Kathmandu: Barahi Hotel is currently deeply mired in debt. The hotel chain, which operates four-star hotels in Pokhara and Kathmandu, has for the last four years been unable to repay its principal loans and has only been paying the interest.
Currently, the hotel has taken loans of approximately Rs 1.4 billion from various banks. This debt is 18 times its equity and more than five times its operating profit.
The debt increased further when the hotel began operations in Kathmandu two years ago and recently added more rooms in both hotels. Barahi Hotel’s accumulated loss still stands at 77 percent of its paid-up capital. ICRA Nepal, the credit rating agency, has indicated that the hotel’s occupancy and operating income must be examined closely amidst this immense debt and accumulated loss.
To manage the situation, the company has reduced its ownership in Barahi Housing and Leasing Company from 70 percent to just 10 percent. Selling these shares has somewhat improved the company’s loss position.
However, Barahi is still seeking more debt. The company, which initially got a rating for a long-term loan of Rs 94 million, has now increased the rated amount to Rs 1.32 billion.
Despite the debt crisis, the company’s revenue has increased significantly. In the last fiscal year, the company did business worth Rs 65 crore. Compared to previous years—Rs 53.8 crore in 2024, Rs 22.9 crore in 2023, Rs 11.7 crore in 2022, and Rs 1.7 crore in 2021—this marks substantial growth.
Along with revenue, the company’s profit margin has also improved. The operating profit margin reached 43 percent last fiscal year, up from 37 percent the previous year.
However, despite good revenue and profit margins, the Debt Service Coverage Ratio (DSCR) is very weak. A DSCR of above two is generally considered good. But Barahi Hotel’s ratio is only 1.6, albeit an improvement from 0.4 in 2022.
Furthermore, while a total debt-to-operating profit ratio of up to four is considered manageable, Barahi’s ratio of five indicates the company is struggling under its debt burden.
Despite being in crisis due to debt, some of the hotel’s indicators are satisfactory. The hotel’s occupancy rate was satisfactory in the last fiscal year.
The occupancy rate was 78 percent in 2024 but decreased to 74 percent in 2025. However, revenue increased due to a rise in room rates. According to the hotel, room rates were increased by 21 percent in 2024 and by 25 percent in 2025, leading to a 31 percent increase in revenue in 2025.
Revenue from Food and Beverage is also satisfactory. While 48 percent of revenue comes from room sales, the remainder comes from Food and Beverage.
Established in 1992, Barahi Hotel has been operating two four-star hotels in the country: a 102-room hotel on Pokhara’s Lakeside and a 100-room hotel with modern facilities in Kathmandu’s Thamel.
The company operates its hotel on its own land in Pokhara, while the land for the Kathmandu hotel is under the name of Barahi Housing and Leasing, in which the hotel now holds a 10 percent stake. The Thamel hotel features a casino, beauty store, cafe, and travel desk on its ground and first floors.
The hotel, owned by Pokhara’s Hari Prasad Poudel and his family, benefits from the Poudel family’s five decades of experience in the hotel industry. Hari himself has been active in tourism and hospitality for four decades. The Poudel family operates hotels under the Barahi brand not only in Kathmandu and Pokhara but also in Chitwan.
Along with Hari, ownership of Barahi Hotel lies with his sons, Biplab and Vaibhav Poudel, and his daughter, Basantidevi Poudel.
The Barahi Group was established 40 years ago with the operation of a 10-room Paradise Guest House in Pokhara.
Hari Prasad Poudel, the founder of Barahi Hospitality, started the Paradise Guest House with 10 rooms on Pokhara’s Lakeside. Facilities were later added to this hotel, and it was renamed Hotel Barahi in 1983.
Currently, Hari’s sons, Biplab and Vaibhav, are spearheading the Barahi Group’s growth. Under Barahi Hospitality, they operate Barahi Jungle Lodge in Chitwan, Hotel Barahi in Pokhara, Sarangkot Mountain Lodge, Awas Pokhara, and Barahi Kathmandu.
The group has also launched a fine-dining restaurant and The Beach Bar and Lodge in Pokhara.
Meanwhile, the Poudel family is preparing to upgrade Hotel Barahi Kathmandu to a five-star standard. The hotel in Kathmandu’s Keshar Mahal, which previously operated with 67 rooms, has now been expanded to 100 rooms. With the aim of achieving a five-star classification, the hotel is working to increase its capacity.
An additional Rs 2.5 billion is being spent on the hotel’s upgrade. An Environmental Impact Assessment (EIA) commitment has also been prepared for operating the upgraded hotel.
The new building’s first and second floors will be operated as halls. The facility will include a hall with a recreational centre on the first floor, 22 rooms on the second floor, 6 rooms on the sixth floor, and 6 rooms on the eighth floor, totaling 101 rooms.
Barahi Kathmandu served 2,343 guests in 2021/22, 5,091 in 2022/23, and 6,935 tourists in 2023/24. The hotel’s clientele consists of 21 percent Nepalis, 47 percent Indians, and 32 percent other nationalities.
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