Transforming Tourism into Nepal’s Primary Growth Pole

Transforming Tourism into Nepal’s Primary Growth Pole

The Institute for Integrated Development Studies (IIDS) is conducting a major research study on transforming tourism into Nepal’s primary economic growth pole. With Nepal receiving approximately 1.15 million international tourists in 2024 but capturing only USD 40.8 in average daily spending, well below regional peers, the sector remains a significant underperformer relative to its potential. The study examines the conditions, investments, and reforms required to scale annual arrivals to 5 million within a decade, generating an estimated 4 million jobs and contributing to a structural transformation of Nepal’s economy. A central enquiry of the research is that no credible path to this target exists without reforming Nepal’s aviation architecture, including restructuring the national flag carrier. The research pursues six core objectives: assessing the current performance and binding constraints of Nepal’s tourism sector; identifying strategies to increase arrivals, extend duration of stay, and raise per-capita spending; estimating the infrastructure and investment requirements needed to support large-scale tourism growth; analyzing policy, institutional, and governance gaps affecting competitiveness, including legislative barriers under the Public Procurement Act; developing multi-pathway growth scenarios and macroeconomic projections; and producing strategic recommendations and a 10-year implementation roadmap. The study draws on secondary data analysis, comparative benchmarking against peer tourism economies, scenario modelling, and structured stakeholder consultations, with outputs designed for use by government, private investors, and financing institutions.