Kathmandu: Long queues of foreign tourists arriving at Tribhuvan International Airport may suggest that Nepal’s tourism industry is enjoying a strong recovery. Official tourism statistics also point to continued growth, with more than 1.2 million tourists visiting Nepal in the last fiscal year and over 650,000 foreign visitors arriving in the first seven months of 2026 an increase of around 7 percent compared with the same period last year.
However, the positive tourist-arrival figures have not translated into improved financial performance for several of Kathmandu’s leading five-star hotels.
The latest financial reports of major hospitality companies listed on the Nepal Stock Exchange (NEPSE) show that, with Soltee Hotel as a notable exception, several leading hotels are either reporting substantial losses or experiencing sharp declines in profitability.
Hyatt Regency Swings from Profit to Heavy Loss
Taragaon Regency Hotels, which operates Hyatt Regency Kathmandu in Boudha, has posted one of the sector’s most concerning financial performances.
The company, which recorded a net profit of Rs. 468.5 million last year, reported a net loss of Rs. 705.7 million this year.
Its operating revenue fell dramatically from more than Rs. 1.52 billion to just Rs. 171.9 million. The company also recognized losses of more than Rs. 990.7 million related to impairment of property and other financial adjustments, further weakening its financial position.
Following the loss, earnings per share turned negative at more than Rs. 35. Meanwhile, shareholders’ equity declined from around Rs. 3.12 billion to Rs. 2.32 billion.
Soltee Defies the Downturn
Amid widespread challenges in the luxury hospitality sector, Soltee Hotel Limited has emerged as a major exception.
The historic hotel increased its net profit by 16.51 percent to Rs. 761.1 million. Its total business turnover reached approximately Rs. 3.148 billion, representing growth of more than 13 percent from the previous year.
Despite spending more than Rs. 540 million on food and beverages and over Rs. 670 million on employee-related expenses, Soltee generated an operating profit of Rs. 922.4 million.
Its relatively low financial costs, which stood at around Rs. 7.1 million, have helped the hotel maintain profitability despite broader pressures facing the hospitality industry.
Radisson Swings into Loss
Oriental Hotels Limited, operator of Radisson Hotel Kathmandu in Lazimpat, has also fallen into the red.
The hotel recorded a net loss of Rs. 47.4 million this year, compared with a net profit of Rs. 43.7 million in the previous year. This represents a decline of more than 208 percent in profitability.
Its operating revenue declined by 4.60 percent to approximately Rs. 1.001 billion.
During the year, the hotel spent around Rs. 300 million on employee expenses, Rs. 120 million on food and beverages and Rs. 170 million on administrative expenses. In addition, interest expenses amounted to Rs. 139.6 million, pushing the hotel into a net loss.
Its earnings per share also turned negative at around Rs. 4.
Forest Inn: Revenue Rises, but Losses Deepen
Forest Inn Limited, which operates the Holiday Inn Resort in Budhanilkantha near Shivapuri National Park, presents another unusual case.
The resort’s operating revenue increased by 39.63 percent to Rs. 190.3 million. Despite the significant growth in business, however, its net loss increased by 42 percent to Rs. 244.5 million.
The major factor behind the loss appears to be the company’s substantial debt burden and associated interest costs.
Of the Rs. 190.3 million in revenue generated during the year, approximately Rs. 155.4 million went toward financial costs, primarily bank interest. The remaining income was insufficient to cover other operating expenses.
The resort has more than Rs. 4 billion in non-current assets and paid-up capital of around Rs. 2 billion, but its heavy financing costs remain a major challenge.
Hyatt Place Continues to Struggle
City Hotel Limited, which operates Hyatt Place Kathmandu under the Golyan Group, has also continued to report losses, although the size of its loss has narrowed.
The hotel posted a net loss of Rs. 173 million, down 12.77 percent from the Rs. 198.4 million loss recorded in the previous year.
Its operating revenue increased by 3.94 percent to Rs. 506 million. Although total revenue exceeded Rs. 530 million, high operating expenses, depreciation of Rs. 139 million and interest costs of Rs. 185.8 million prevented the hotel from returning to profitability.
The company currently has paid-up capital of around Rs. 3.01 billion, while its reserve fund remains negative at Rs. 116.6 million. Earnings per share stood at negative Rs. 5.74.
Tourism Growth and Hotel Performance Tell Different Stories
The financial performance of these five major hotels highlights a growing disconnect between tourist arrivals and hotel profitability.
While Nepal continues to attract increasing numbers of international visitors, higher arrivals alone have not guaranteed stronger earnings for luxury hotels. High financing costs, operating expenses, depreciation, asset impairment and intense competition appear to be placing significant pressure on the sector.
The figures suggest that Nepal’s hospitality industry may need more than simply an increase in tourist arrivals to restore profitability. Improved room occupancy, higher spending per visitor, stronger pricing, cost control and a reduction in financing costs could be crucial for the sector’s financial recovery.
