Tourism Business Response to Multiple Natural and Human-Induced Stressors in Nepal

The Tourism–Disaster–Conflict Nexus

ISBN: 978-1-78743-100-3, eISBN: 978-1-78743-099-0

ISSN: 2040-7262

Publication date: 12 November 2018


Nepal’s rich cultural and natural heritage – the basis of a flourishing tourism industry that contributes 8% to the country’s GDP – suffered heavily during the Gorkha earthquake that shook the country in April 2015. Recovery was challenged by a political-economic crisis that hampered mobility and delayed access to resources. Given the economic importance of tourism to Nepal, a revival of this industry was considered vital by public authorities and private sector representatives. This chapter discusses the response mechanisms of the tourism industry in Kathmandu to two sequential, overlapping stressors that brought challenges to the business sector beyond the usual. Interviews with hotel managers and owners, tour operators and trekking company owners have revealed that coping strategies varied from business-as-usual to completely new paths. To what extent do multiple disruptive events challenge a tourism industry to diverge from established paths of economic development? How did Nepal revive its tourism industry? In-depth interviews with tourism industry stakeholders brought forth evidence of unusual collaborative action towards a quick restoration of tourist arrivals and a positive image of the destination. Furthermore, a handful of companies have shifted their entire business strategy.



van Strien, M. (2018), "Tourism Business Response to Multiple Natural and Human-Induced Stressors in Nepal", Neef, A. and Grayman, J. (Ed.) The Tourism–Disaster–Conflict Nexus (Community, Environment and Disaster Risk Management, Vol. 19), Emerald Publishing Limited, pp. 87-104.

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Nepal’s Tourism Sector and Two Disruptive Events

Business sectors in Nepal face regular challenges from short- and long-term disturbances, as the country is sensitive to natural disasters and its political-economic climate remains unstable. The country is challenged by human-induced stressors such as frequent changes in government, ethnic clashes, shortages in key resources like water and energy, and inflation, and is vulnerable to natural stressors such as fires, floods, landslides, earthquakes and climate change. Despite its complex and dynamic context, Nepal has achieved a gradual growth of its tourism industry. Contributing around 8% to GDP and bringing in 25% of foreign exchange earnings (World Travel and Tourism Council, 2017), the tourism sector now forms a key pillar of the Nepalese economy. It is estimated to have created over a million jobs and numerous business opportunities.

Tourism is viewed as a contingent business, because variables continuously affect its functioning and operations directly or indirectly. It is considered a complex system consisting of autonomous agents (Hall, Prayag, & Amore, 2018). Therefore, tourism entrepreneurs are aware of a certain level of risk to disruptive events and generally have mechanisms in place to cope with minor disturbances. In areas where natural and human-induced events regularly occur, institutions, businesses and individuals likely develop ‘cultures of coping’ (Bankoff, 2003, p. 1), which offer a certain level of resilience. Yet, occasionally, a more extreme event causes a serious disruption, which challenges existing coping mechanisms and resilience. Natural and human-induced events are considered disruptive when their impact on a community causes damage, disruption and causalities that leave the affected community or business unable to function normally without outside assistance (Benson, Twigg, & Rossetto, 2007).

In recent years, growing challenges for the global tourism industry from disruptive events have provoked ample research on post-disaster and post-crisis response and recovery. While the tourism industry is considered vulnerable to disruptive events (Laws & Prideaux, 2005), it has also been coined as a mechanism of resilience to help in the recovery process (Benediktsson & Karlsdóttir, 2011; Luthe & Wyss, 2014). At the same time, ways in which enterprises innovate and move beyond established paths in response to, adapting to, and recovering from disruptive events remain poorly understood (Bhamra, Dani, & Burnard, 2011; Hall, Malinen, Vosslamber, & Wordsworth, 2016).

Ranke (2015, p. 226) acknowledges that disruptive events can appear as single, sequential or combined in their origins or effects. Yet, they are frequently analysed as autonomous incidents occurring in an identifiable time and space, often overlooking the complex diversity of additional factors and long-term issues that influence the outcome of recovery efforts (Calgaro, 2011). There is little knowledge about how the tourism industry experiences successive multiple shocks and stressors and how it may influence a destination or company’s established paths of operation and management.

Two unusually disruptive events, the Gorkha Earthquake and the political-economic crisis, that took place in Nepal over the course of 2015 created a ‘unique laboratory’ to explore tourism business behaviour and change through a different lens (Hall et al., 2016, p. 251). Disruptive events create situations in which a business is forced to respond to a new context. In that way, a disruptive event or a series of disruptive events can be a catalyst for changing business models (de Vries & Hamilton, 2016; Faulkner, 2001; Paton & Johnston, 2006) and can influence the wider business environment, potentially bringing about longer term transformative processes that may alter the course of the entire tourism industry and the destination.

This chapter aims to contribute to this discussion by analysing the influences of the earthquake events and political-economic crisis on recovery of Nepal’s tourism industry during a period of two years from the moment of the first earthquake shock. It is hypothesised in this chapter that, despite the financial and managerial challenges for entrepreneurs, the tourism industry in Nepal has materialised quick changes and shown resilience.

Disruptive Events as Catalysts for Change

In order to survive and succeed in a highly competitive and continuously evolving business environment, tourism destinations and enterprises must manage change. In this context, resilience can be seen as a function of the competitiveness of an enterprise or destination and the responsiveness of the tourism supply chain (Sheffi & Rice, 2005).

Businesses are considered ‘interlinked systems of people and nature, driven and dominated by the manner in which they respond to and interact with each other’ (Walker & Salt, 2006, p. 8). Business resilience is synthesised by Dahles and Susilowati (2015, p. 37) as the ‘capacity for an enterprise to survive, adapt, and grow in the face of turbulent change’. Business resilience is usually more narrowly confined to the ability of an economic sector or individual enterprise to adapt, thrive, and oftentimes innovate in response to the changing business environment using the range of resources and capacities available to them (Orchiston, Prayag, & Brown, 2016). Business resilience can be related to the extent to which business stakeholders can self-organise and reframe business operating conditions, sometimes through attrition or innovative practices (Dahles & Susilowati, 2015).

It has been suggested that business continuity and the overall recovery of an industry from disruptive events are often intertwined. Communities (incl. societies, industries, destinations) aim ‘to thrive in an environment characterized by change, uncertainty, unpredictability, and surprise’ (Magis, 2010), which can materialise at the personal and collective level. The long-term success of individual business actors, as well as of the whole destination, may heavily depend on the collaboration, integration and coordination of each actor’s individual resources, activities and services (Beritelli, Bieger, & Laesser, 2007). A third influence comes from the market. Gersch and Goeke (2007) recognise that change processes need to be analysed in an integrated way, taking into consideration individual companies, market levels and the entire tourism industry value chain. They highlight that, on the one hand, a business can actively create and drive the transformation process on higher levels of aggregation, like markets or industries, but on the other hand they can also be forced and driven by it. It is therefore considered important to understand the resilience and competitiveness of the tourism system as a whole and of individual enterprises within the system.

In tourism, variability over time is considered the norm rather than the exception (Hall, 2017). Many changes occur more gradually and may be considered incremental or continuous (Burnes, 2004), such as climatic changes or societal changes. These long-term events are harder to observe and may in many cases remain unobserved entirely or are only observed by a small group of people (Duineveld, Van Assche, & Beunen, 2017). Yet, this chapter focuses on more sudden disruptions caused by out-of-the-ordinary or extreme events that cannot be easily ignored, as they pose urgent threats to societal core values and life-sustaining systems (Comfort, Boin, & Demchak, 2010). Such ‘vigorous’ events are ‘unlikely to escape observation and are likely to create significant changes in social systems’ (Duineveld et al., 2017, p. 379) and challenge existing coping mechanisms and resilience, often leading to action (e.g. policy changes, forms of collaboration).

In post-structuralism, it has become widely acknowledged that disruptive events and stressors are socially constructed: their impact is a product of people’s vulnerability that has been created by social, economic and political conditions (Cannon & Müller-Mahn, 2010). By extension, this means that the construction of resilience is also a contingent product of the social system (Blaikie, Cannon, Davis, & Wisner, 2014), which therefore has to be defined in the individual context of a society and its geographical setting (Shakya, 2009). In this context, resilience is further defined as the capacity of an individual, community or system ‘to absorb disturbance and re-organise while undergoing change’ (Folke, 2006, p. 259), so as to sustain essential basic structures and functions and occasionally transform. This follows the post-structuralist line of thinking in the theory of social systems that considers the social and the environment as mutually constitutive, entwined and entangled in radically different ways, constituted by and within the social system itself, as observations and delineations in the environment depend on the inner logic of a social system (Duineveld et al., 2017). In this context, Comfort et al. (2010, p. 8) debate what ‘state of return’ resilience would need to accomplish in a system. They argue that even a return to the pre-shock state is really the emergence of a new status quo.

A growing body of literature acknowledges that disruptive events can be catalysts for change (de Vries & Hamilton, 2016; Faulkner, 2001) and that it is this changed reality that people, enterprises and destinations must adapt to (Paton & Johnston, 2006). In that context, resilience should be viewed as the ability to ‘bounce forward’ and ‘move on’ following a disruptive event (Manyena, O’Brien, O’Keefe, & Rose, 2011).

It has been suggested that the ‘bouncing forward’ notion of resilience can be linked to transformation in a system (Mishra et al., 2017). Transformability is considered the ‘capacity to create a fundamentally new system when ecological, social, economic, and political conditions make the existing system untenable’ (Walker & Salt, 2006). Faulkner (2001) argues that a disruptive event can start a chain reaction that makes the pre-disruption situation no longer viable and will promote creativity and innovation. Transformation to a ‘new normal’ post-disaster, not just returning to a previous state, reflects the growing emphasis of disaster as a catalyst for change (de Vries & Hamilton, 2016; Faulkner, 2001; James & Paton, 2015). It has become acknowledged that disruptive events may lead to new configurations or structures that are more effective than those that are replaced (Prideaux, Laws, & Faulkner, 2003).

This idea is reflected for instance in the empirical concept of ‘build back better’, intended as a holistic approach towards reconstruction and recovery that encourage a holistic approach to reconstruction, giving equal importance to economic recovery as well as physical recovery (Mannakkara & Wilkinson, 2013). However, the concept is also criticised for having multiple interpretations of the term ‘better’ (Kennedy, Ashmore, Babister, & Kelman, 2008).


Acknowledging the interlinkage of industry recovery and business continuity, in this chapter I review recovery scenarios of individual enterprises as well as the tourism system as a whole. Resilience thinking allows an examination of ‘various change factors through a single lens’ and provides insights into how individual actors, networks, destinations and regions can withstand and adapt to both long- and short-term changes (Luthe, Wyss, & Schuckert, 2012).

To understand how Nepal’s tourism industry and individual enterprises within the system responded to the disruption of the Gorkha earthquake and the political-economic crisis that followed the promulgation of a new constitution, I analyse a variety of primary and secondary qualitative data. It has been recognised that assumptions and interpretations of resilience frameworks should be validated with qualitative data regarding perceptions and experiences of tourism-related stakeholders and their network (Luthe & Wyss, 2014). A qualitative approach conducted in three phases over a period of two years utilised over 40 semi-structured interviews with owners and managers of tourism enterprises and over 35 unstructured interviews with tourists through random sampling at various places across the country. Results have been verified through in-depth interviews with policy makers, representatives of international organisations, institutions and tourism industry stakeholders. These primary research methods have been complemented by a number of secondary resources, such as visitor arrival statistics from the Government of Nepal and newspaper articles that have been collected throughout the two years.

Recovering the Tourism Industry

The April 2015 Gorkha Earthquake ‘shook up’ the country’s tourism industry in the middle of its spring season, which is a peak period for tourism in Nepal, secondary to the autumn season. The event triggered numerous geological hazards over the following months, including landslides and avalanches that have further devastated the country (Sharma & Shrestha, 2015). The risk of earthquakes is well known in Nepal, as the country is situated on the diffuse collisional boundary where the Indian Plate under-thrusts the Eurasian Plate. Though earthquakes cannot be predicted, fault lines are generally vulnerable areas and in recent years seismologists have measured accumulated amounts of energy below Kathmandu. Despite these warning signs, the majority of tourism entrepreneurs and destinations were relatively unprepared for this disruptive event. The epicentre of the event was situated in Gorkha district at 80 km northwest of the country’s capital city Kathmandu, thereby heavily affecting the general administration of the country and the core of its tourism industry (as the majority of tourists enter the country through the airport in Kathmandu).

The earthquake had a disastrous impact on tourism. Rough estimations by tourism industry representatives said that more than 50% of tour bookings made prior to the earthquake had been cancelled during the months following the earthquake event. Visitor arrivals dropped by 70% in the months following the earthquake, in comparison to the same period in 2014. Given the economic importance of tourism to Nepal, a revival of this industry was vital.

Checks and Balances

When tourism industry leaders had recovered from the initial shock of the earthquake event, they realised quick action would be needed to reduce the impact of the disruptive event on tourist arrivals in the upcoming autumn peak season and the next year. For instance, a rapid assessment by the Netherlands-based Centre for the Promotion of Imports from developing countries (CBI) in July 2015 highlighted that many European countries issued a general travel warning for the entire country of Nepal instead of providing geo-specific advice, though the majority of the country had been declared safe for travel within the first month following the earthquake. Besides the strong influence on a traveller’s decision, this advisory would also negatively influence the decision of insurance companies to issue travel coverage for this destination. An assessment was needed to determine what destinations and travel routes were safe to host visitors, so they could be promoted. It would be impossible to assess all tourism destinations at once, so high volume destinations were prioritised.

Public–private initiatives commenced the first official trail assessment concerning two popular trekking routes, Annapurna and Everest, which together account for 80% of its adventure tourism (roughly 120,000 and 80,000 visitors per year respectively). Miyamoto, a global structural and earthquake engineering firm, carried out the assessments under the leadership of the Government of Nepal. UKAID-supported Samarth Nepal Market Development Program, funded the Annapurna assessment and the Everest assessment received funding from World Bank’s International Finance Cooperation (IFC) and Intrepid Travel, an Australian tour operator. Both key mountain destinations were declared safe for trekking, with minor points for repair (in Annapurna only 3% of accommodation needed minor repairs and in Everest one section of the Everest Base Camp trail needed to be rerouted). The reports did highlight some areas along trekking trails as having structural potential risk due to existing intrinsic features or geometry, for example, very high rock slopes and areas with evidence of historic rock fall and slope instability.

Restoring Destination Image

Media brought much needed attention to the earthquake emergency situation of Nepal. However, the flood of images of death, destruction, chaos and human suffering adversely affected the country’s destination image and eroded its competitiveness (Ketter, 2016). In addition, misrepresentation of some of the facts resulted in misunderstanding of the reality in Nepal by the international community. For instance, in much of the media communication the actual affected area was not clearly mentioned; rather it was implied that the event had devastated the country as a whole. One visitor from Germany mentioned,

I expected to see much more damage than I actually did, especially in Kathmandu. But in fact, it all turned out to be either under control or cleaned [up] already when I arrived; or perhaps the media in Europe were giving wrong information…

Several tourists mentioned they had feared that the airport would be damaged and the city of Kathmandu would be in ruins, let alone the situation they would encounter in more remote areas along the trekking trails. It seemed that information was also confusing or absent, leaving visitors to make their own assumptions. One tourist from the Netherlands highlighted:

Damage to buildings was most apparent. In the countryside, I saw no flattened buildings, but I did see many buildings with huge cracks and structural damage, and collapsed roofs. I could not tell if the landslides were earthquake-related or natural. I assumed [it was] from the earthquake.

At the time when the earthquake occurred, the Nepal Tourism Board (NTB) – an autonomous public–private partnership organisation established in 1999 and tasked with marketing of the country as a touristic destination – had become virtually inactive. The Board had not been functioning properly for years, due to political manoeuvring and rampant irregularities. After the expiration of the CEO’s tenure in October 2011, the selection process was halted for over four years as appointment remained controversial. On top of this, a scandal was brought to light in 2014 accusing over 20 NTB officials of corruption practices.

Yet, in the aftermath of the earthquake the tourism industry realised that this marketing body plays an active role in ensuring a more objective information sharing regarding the status of tourism destinations within the country. As one company owner mentioned:

Our main target was to relay the message to all our clients and outbound partners about the actual conditions of Kathmandu and the trekking trails. It was crucial for these messages to come from our Nepal Tourism Board as the overarching sector representative.

This brought stakeholders together in an effort to revive the NTB to send out strong messages about the safety of the country and the process of recovery of affected destinations.

The Nepalese tourism business community found themselves in a situation different from their everyday operations. Managing earthquake disruptions, relationships, and risks put them in a dynamic and complex context where short-term goals – that of recovering the sector and bringing tourist arrivals back up as quickly and efficiently as possible – aligned. This motivated them to collaborate on actions towards retrieving a positive image.

In an effort to counterbalance falling arrivals and booking cancellations, a social media campaign was initiated by a group of tourism entrepreneurs and taken up by the reviving NTB, bringing out positive messages about Nepal, showcasing the recovery and crowd-sourcing tourists’ stories about their experiences travelling in the country. The ‘NepalNOW’ campaign that was active over a period of two years, mainly used social media (Facebook, Twitter, Instagram) and launched a website with an accurate account of the recovery and where tourists were invited to write their travel stories to share their experiences and impressions. Nepal’s tourism stakeholders came together in a concerted effort to revitalise the tourism industry in the country. One company owner mentioned ‘Usually Nepali agents do not work together, but during the earthquake we all put an effort in the joint NepalNow marketing campaign’. The success of the campaign translated into the ‘EcuadorNOW’ tourism recovery campaign, launched in response to the April 2016 Ecuador earthquake with support and guidance from the Nepalese team.

Complications due to a Political-Economic Crisis

In the aftermath of the earthquake and while still suffering from aftershocks, Nepal was swept into a political-economic crisis that heavily affected the availability of supplies. Following a decade-long civil war that had come to an end in 2006, Nepal finally promulgated a new constitution in August 2015 that had been in the making for eight years. The formulation process experienced years of delay caused by disagreement over a handful of politically sensitive issues, the most important being the demarcation of federal provinces (Manandhar, Varughese, Howitt, & Kelly, 2017) and ethnic issues largely unaddressed during the civil war (Miklian, 2008). Heavy protests arose in the south of Nepal in response to the new constitution that soon escalated into a five-month long blockade at the border between Nepal and India. This indicated that the differences between the country’s leading political parties and its marginalised social and ethnic groups, who felt excluded from this deal, are not yet resolved. The blockade was used as a tool to push for an amendment to accommodate the demands of people in the southern regions of Nepal, with which India shares both cultural and political ties.

The situation resulted in a supply crisis, as Nepal imports a majority of its commodities from India (including petrol, gas, cooking oil and medicine). Due to these trade disruptions, the cost of daily life and business went up as many commodities were no longer available in their usual quantities. While China could have potentially offered alternatives, the main mountainous border crossings were blocked due to landslides as a consequence of the earthquake.

Interestingly, the political-economic crisis did not seem to affect arrival numbers to a significant extent (see Table 1). Anecdotal evidence from interviews suggests that many tourists were unaware of the political-economic event until they arrived in the country, hence it did not influence their decision to take the journey. A repeat tourist from UK who visited Nepal early November highlighted: ‘In Kathmandu and Pokhara there were less cars on the street, but we saw tourists everywhere, hikers, bikers…’ expressing how in his perspective tourists were still visiting the country in relatively large numbers, despite the supply crisis. It was mainly transportation that tourists experienced as inconvenient due to the fuel crisis. A Spanish couple highlighted: ‘Getting to medium and long-distance destinations within the country turned out to be quite a challenge. In the end even getting back to the airport for my flight back home took quite some effort.’ A Chinese tourist mentioned: ‘Taxis were quite expensive. Sometimes we took a taxi, but most of the times we walked’. Yet, some tourists also highlighted positive implications of the fuel crisis: ‘We were happy to experience more clean air in Kathmandu and a lot less traffic’. ‘The hospitality and friendliness of the Nepali people made me forget the negative parts’ a German tourist highlighted.

Table 1.

International Visitor Arrivals to Nepal for 2014–2017, Based on Official Statistics from the Department of Tourism.

2014 2015 2016 2017
January 70,196 38,616 42,235 62,632
February 69,009 58,523 60,821 84,061
March 79,914 79,187 76,444 106,291
April 80,053 65,729 60,214 88,591
May 62,558 17,569 46,683 62,773
June 50,731 18,368 38,852 55,956
July 46,546 22,967 48,115 42,240
August 59,761 38,606 66,341 73,778
September 52,894 39,050 74,670 68,634
October 80,993 56,584 89,281 112,492
November 76,305 58,304 72,990 99,804
December 61,158 45,467 76,356 82,966
Total 790,118 538,970 753,002 940,218

Besides some airlines limiting their number of flights due to limitations for refuelling, there were not many factors that contributed to a further drop in arrivals. Visitor arrivals even showed a slight seasonal upward trend from their deep fall during October and November 2015 (see Table 1). At the same time, the numbers were not sufficient to revive cash flow for the tourism businesses. Hotels in Kathmandu and Pokhara reported 10–40% of their usual October occupancy. Variation in occupancy rates appeared to be related to the market segments the hotels work with, as business travellers and development workers formed the main market, while leisure travellers largely shunned the country. Some hotels in Manang and Sagarmatha National Park authorities were reporting 50% of their usual visitor numbers in October, highlighting the slow revival of trekking during the autumn season. In Mustang district, local authorities observed an increase in domestic visitors during October and November. This seems to be in line with a trend of increasing domestic visitors to Muktinath and Kagbeni over the last two years.

For most tourism enterprises this political-economic crisis situation severely hampered their recovery process. Although visitor numbers in the second half of 2015 and first half of 2016 recovered to about 70% of 2014 (see Table 1), it has to be taken into account that these also involved rescue and recovery workers, who may not have contributed much to the income of the tourism industry. In addition, Ghimire (2016) found a reduction in tourist spending, from US$43 to US$35 per day. Tour and trekking companies highlighted that the political-economic crisis was as disruptive to their business as the earthquake, and it drew heavily on their already vulnerable financial situation.

Though most companies maintain a small storage of fuel and gas, as brief periods of shortages generally happen every year, these back up supplies quickly ran out. At the same time, tourism service providers were determined to ensure their clients had a good experience during their trip, which one company described as a ‘never say no attitude’. Companies were determined to ensure a quality visit to the tourists who had come, despite the recent earthquake. One company manager explained: ‘We tried to manage all difficulties, bear the risks and costs, to satisfy our customers’. As a consequence, companies were forced to adapt their services and cover extra costs to ensure minimal disruption to the trip itinerary of their clients. For instance, fuel on the black market costed five to six times the usual price, hence prices for transportation soared. Also, with limited cooking gas and food supplies available, many restaurants adapted their menus and opening times. One company highlighted: ‘During the crisis, our clients’ safety was our major concern so we made sure that they had food and safe transportation’.

Industry Recovery

Within the tourism industry, earthquake recovery processes and the influence of the political-economic crisis varied per enterprise. Among 40 companies interviewed, not a single business had to close its doors, although six of the companies (15%) highlighted that in the second half of 2017 – two years after the earthquake event – they were struggling to survive. At the same time, 22 companies (55%) had managed to restore their business and could see a gradual increase in clientele, and the remaining 12 (30%) were doing better than before the disruptive events.

In the first months after the earthquake, with virtually no clients on the horizon for several months, entrepreneurs had to find creative solutions for mounting operational cost and funding any physical recovery costs. The main challenge for most tourism companies was to sustain their staff. About 28 companies (70%) managed to stay afloat thanks to savings and a few – especially those with structural damage to their office building or equipment – took a loan from family or a bank. A few companies sold some of their asset.

Many companies were forced to cut operational costs. They found ways of reducing costs temporarily, such as not engaging seasonal staff, cutting all regular staff cost beyond basic salary (larger companies offering health insurance maintained that), and reducing rented office space.

Tourism stakeholders in Nepal identified that improvement of safety measures and stronger communication strategies were key to regaining clientele. Several companies highlighted that they used the slower months after the earthquake to train their staff and engaged with sustainability certification as a means of generating positive visibility for their business. It was believed that this would help international partner companies and clients regain trust in their operations, especially in terms of safety:

It was important for our international partners to understand what was happening in Nepal and to see that our company was able to handle their clients as usual. We needed to prove we could ensure their safety.

The majority of companies highlighted that one of their most successful strategies throughout both events had been their re-designing and broadening of potential offerings. It was something within their control and it provoked positive responses from international partner companies as well as their markets. For instance, around 40% of international tourists visit mountain areas during their Nepal trip for trekking, mountaineering, and pilgrimage activities. The temporary loss of some key trekking destinations (Helambu, Langtang, Rasuwa) caused companies to think of alternatives:

Some of our most sold destinations were severely damaged, so we needed to propose innovative new itineraries to our partners and clients. Though we are aware of many places in the country, before the earthquake it was more difficult to bring these under [sic.] their attention

Also, many clients expressed interest to learn about the earthquake event and the recovery process of Nepal, which stimulated some companies to design special itineraries:

We wanted to show the positive aspects of our country. The earthquake brought to the front the amazing artisans we have in Nepal that still work according to traditional craftwork and became involved in repairing the damaged buildings and artefacts. Hence, we developed a special excursion, which we called Rise of the Artisans.

Furthermore, it was found that the earthquake pushed many companies to establish or improve on a web presence. This allowed smaller firms direct access to their markets and several interviewees mentioned that it had helped them recover their business and even identify new markets. As one company highlighted:

It saved us so much money when we abandoned our office space in the tourist district and redefined our company online. Most of our clients were already communicating with us and booking via email and social media.

Prior to the event very few local companies had adopted web marketing, online purchasing, and social network capabilities. It requires an investment that at that time did not seem to be a priority. Yet, when coping with external challenges entrepreneurs realised that no company or destination can maintain its competitive position without a solid online presence in our contemporary interconnected world. ‘We wonder why we didn’t do this before’.

One of the main learning points the companies highlighted is the need for a contingency fund. ‘One thing we learned - do keep reserve funds!!!’ Many have taken immediate action ‘We have started saving money in our company account’ and backed up supplies: ‘We have started storing basic foods and fuel that would last us for at least a week’.

Corporate Social Responsibility

In the aftermath of the earthquake, the provision of immediate emergency relief, restoration of basic services and rebuilding of damaged infrastructure were of paramount importance. Despite mounting cost of human resources and other challenges to their business operations, Nepalese tourism companies found it important to become involved in relief and recovery efforts.

It deserves recognition that the Nepalese tourism industry took a pro-active role in emergency response and contributed massively to the delivery of shelter, food and health care: ‘We re-channelled our period of low business to greater causes like relief operations’. Thanks to their knowledge of and access to communities along trekking routes in some of the most affected districts, they found their way into remote areas that had become inaccessible by road and air. Tourism entrepreneurs became active in multiple ways. As donations are a common practice among businesses in Nepal, many companies donated food, blankets, tents and other supplies. One company mentioned: ‘We undertook immediate action, like collecting monetary and in-kind donations and provided immediate supports’. In some instances, entrepreneurs supported the reconstruction of family homes for staff that came from earthquake affected areas. One company highlighted: ‘This guide has worked for our company for more than eight years. When we heard that he had lost his family home, we felt we needed to help’. In other instances, companies supported communities in destinations where they closely collaborate with local enterprises.

Most companies did have a small number of clients and several of these became involved in reconstruction and rehabilitation volunteering services. This way, the companies maintained some income and they were able to extend support to the affected areas. One company highlighted: ‘We had some clients before earthquake, who later turned into volunteers and were working day and night for immediate relief under our leadership’. Another company mentioned their work with volunteers later on resulted in new bookings:

We hosted as many volunteers as we could manage to work for the immediate relief and reconstruction and they later spread good words about Nepal and our company. We were fortunate to receive referral clients.

The relief and recovery support provided by the Nepalese tour companies revealed a challenge to some of them, as they were undertaking these actions under their for-profit company registration. ‘Our social actions became taxed as part of our business, which made the effort much more costly than expected!’ Taking their initiatives forward, many companies started envisioning space for a corporate social responsibility component that would be registered as a separate entity, such as a foundation.

Bouncing Forward or Transformation?

In this section I aim to examine if Nepal tourism industry is transforming by reviewing the response mechanisms of tourism destinations and entrepreneurs to the Gorkha earthquake and political-economic crisis that brought challenges to the business sector beyond the usual. The findings suggest that there was a brief sense of unity and altruism that led to productive collaboration. This enhanced the resilience of the tourism business community and contributed to a swift revival of primary elements in the sector, such as the national tourism board and the main trekking destinations, and boosted recovery of destinations in some of the hardest stricken areas. There is clear evidence of entrepreneurs that have reformulated their company strategy and are doing different and better business than before the earthquake event. Though, the current research does not bring forth sufficient evidence to reveal transformation into a fundamentally new system.

Post-event recovery does not occur uniformly and may vary per destination and enterprise. High volume tourism destinations were prioritised for damage assessment, in an effort to minimise the decline in tourist arrivals. Tourism development policies can prioritise certain types of investment, infrastructure and facilities following an event to fast-track the return of the destination to normal operations (Dredge, 2015).

The challenges posed by the earthquake appear to have stimulated temporary forms of collaboration among public and private tourism industry representatives to revive a positive image of the destination and bring tourist arrivals back up. The socio-cultural context of doing business in Nepal is generally considered to discourage collaboration between companies with competing goals. Years of political instability and a culture of bribery and kickbacks (Sharma, 2014) have created a business culture of mistrust. The disappearance of old institutions and networks with the establishment of Nepal as a republic in 2006 opened up a new era of entrepreneurship and innovation (Sharma, 2014), though at the same time it reinforced deep-rooted traces of mistrust. The state has not been able to provide predictable and fair rules of the game for the operation of the market and instability due to complex social economic issues and geo-political limitations prevails (Shakya, 2013). One company manager referred to a folk tale of an international frog race, during which the Nepalese frogs never left their bucket as they were pulling each other’s legs down. Gabler, Richey and Steward (2017) found that the circumstances created by a disruptive event like an earthquake are often so exceptional that private and public entities engage in short-term collaboration to recover and rebuild their communities and markets. They argue that these kinds of collaborations mediate an enhanced resilience of the tourism supply chain.

The most significant physical impacts of the Gorkha earthquake were localised, yet the tourism economy was affected heavily across the entire country. The logistical impacts of the earthquake were not exclusively confined to the geographic area of the event. Though most tourism companies could find ways to cope with majority of the logistical challenges, it was more challenging for them to reach potential visitors as media communication of destruction and chaos negatively affected the image of their destination. The misconception of risk, especially when exaggerated by the mass media, can cause a significant level of unnecessary concern among potential travellers, as safety and physical security are two of the primary conditions for development of a tourism destination (Lepp & Gibson, 2003). Tourism stakeholders identified that improvement of safety measures and stronger communication strategies were key to regaining clientele. This resulted in intense yet temporary collaborations (Gabler et al., 2017) on restoring the image and reviving the national tourism board, with the fundamental purpose to accelerate the tourism industry’s recovery from the disruptive event.

Interestingly, despite the operational and financial challenges brought to tourism businesses by the political-economic crisis event that followed the promulgation of Nepal’s new constitution, this did not seem to hamper the growth of tourist arrivals much and thus had little negative impact on the recovery of the tourism industry. Causevic and Lynch (2013) mention that it is virtually impossible to develop tourism if potential visitors perceive political instability and interpret this as a threat to their personal safety, though it appears that tourists travelling to Nepal had little to no awareness of the event and tourism companies managed to minimise the effect on travel itineraries and experiences. In 2017, two years after the earthquake event, the country welcomed 940,218 international tourists – a 19% increase from the year prior to the earthquake.

Several mountain destinations where trekking trails and properties of tourism service providers were heavily affected physically by the earthquake benefitted from support of urban-based tour and trekking agencies that felt a heightened sense of social responsibility towards their country. Giving back to society is common among all kinds of businesses in Nepal. Prevailing religions in Nepal – Hinduism and Buddhism – look optimistically at the act of giving, as charity is believed to positively motivate the afterlife (Adhikari, 2012; Chapagain, 2010). Furthermore, business relationships with enterprises in the affected areas and staff originating from those areas developed an assumed responsibility. Disaster research studies demonstrate that in the immediate aftermath of a disaster community resilience and unity, strengthening of social ties, self-help, heightened initiative, altruism, and pro-social behaviour more often prevail (Auf de Heide, 2004).

In line with this, some companies mobilised volunteer tourists to support recovery efforts in affected destinations. This became a successful channel that kept some business running for the urban-based companies as well as their partners in the recovering mountain community. Destinations affected by real or imagined risk factors need to target tourists with a higher tolerance for risk (Lepp & Gibson, 2003). Companies also learned that they needed to initiate foundations to avoid taxation over these voluntary activities.

From a financial point of view, tourism enterprises generally identified that both events had affected their businesses equally. Lack of business after the earthquake made it difficult to cover costs of human resources, while the political-economic crisis raised the cost of supplies and services. Despite these challenges, a large number of enterprises managed to rediscover a state of ‘normalcy’, where they felt their business had been restored to a condition similar to the one before the earthquake. A small number of enterprises were even doing better than before the event. It has become generally acknowledged that disruptive events can bring considerable opportunities for business people and the overall destination, making the pre-event business model unviable and stimulating creativity and innovation (Badri, Asgary, Eftekhari, & Levy, 2006; Faulkner & Vikulov, 2001). It appears that being exposed to disruptive events has provoked some companies to take more risk in adapting their business strategies. Particularly, pending decisions regarding cost-cutting changes have become easier to push through.


In many ways, Nepal’s tourism industry has proven to be resilient in the face of disruptive events, such as an earthquake and a political-economic crisis. Despite limited conscious preparedness, the familiarity with a disorderly political and economic setting and previous disruptive events have brought forth a ‘culture of coping’ (Bankoff, 2003). The industry appears very capable of ensuring positive experiences for tourists coming in, even under these highly unusual circumstances. As a result of lessons learned in the aftermath of the earthquake, such as the benefit of having savings and back-up supplies, the industry may potentially prove more resilient in the face of future disruptions. This leads me to believe that Nepal’s tourism industry has indeed ‘bounced forward’ (Manyena et al., 2011), though it remains to be seen whether this will transform into a fundamentally new system (Walker & Salt, 2006).

A disruptive event such as an earthquake could stimulate a divergence from established paths of economic development and transform that entire system, though – as disruptive events are socially constructed – there may also be elements that hamper a full transformation from taking place. A useful consideration that has been proposed views resilience on a spectrum from passive to transformational resilience (Sudmeier-Rieux, 2014), recognising there may be resistance to change. For instance, although unusual forms of collaboration emerged within the tourism industry that led to successful recovery efforts, these appear to have been short-term efforts. The business culture of mistrust appeared to be reinforced once the sense of heightened altruism, triggered in the immediate aftermath, wore off. At the same time, transformation into a fundamentally new system may take more than two years to materialise and become visible. Although hard to predict, according to Gersch and Goeke (2007) such qualitative indicators of change as this research has found at the level of individual businesses reveal trend and migration paths that, in the longer term, may contribute to industry transformation.

Multiple narratives underlie the contested choices and scaled actions of the Nepalese government, industry and civil society in the aftermath of the earthquake event. Some of these have been reflected in this chapter. Although the earthquake event has been a catalyst for changing a handful of business models and motivated preparedness, there is no evidence yet that indicates it influenced the wider business environment in a transformative manner.

The limited number of tourism industry representatives and tourists that have been interviewed for this research may be inadequate to capture the multifaceted nature of recovery across so many affected destinations within Nepal and may thus not be fully representative of the entire industry. Also, in some instances recovery processes may take more time, beyond the time frame of two years that was taken for this research, especially processes of the transformative kind. Hence, it may be possible that transformative elements that are still in the making have been overlooked.

The dynamic context of Nepal remains filled with events, some more disruptive than others. At the time of writing, the nation embarked upon the implementation of its federalist constitution. It remains to be seen how the country will cope with devolving tourism authority and responsibility from the Department of Tourism and the NTB to the states, and how this may stimulate tourism destinations to engage in new path creation.


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