Hotel construction delayed as China reluctant to provide furniture

KATHMANDU: Hotel construction works in Nepal have been delayed after China showed its reluctance to provide adequate furniture and furnishings.

Work has stalled due to the non-availability of necessary furniture for two hotels of Siddhartha Hospitality Group and Barahi Group, which are currently under construction and aim to go live from April 14.

It is said that most hotels in Nepal bring furniture and other items from China because of the “cheap price”.

Currently, Sheraton Hotel, Barahi Hotel, Bhangeri Resort, Dusit Thani and Hyatt Palace are under construction.

Similarly, the Sheraton hotel, also under construction in Thamel, owned by the former president of the Non-Resident Nepali Association, will take another year and a half to enter into service.

The construction cost of the hotel is estimated at Rs 10 billion and the cost will increase further by Rs 2 billion due to China’s undeclared blockade.

Lately, hotels have been struggling as China has not prioritized selling home decor items related to furniture in Nepal.

Sheraton Hotel

Nepali businessmen are struggling after China prioritized Europe, America and other countries to export its furniture.

Many Nepali traders import goods from China due to the overall cost, as it is expensive to import furniture from other countries, including Europe.

China is also one of the biggest exporters of wooden furniture. According to data from the General Administration of Customs of China, the export value of Chinese furniture and parts in 2018 was $53.69 billion.

Some of the major countries to which China exports furniture are the European Union, the United States, Hong Kong, Japan, and Vietnam.

According to the National Economic and Social Development Statistical Release 2020, the export value of furniture and furniture parts was USD 63.50 billion in 2020, up 12.2% from the previous year.

During the Covid-19 pandemic, almost every industry has been impacted to one degree or another. However, China’s custom furniture market is expected to reach USD 52.54 billion by 2024.

According to information released by China National Furniture Association (CNFA), there are 50 furniture manufacturing clusters in China, covering the six regions of Pearl River Delta (PRD), Yangtze River Delta (YRD), Bohai Rim, in northeast China. , central China and western China.

PRD is China’s largest furniture manufacturing base with the highest concentration in the furniture industry, the highest production output and the strongest integrated support capability.

Next come Fujian, Zhejiang, Jiangsu, Shandong and Shanghai, which have an advantage in product quality and operation management.

In the YRD region, led by Shanghai, the furniture industry is developing rapidly, with the highest average growth rate in the country. The northern and northeast regions, with Beijing at the center, have a strong furniture industry base and rich timber resources.

Hilton Hotel

Construction of the five-star hotel by the Siddhartha Business Group of Hospitality in Bhairawahawa has been delayed due to non-availability of furniture and interior decor items. The construction period will be extended and the cost will also increase due to the non-availability of goods on time.

Similarly, Barahi Group is building a five-star hotel with a shopping complex in Thamel, Kathmandu.

The operation date should be delayed in the arrival of essential items, including furniture.

According to Yogendra Bikram Thapa, Sales and Marketing Manager of Barahi Group, construction works of the hotel are still ongoing.

The hotel was also in preparation to operate from Nepali New Year 2079. However, he said that due to the shortage of goods, the operation period will be extended and the cost will also increase. The hotel has completed 80% of the construction works. He said they were importing the necessary materials from India.

At present, traders have been holding containers in Chinese ports for three months by paying waiting fees. The Chinese market being cheaper than the others, many hoteliers have chosen China.

Similarly, Sajan Shakya, secretary general of the Hotel Association of Nepal (HAN), said the organization is ready to cooperate if it faces the problems of procuring goods from China by lobbying the government. .

Due to the pandemic, the hotel sector has been hit hard and the delay in hotel construction has increased investment, he added.

Additionally, hotels are forced to operate with 5% occupancy during the pandemic.

Investment in the hotel is done once and production will return to normal. So he suggested not to worry and calm down on this matter hoping it will ease gradually.

Traders have started smuggling goods from China through India as China has not cooperated to facilitate the import of goods.

Goods imported from China have been stopped at Kerung port for about a year and traders have stopped passing goods through Kerung after suffering the loss of billions of rupees.

It is said that it was difficult to import goods through the Kerung and Tatopani border crossings due to the Chinese authorities.

“It takes about 40/42 days to ship goods from China by ship via India. The goods arrive in Nepal within 20/22 days when brought from Tatopani and Kerung without any hindrance. Traders are forced to import goods through India,” said political analyst and former ambassador to Denmark Vijay Kant Karna.

He calls this a type of economic blockade by China.

According to the trade protocol, a country must provide the route to the ocean for a landlocked country.

However, China is also violating the protocol, he said, adding that only two to three trucks have entered Nepal lately.

Similarly, residents of districts bordering Nepal have been allowed to enter up to 20 kilometers into China to purchase goods hassle-free.

“However, China is currently obstructing easy access to the Nepalese people, which shows China’s extremist attitude,” he added.

Businessmen and locals complain that the two checkpoints (Tatopani-Khasa and Rasuwagadhi-Kerung) with China have not been working properly for a long time.

The Kerung and Tatopani checkpoints, which were closed after the onset of Covid-19, were not fully functional.

Although up to 250 trucks used to enter Nepal daily with goods, currently only 20 vehicles enter Nepal daily through these checkpoints.

According to Rasuwagadhi Customs Office, only nine trucks enter Nepal daily from Rasuwagadhi checkpoint and 11 trucks from Tatopani checkpoint.

According to the Nepal Trans Himalaya Border Commerce Association, hundreds of trucks loaded with goods are stuck in China because the Chinese side did not allow them to enter Nepal.

According to local hotelier Tenzing Tamang, Nepalese businessmen have encountered problems and truck owners have also suffered because of China.

They say the container operators have not even been able to pay the bank interest.

“Up to 200 loaded trucks came from China every day. Currently no more than 5 trucks are entering Nepal,” transporter Arjun Poudel told Khabarhub.

As many as 1,000 to 1,500 trucks are waiting their turn, and it will take a year for a truck to get its turn if China continues to obstruct the border, he adds.

Similarly, local hotelier and import-export businessman Cheten Gallpo Lama says, “Tourists have stopped coming, tourism activities are also minimal. China has been reluctant to open the border.

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