Hyatt to build $37 million five-star hotel in Kathmandu

Hyatt to build $37 million five-star hotel in Kathmandu

By Gopal Sharma

KATHMANDU (Reuter): Hyatt Corp. plans to set up a US$37.4 million five-star hotel on the outskirts of Kathmandu to attract affluent western tourists to the Himalayan kingdom, the hotel's co-promoters said on Thursday.

The Taragaon Regency Hotel, expected to be completed within two years, will be a joint venture between the Nepal government, foreign banks and Chicago-based Hyatt Corp., an official of Nepal's Taragaon Development Board said.

"Government participation has been kept to a minimum," the board's accounts officer Shiv Sharan Thapa told Reuters.

Nepali Prime Minister Sher Bahadur Deuba on Wednesday laid the foundation stone of the 300-bed hotel. The government had agreed to contribute land and finance construction work worth $3 million.

Thapa said the Manila-based Asian Development Bank would invest $9.25 million.

Hyatt has agreed to manage the hotel and is negotiating for an equity stake.

The Korean Development Bank International would give the Hyatt group a $3 million loan to finance the hotel, while Nepali financial institutions and the public could subscribe to the rest, he said.

Government officials said the hotel was designed to attract revenue from tourism by catering to affluent western tourists to Nepal, home to the world's highest peak, Mount Everest.

Prime Minister Deuba said his center-right coalition government, which toppled the previous communist government in September, aimed to foster private sector participation to boost economic growth.

Tourism, Nepal's major source of foreign exchange, provides jobs for hundreds of thousands of the kingdom's people. Nepal is one of the world's 10 poorest countries.

Nepal earned more than $145 million from tourism in 1994. Officials say some 171,000 tourists visited the kingdom in the first seven months of 1995.