper Mustang are ideal for soft and hard adventure. The new road opens up the possibility for tourists who like adventure, but prefer not to trek. This includes families, older tourists, or tourists 26 NEPAL HERITAGE TOURISM REPORT with disabilities. Soft-adventure tourists are seeking a diversity of experiences on their holidays (while REDUCE hard adventurers are typically passionate about BARRIERS TO a single type of activity, like mountaineering or mountain biking). Therefore, there is a need to INVESTMENT expand offerings at the destinations to address Potential investors identified needs of soft-adventure tourists, which include several barriers they face natural, cultural, and heritage experiences. This may to investing in tourism include activities like cooking classes, day biking accommodations in Nepal: and hikes, via ferrata, and culinary experiences. • High interest rates; one investor commented that PLAN FOR SELF-DRIVE interest rates can be up to TOURISM 12.5 percent though the government has the ability As the road improves, and increased to lower them for certain sectors (as they did for solar accommodation offerings appear on the Western investments). side of the circuit, we predict an increase in self- drive tourism. This would see tourists renting cars in • Risk is hard to manage; for Pokhara or Kathmandu and driving themselves. We example, the road in ACA. recommend preparing to receive self-drive tourists, • Land acquisition process with proper information about the driving skills is unclear. In the Land required, proper signage for driving tourists, and Acquisition Act of 1977, increased safety measures on the road. permission to use public land for development projects lies with the federal government. The ambiguity OFFER HOSPITALITY in defining power between TRAINING federal and provincial governments, and the lack of clear procedures, has not Higher-value accommodations produce a higher allowed the bodies to enact number of jobs per room. An increase in the quality their own laws. of accommodations will generate the need for trained people to staff kitchens, front offices, • Working with local village municipalities is housekeeping, and coffee shops. Ensuring that challenging; they do not local people have the training required to work easily see the benefits of in these hotels will be important to benefit the foreign direct investment communities. (FDI). 27 NEPAL HERITAGE TOURISM REPORT STOP ALL FREE/LOW-COST ACCOMMODATIONS ACA is one of the most scenic places on the planet, but the problem is that trekkers often manipulate locally-owned and operated hotels and lodges to obtain free (they only pay for food) or dirt-cheap accommodation. No accommodation should be charging less than $20 a bed, let alone give it away for free. In our interviews, we noticed a sense of fear from local operators that if they did not make their accommodations free, they would lose business. This is not true because any tourist travelling from Europe, Australia, or North America is spending from $1,000 to $2,000 on air fare and would not have a problem paying $20 for a night’s accommodation. For Annapurna Circuit to regain its former standing as a quality destination, free or very low-cost accommodations should be abolished. UPGRADE BATHROOMS TO INTERNATIONAL STANDARDS One of our findings is that majority of hotels and lodges in the ACA region still have bathroom designs that are 50 years old (the shower area has no partition). This means that when a guest is taking a shower, soapy water gets sprayed all over the bathroom and on the commode. All modern bathrooms must have an enclosed shower area to ensure that the entire bathroom floor does not become wet. 28 NEPAL HERITAGE TOURISM REPORT SECTION 4: The Way Forward Nepal has recovered from various crises in the last 10 years and has shown exceptional resilience in re-establishing itself as a tourism destination. But, in a post-pandemic world, it is critical for the country to develop a coordinated strategic plan to ensure that recovery leads to improved value, inclusiveness, and sustainability in its tourism system. Globally, recovery measures are being Worldwide, structural and lasting changes in aligned under the guidance of industry the tourism market can be expected: organizations and governments in both 1. Consolidation of the market into destinations and source markets. Looking at several larger demand and supply- international trends, it seems clear that Nepal side companies (agencies and will have to adhere to the new global post- accommodation providers) with COVID 19 reality to reopen for tourism. This strong balance sheets, thus reducing means competition. • Increased focus on recognizable health 2. Digital innovations that will impact and hygiene standards, which will affect leisure travel and distribution channels capacity, traveler experience, and supply- and require a highly improved digital side costs presence and associated network • Bilateral agreements between specific coverage. markets and destinations in the 3. Likely changed demand over the next one initial recovery phase that will require to three years, starting with a preference application of electronic registration (for for smaller ‘own group’ travel to nature, example, vaccination passports) wilderness, and wellness destinations. • Competitive measures at destinations, including the reductions in government fees and levies, including visa fees. 29 NEPAL HERITAGE TOURISM REPORT Nepal therefore requires a clear roadmap to establish an improved and appropriate tourism offering in preparation for this new market system. This requires the Government of Nepal to address the following issues with clear time-frames: • Standard operating procedures and other requirements for tourism accommodation to start operating, including rural accommodation in the hills and mountains. • Confirmation by provinces/village councils that residents are comfortable with visitors and the trekking areas can be opened; supported by road/air access operations. • Visa requirements and documentations needed for entry (for example, digital health certificates, online visas, waived fees) by source market. • Acceptable insurance coverage (liability and travel insurance covering COVID-19 treatment and/or quarantine). These measures should ensure that both tourists and operators feel safe to return to Nepal. Communication will be key, along with clear government rules and policies to be shared online for all stakeholders. To safeguard Nepal’s competitive position in the medium to long term, a different product offering needs to be created. This requires the government to incentivize product diversification and standards-improvement to attract more diverse markets and increase daily spends by visitors. FINALLY This document has shown that the potential for a sustainable utilization of heritage resources in the Annapurna Conservation Area are excellent. This strategy can contribute to improving tourism competitiveness by attracting a higher-value tourist, while inspiring product quality and innovation that match the needs and interests of the global, post-COVID-19 market. 30 NEPAL HERITAGE TOURISM REPORT ANNEX: A Closer Look at Three Investment Models 1. THE ALBERGO DIFFUSO OR SCATTERED HOTEL CONCEPT The Albergo Diffuso concept originated in Italy, and directly translated, means ‘scattered hotel.’ It is a type of hotel that is spread across various heritage buildings in the same street or, in some cases, across a small village. For example, all the elements of a normal hotel (reception, gym, rooms, restaurant, common spaces, etc.) are in different buildings within a short walking distance of each other (usually a radius of not more than 200 meters). Albergo Diffuso is a tool to revive and rehabilitate heritage villages. Over 80 villages in Europe have been successfully converted into Albergo Diffusos. BENEFITS: • Nothing new needs to be created; Albergo Diffusos make use of existing infrastructure, with limited upgrades to accommodate the modern tourist. • Heritage is preserved and shared; not only are local heritage buildings protected, but so too is local culture, as the cuisine, festivals, handicrafts, etc. of the village become part of the holistic tourism experience that grows up around the Albergo Diffuso. • It gives a unique tourism experience; by providing tourists access to a whole village and its cultural heritage, their experience is expanded and improved. • Reduces abandonment of heritage villages. • Local benefits: beyond job creation, local residents can reclaim their pride in their homes as they view their heritage buildings in a new light. 31 NEPAL HERITAGE TOURISM REPORT REQUIREMENTS: The following is needed for a village to host an Albergo Diffuso: • Support of the local municipality or local administration and a critical mass of home owners (at least seven rooms are required; one house can have more than one room if needed). • Willingness of all parties to work together. • A management entity that all parties agree to is put in place. • The village has other services or activities to offer guests. • There are still local residents in the village (it cannot be totally abandoned). • There may be a need to amend local rules and regulations so that the Albergo Diffuso can benefit from any tax or other governmental benefits that are awarded to traditional accommodations. OWNERSHIP MODEL: There are two main ownership models, both of which require the support of the local municipality/ administration: 1. One investor purchases or leases all components of the hotel and runs it. 2. A consortium of investors or homeowners agrees to do it together. 2. ADAPTIVE REUSE OF EXISTING HERITAGE BUILDINGS Adaptive reuse is the process of retrofitting old In the pursuit of sustainable development, buildings, while allowing them to retain their Lower Mustang communities have much to historic integrity, and meeting the needs of gain from adapting and reusing abandoned modern hotel guests. Adaptive reuse is different buildings. Bypassing the wasteful process of from restoration or preservation, which demolition and reconstruction alone makes involve restoring a building to its original state. adaptive reuse attractive. Environmental Adaptive reuse actually changes the intent of benefits, combined with energy savings a structure to meet the modern user's needs. and the social advantage of repurposing a In the case of Lower Mustang, it would be place with valued heritage, make adaptive converting abandoned residential buildings and reuse an essential component of sustainable forts into hotels, visitor centers, museums, etc. development. Historic buildings provide a glimpse to visitors of the past while lending 32 NEPAL HERITAGE TOURISM REPORT character and serving a new practical purpose in need for new materials and the other costs of modern Lower Mustang communities. In many demolition. Preservation maximizes the use of ways, an adaptive-reuse project can invigorate existing materials and infrastructure, reduces a community by meeting the changing needs of waste, and preserves the historic character of the population. older towns and cities. The energy embedded in an existing building can significantly reflect Adaptive-reuse projects in the Lower Mustang the embedded energy of the entire life of the must include restoration of the buildings’ building. façades and parts of the interiors to look as they did in times past. Older buildings often Sustainability begins with preservation. Historic showcase aesthetics that modern buildings buildings were designed with many sustainable simply cannot afford. Built when skilled labor features that responded to climate and site. was cheap, these structures often boast a When effectively restored and reused, these higher attention to detail than those built today. features can bring about substantial energy Architectural elements include sculpted stone, savings. Considering historic buildings' original columns and capitals, elaborate masonry, climatic adaptations, today's sustainable vaulted ceilings, and carved wood—all of which technology can supplement inherent can be prohibitively expensive today. Adaptive sustainable features without compromising the reuse of such buildings allows a building to unique historic character. retain much of its character and aesthetics by incorporating these elements into the new Additionally, research has shown that even framework. sustainably-constructed new-built structures do not recoup energy outlays for approximately Preserving historic buildings is crucial to 30 years when measured against a renovated retaining Lower Mustang’s heritage and history. existing building. It is also environmentally friendly and practical, basically large-scale recycling. It reduces the 3. THE NETWORK OF LODGES CONCEPT A network of lodges allows for a type of hut-to- Hut-to-hut hiking can be simple; for example, hut hiking on established trails. It allows people the Tour to Mont Blanc has simple refugios to hike for days without carrying overnight or cabins, with basic bunks that tourists can equipment (some hut-to-hut routes facilitate sleep in as they circle the peak. But it can also transfer of baggage via porters, pack animals, or be more luxurious. In Peru, Mountain Lodges of vehicles) and, importantly, is a more expensive Peru runs a seven-day trek along the Salkantay option, introducing a higher-value type of Trail. Their lodges feature hot tubs and five-star tourism to mountain areas that typically cater dining. The size of lodges in these models can to lower-value trekking tourists. vary from six beds to over 300. 33 NEPAL HERITAGE TOURISM REPORT The lodges involved in the network are most MODEL likely new constructions or recent constructions that require upgrading. For the most part, they We recommend that the network of lodges do not include refurbishing heritage homes, be in such a way that tourists can hike a trail unless by chance such a structure is located while continuously staying in the same level along the designated trail. of accommodation. To ensure consistency, the lodges would need to have a formal association, Within ACAP, the network of lodges concept though they would not necessarily need to be can be explored away from the new road, to owned by the same company. open up new wilderness areas to nature-based adventure lovers who want and expect a quiet, It is also possible to start with mid-range tented pristine environment on their trip to Nepal. accommodations to gauge interest in a certain route. Trek Guatemala offer simplified glamping. While the Wolwedans in Namibia: The simple bed in the desert is tents are normal, inside the raised beds have down a top seller and retails at over $700 a night. The bed in duvets and real reading lights. Trek Guatemala charges itself has no value, but the pristine wilderness and high $100 per night. levels of service delivered around this site command premium prices. EXAMPLE OF A TREK DONA LAKE TREK The Dona Lake Trek or the Rhododendron Trek itinerary was presented by Tripple Gurung, a hotel operator, as an eight-day trail that would be suitable for a series of accommodations. The trail starts in Tal and ends in Dharapani, and crosses waterfalls, Gurung villages, views of Manaslu Hemal, and ends at the stunning Dona Lake. 34 NEPAL HERITAGE TOURISM REPORT BENEFITS Scheduled departures: Scheduled departures The benefits of a network of lodges are: provide more consistency to the supplier, who can better plan. High Value: Not only do guests to the lodge pay a higher daily rate than they would if they were Enhance conservation of area around camping, they also spend a significant number lodges: If the network of lodges is located of days within the same network, increasing in a remote area, it will also contribute to the value to the collective or the company. additional conservation awareness in these The introduction of a higher value tourism areas, as the lodge management and staff product into rural areas has multiplier effects can have responsibilities around conserving as it requires high-quality food, linens etc., that their surroundings and/or reporting back command higher prices. These can typically to ACAP management. They may also have be sourced locally (though training may be specific responsibilities when it comes to trail required). maintenance. Tourist convenience: If the network of lodges KEY CONSIDERATIONS follows one trail, and the tourist can book the entire journey at once, and is guaranteed Access: Ideally, the huts are reached only a consistent level of service, this will be seen by walking. This causes logistical challenges as highly convenient both to the FIT² tourist in terms of bringing in supplies and taking and any outbound operators who may resell out waste, as well as emergency response these packages to their client base. Operators situations. But, lodges around the world in Nepal report a renewed interest in the manage these challenges by, for example, destination from mid to higher-end outbound having their own vegetable gardens, buying as operators who are searching products like this. locally as possible, composting, etc. Linkages: Lodges require a range of goods Lodge size: Around the world, mountain and services that can be procured from nearby lodges vary in size and style. While hiking huts communities. This includes food, handicrafts, in Europe tend to be small and basic, with linens, etc. between 8 and 18 beds, some in the U.S. have a capacity of over 100. Since the objective in Local job creation: Lodges require cleaning Nepal is to increase the economic value of staff, management, serving staff, etc. These tourism to ACAP, we suggest that lodge sizes positions can be filled by nearby community should be around 30 beds, to accommodate two members. hiking groups at a time (with the average size of a hiking group being 12). The lodge should 2 Free Independent Traveler 35 NEPAL HERITAGE TOURISM REPORT also have accommodation for porters and Trails: It is important to ensure that the guides. The style should maintain a sense of trail meets consumer demand. For example, place and contain comforts such as hot water, stretches between each lodge should not be fans, western toilets, etc. and command a price more than 12 to 18 kilometers per day. Higher- between $70 and $100 per night. Ideally, the value tourists typically have less holiday time lodges will use reusable energy sources, like available than budget tourists; so, the trek solar and provide the following: should be between five and seven days. The trails could be a circuit (with the start and • Comfortable single or double beds (no end being at the same place) or a traverse bunk beds) (where the trail goes from A to B, and hikers • A restaurant with full board and good have alternative transportation to return from food hygiene the end point). The trails should be in areas of • Western toilets outstanding natural beauty. • Hot water showers Marketing: A good consumer and marketing • Insect free in summer/warm in winter plan needs to be in place to ensure key target • Highly-trained staff markets are aware of the new product. • Luggage transfer options: one of the key reasons travellers choose a network of lodges is the opportunity to hike with a day pack while heavier luggage is transported from lodge to lodge. Normally, travelers are limited and guided in the type and weight of their luggage (a 20 kg duffel bag, for example). This is a service that could be provided by local entrepreneurs. 36 July 2021 Contacts: International Finance Corporation 2121 Pennsylvania Avenue, N.W. Washington, D.C. 20433 www.ifc.org