CHAPTER 5
TOURISM BUSINESS RESPONSE
TO MULTIPLE NATURAL AND
HUMAN-INDUCED STRESSORS
IN NEPAL
Marjorie van Strien
ABSTRACT
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 chal-
lenged 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 rep-
resentatives. 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 manag-
ers 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 com-
panies have shifted their entire business strategy.
Keywords: Tourism industry resilience; adaptation; disruptive events;
adaptive capacities; transformation
The Tourism-Disaster-Conflict Nexus
Community, Environment and Disaster Risk Management, Volume 19, 87–104
Copyright © 2019 by Emerald Publishing Limited
All rights of reproduction in any form reserved
ISSN: 2040-7262/doi:10.1108/S2040-726220180000019005
87
,88 MARJORIE VAN STRIEN
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 stress-
ors such as fires, floods, landslides, earthquakes and climate change. Despite its
complex and dynamic context, Nepal has achieved a gradual growth of its tour-
ism 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 com-
plex 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 dis-
ruptive events have provoked ample research on post-disaster and post-crisis
response and recovery. While the tourism industry is considered vulnerable to dis-
ruptive 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 ana-
lysed 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 knowl-
edge 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
, Tourism Business Response 89
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 dis-
ruptive 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 busi-
ness 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. socie-
ties, 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 individ-
ual 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 compa-
nies, 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
TOURISM BUSINESS RESPONSE
TO MULTIPLE NATURAL AND
HUMAN-INDUCED STRESSORS
IN NEPAL
Marjorie van Strien
ABSTRACT
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 chal-
lenged 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 rep-
resentatives. 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 manag-
ers 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 com-
panies have shifted their entire business strategy.
Keywords: Tourism industry resilience; adaptation; disruptive events;
adaptive capacities; transformation
The Tourism-Disaster-Conflict Nexus
Community, Environment and Disaster Risk Management, Volume 19, 87–104
Copyright © 2019 by Emerald Publishing Limited
All rights of reproduction in any form reserved
ISSN: 2040-7262/doi:10.1108/S2040-726220180000019005
87
,88 MARJORIE VAN STRIEN
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 stress-
ors such as fires, floods, landslides, earthquakes and climate change. Despite its
complex and dynamic context, Nepal has achieved a gradual growth of its tour-
ism 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 com-
plex 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 dis-
ruptive events have provoked ample research on post-disaster and post-crisis
response and recovery. While the tourism industry is considered vulnerable to dis-
ruptive 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 ana-
lysed 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 knowl-
edge 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
, Tourism Business Response 89
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 dis-
ruptive 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 busi-
ness 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. socie-
ties, 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 individ-
ual 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 compa-
nies, 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
