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Title: An Analysis of Employment and Investment in Tourism Industry A Case Study of pokhara
Authors: Sharma, Laxmi Kanta
Keywords: Tourism Industry;Income generation
Issue Date: 2011
Publisher: Faculty of Economics
Institute Name: Central Department of Economics
Level: M.Phil.
Abstract: Pokhara is the second popular tourist destination of Nepal. In 2010 2,30,799 tourist have visited Pokhara. It is a gateway to Annapurna Round Trekking Route which is one out of ten world’s best ecotourism destination of the world. Pokhara is also famous for its unique geographical feature and natural beauty.It is also known as the city of lakes and caves. Theother attractionsofPokharaare International MountainMuseum,Paragliding and Peace Stupa.There has been a tremendous increase in tourist number and businesses and very big size of investments have been made in the industry.At present 43 types of tourism businesses are operating in 25 different locations of Pokhara. Without considering the economic impact,there has been a massive investment in theindustry.Therefore, thisresearch work primarily investigatestherelationship betweenemploymentandinvestment.For thispurpose,thebusinesses are categorizedinto four main categories to test whether business types and locations have any impacts on employment. Linear regression analysis with dummy variables was used for the estimation. The analysis reveals that the overall mean employment level of tourism industry inPokhara is 5.33.The range of employment in overall industry is 1 to 150. The totalinvestment in the industry is Rs.15079.12million.Out of total, 86.44percent amountis invested in Fooding and Lodging business, and similarly, 1.86 percent investment is made in Travel Related business. In a similar way, 8.72 and 2.89 percent of investment has been made on Retail Trade and Tourist Product business respectively. The total annual income generation from Tourism Related business is Rs.2699.75 million. On the basis of regression estimation, Hotel and Lodge, Guest House, Bank andFinance, Restaurant, Tours and Travels and Handicraft shops are most revenue generating businesses respectively. In average, with every million Rupees of investment on Hotel and Lodge, the employment of 13.66 persons can be generated.Likewise, Bank and Finance can also create employment of 13.34 persons with the same level of investment. Similarly, the paragliding business can generate employment of 10.71 persons.Similarly,Guest House and Departmental store can vi generate employment for 9.36 and 6.44 persons respectivelywith everymillionRupees of investment. On the basis of econometric estimation, the most employment generating locations areNagadhunga, Prithwichowk, Sabagrihachowk, Mahendrapool andSrijanachowk. InNagdhunga and Prithwichowk area, there is high possibility of creating employmentof 47 persons with every one Million ofinvestment.Chhorepatan is theworst locationin terms of employment generation, which can create only 2.30 persons employment(least) with one Million Rupees of investment. The total direct employment generated by the industry in Pokhara is 12343. But if we look into the broad picture of employment in different business category,Fooding and Lodging businessoccupies 54.64percentageshare of total employment. In a similarway, out of total employment, Institutional sources occupy 17.52 percent,RetailTrade businesses occupies 14.53percent,Tourist Product business occupy 7.38 percent and Travel Related business occupies only 5.37 percent share. The model reveals that the overall employment generating capacity of the tourism industry in Pokhara is 5.40 persons in average. The value of employment differs widely from business types to business locations. The mean employment in Travel Related businesswithout introducing investment is 5.41.Similarly the mean value ofemploymentfor Retail trade,Tourist Product andFooding and Lodging business are2.87,2.86 and 8.19 respectively. But when investment is introduced in the model, the value changed to3.89, 4.02 and 6.96 respectively. The result shows that the additional investment in Retail Trade business and Tourist Product business can generate more employment. The annual revenue generation from the whole industry is Rs. 2699.75million,ofwhich Fooding and Lodging business comprises 75.81 percent, Travel Relatedbusiness occupies 3.21 percent, and Retail Trade business occupies 9.33 percent where as Tourist Product occupies only 5.48 percent of the total income generated in a year. Among the top five businesses which can create highest revenue are Hotel and Lodge,Guest House, Bank and Finance, Restaurant and Tours and Travels. Fruits and vii Vegetable shop is the least income generating business which can hardly generate Rs.0.98 million of income annually. Pokhara has the high potentiality of growth in tourism industry because of its high capacity of generating income and employment. Hotel,Lodge, Guest House, Bank and Finance,Restaurant, Tours and Travels and Handicraft Shop sare the major sources of income and employment in the industry.Toincrease employment, the industry demands high dosesof investment particularly inRetail Trade businessand Tourist Product business.The investment in Fooding and Lodging business and Travel Related business can generate good income but there will not be a proportional growth in employment.The industry is dominated by Fooding and Lodging business and it demands a policy shift for business diversification. Nagdhunga, Prithwichowk, Sabhagrihachowk, Mahendrapul and Barahipath to Hallanchowkare the area which have more potentiality of generatingemploymentandincome. The findings of this study may be more prescriptive for new investors in the field andalso it may contribute to develop wider tourism data base of the industry for Pokhara. Similarly Nepal Government,Ministry of Tourism and Civil Aviation (MOTCA),Nepal Tourism Board, Tourism Council and other related institutions and stakeholders may use this result for proper policy designing and planning.
Appears in Collections:Economics

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