Kathmandu: Although 2025 proved to be a deeply unsettling year for Nepal’s tourism industry, visitor arrivals showed resilience and modest improvement despite widespread negative circumstances. The Gen Z-led protests and severe floods and landslides projected an unfavourable image of Nepal internationally, creating fears of a sharp downturn in tourism.
During protests on September 23 and 24, even some of Nepal’s most prominent international chain hotels were attacked, sending shockwaves through global travel markets. While these incidents initially damaged Nepal’s reputation as a safe destination, sustained positive messaging and promotional efforts helped revive confidence toward the end of the year, leading to encouraging tourist inflows.
According to a study by the Nepal Tourism Board, 15 hotels actively engaged in tourism services were damaged during the protests, including four in Kathmandu and others across the country. Among them, the Naxal-based international chain hotel Hilton Kathmandu suffered the largest loss, with estimated physical damage of Rs 7–8 billion. Built with an investment of around Rs 8.5 billion, the 172-room hotel had only begun operations in mid-2024.
Other hotels that sustained damage include Hyatt Regency in Boudha, Barnabas Museum Hotel in Baluwatar, and Hotel Aloft. Hotels in Kathmandu, Pokhara, Bhairahawa, and Jhapa were among the worst affected, leading the Hotel Association of Nepal (HAN) to describe 2025 as a tragic year for tourism.
The Tourism Board’s report also notes that several Pokhara-based hotels, including Hotel Sarowar, Bar Peepal Resort, Hotel Goodwill, Hotel Adamas, and Hotel Bagaincha Resort, were impacted. In Bhairahawa, Dreamland International, Tulip, Maurya, and Radisson hotels suffered damage, while Mechi Crown Plaza in Jhapa’s Dhulabari area was also affected. These incidents initially fuelled fears of a collapse in tourist arrivals.
Despite these setbacks, tourist arrivals in 2025 remained slightly higher than in 2024. Over the first 11 months of the year, Nepal welcomed around 1.06 million tourists, about 5,000 more than during the same period last year. With December figures yet to be added, authorities expect the final tally to show a more positive outcome.
While tourist growth remained largely stagnant, the number of five-star hotels in Nepal continued to rise. Over the first 11 months of 2025, tourist arrivals increased by only 5,000 compared to the same period in 2024, when 1.055 million visitors arrived. In contrast, Nepal now has 33 five-star hotels licensed by the Department of Tourism, a figure many consider disproportionate to demand.
Of these 33 hotels, five are currently closed, and according to HAN, many of the remaining hotels are struggling to maintain even minimum occupancy levels. While a few hotels report healthy occupancy, most are operating below expectations.
HAN General Secretary Sajan Shakya said the tourism sector remained clouded by uncertainty following the Gen Z protests. Negative messaging during peak tourist season raised fears of prolonged damage, but the industry managed to regain momentum within a short period. Hoteliers, he said, have focused on maintaining service quality despite adverse conditions, which has been crucial to sustaining their businesses.
The Nepal Tourism Board credits aggressive promotional campaigns and crisis management efforts for countering negative narratives related to protests, floods, and attacks on international hotel chains. Officials say Nepal’s history of weathering major political upheavals helped reinforce confidence, allowing tourism numbers to avoid decline and instead register marginal growth compared to last year.
Alongside new investments, the number of closed five-star hotels has also increased. Hotels have shut down due to weak internal management, financial stress, or damage from protests. Currently closed properties include Fulbari Resort in Pokhara, Hilton Kathmandu, Hyatt Regency, Hotel Annapurna, and Shangri-La Hotel.
Fulbari Resort, once a flagship five-star property in Pokhara, has remained closed for years due to debt burdens and operational challenges, with no clear timeline for reopening. Although its owner managed to halt auction proceedings over unpaid loans, the hotel has not returned to operation despite rising tourist arrivals.
Looking ahead, 2026 is expected to bring more positive momentum to Nepal’s tourism sector. Tourist arrivals are projected to rise, and several new five-star hotels are set to open.
Hotel Annapurna in Kathmandu, closed since the COVID-19 pandemic, is preparing to reopen as “Annapurna Square,” a mixed-use commercial complex with a shopping mall. Business leaders Min Bahadur Gurung and Umesh Shrestha are leading the rebranding effort, and the hotel remains closed during renovations.
Hilton Kathmandu, which suffered the most severe damage during the September protests, is expected to remain closed for at least a year while repairs are completed. Most of its permanent staff have been temporarily deployed to other Hilton properties abroad and are expected to return once operations resume. Hyatt Regency has also shut down for renovations, sending employees home on minimum pay for a year, with plans to recall staff from November 2026.
Meanwhile, Shangri-La Group has closed two of its hotels in Kathmandu and Pokhara for complete reconstruction, demolishing existing structures to build new facilities.
Despite these closures, new hotels continue to enter the market. A five-star Royal Tulip Resort in Chitwan has already begun operations, although it is yet to receive formal classification approval. Overall, Nepal currently has 33 licensed five-star hotels, with more in the pipeline.
Looking ahead, 2026 is expected to bring more positive momentum to Nepal’s tourism sector. Tourist arrivals are projected to rise, and several new five-star hotels are set to open. Royal Tulip Resort in Budhanilkantha, Kathmandu, will begin operations, while Shangri-La Group plans to launch three five-star hotels—two in Pokhara and one in Chitwan.
International hotel brands are also expanding their presence. InterContinental will operate properties in Pokhara and Chitwan, while Indigo will enter another Shangri-La resort in Pokhara. All three are scheduled to open in 2026.
HAN says more hotels are under development, although an exact number is difficult to determine as some properties only approach the association after operations begin.
Beyond hotels, Nepal is also expanding its adventure and entertainment tourism infrastructure. According to the Department of Tourism, 56 adventure and recreational activity operators are currently registered, and growing interest in such activities suggests more licenses will be issued in 2026, further diversifying Nepal’s tourism offerings.
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