Hotels recover from Gen Z protests, but Hilton still under reconstruction

Achyut Puri Thursday, September 10, 2026

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Kathmandu, September 10

Around two dozen hotels across the country were set on fire or damaged during the Gen Z protests on September 9 and 10, 2025. According to the Hotel Association Nepal (HAN), the hotels suffered losses worth around Rs 25 billion.

As of the first anniversary of the protests, the hotel industry as a whole is gradually recovering. Physical damage is being repaired, with some hotels already back in operation and others in the final stages of reconstruction, according to HAN Treasurer Yubaraj Shrestha. “Many hotels have already been rebuilt, are being rebuilt, or are in the final stage of reconstruction,” he said. The then interim government made continuous efforts to boost the morale of businesses in the immediate aftermath of the Gen Z protests.

A new government was formed following the peaceful completion of the elections. This has also raised hopes among businesspeople, Shrestha said. The tourism industry continues to face new challenges. Despite this, businesses are continuing to invest in the hope of a brighter future.

Hilton was among the hotels targeted by protesters. The Hilton hotel is also undergoing reconstruction. A hotel source said reconstruction of the structure, which was completely gutted by fire, is nearly complete, with additional work under way. “The civil construction work has been completed. The earthquake-resistant dampers need to be completely replaced, and they have already been ordered. The glass panels for the exterior have also been ordered,” the source said.

However, the source claimed that reconstruction has been affected because the hotel has yet to receive its insurance claim payment. “The reconstruction work will be completed within the next one to one-and-a-half years. In addition, expansion work is also being carried out simultaneously,” the source said.

The then government had introduced measures to revive businesses affected by arson and vandalism, including loan restructuring, loans at lower interest rates and an advance payment of 50 per cent of insurance claims. The deadline for tax payments was also extended. It also introduced customs exemptions on the re-import of goods damaged by arson and vandalism.

Meanwhile, to boost business confidence, then interim Prime Minister Sushila Karki and Finance Minister Rameshwor Khanal visited business establishments, met businesspeople, helped expedite damage assessments and encouraged those affected.

According to HAN President Binayak Shah, such visits provided immediate encouragement, but significant challenges remain in restoring businesses in the long term.

How did the Gen Z protests affect the hotel industry?

According to HAN data, hotels in Kathmandu Valley as well as Pokhara, Butwal, Bhairahawa, Jhapa, Morang–Biratnagar, Dhangadhi, Mahottari and Dang–Tulsipur were among those most severely affected. Hotel establishments were vandalised, set on fire and looted. Hilton Kathmandu, owned by business group Shanker Group, was set on fire. More than 2,000 jobs were directly put at risk at hotels damaged during the protests.

Another five-star hotel in Kathmandu that suffered significant damage was Taragaon Regency Hotels (Hyatt Regency). The hotel has repeatedly been recognised as one of the tourism industry’s major contributors to income tax and foreign currency earnings in Nepal.

Barnabas Museum Hotel, a five-star hotel in Kathmandu in which businessman and former Nepali Congress lawmaker Rajendra Bajgain has invested, was also vandalised and set on fire. The protests left hotels with little choice but to keep their rooms vacant at the time.

September is normally the beginning of the peak season for hotel businesses. The protests were called on September 8 last year, leaving around 80 per cent of hotel rooms vacant. According to President Shah, the biggest blow dealt by the protests was to business confidence.

How far has reconstruction of the fire-damaged hotels progressed?

Reconstruction of the Barnabas Hotel is progressing rapidly, with the hotel expected to resume operations in the near future. According to the company, the hotel suffered losses of more than Rs 300 million in the fire.

Hyatt Regency Hotel is also undergoing rapid reconstruction. Its operators aim to complete reconstruction and resume operations by December this year. Crown Plaza Kathmandu, which was damaged during the protests, has already completed reconstruction and resumed operations.

Pokhara, Nepal’s tourism capital, also suffered significant damage during the protests. According to HAN, Hotel Adam in Pokhara has resumed operations. HAN data also shows that Bar Peepal Hotel and Hotel Landmark in Pokhara have resumed operations. HAN Treasurer Shrestha said Bagaincha Resort in Pokhara has also resumed operations. According to him, reconstruction of Hotel Sarowar in Pokhara is still under way.

Dream International and Dreamland Gold Resort in Butwal have resumed operations. According to HAN data, two major hotels in eastern Nepal—Hotel Kingsbury in Jhapa and Mechi Crown—have also resumed operations.

Cable cars suffered heavy damage, but businesses bounced back quickly

Protesters also damaged and set fire to cable car facilities at various locations across the country. Businesses managed to restore those facilities relatively quickly.

Maulakali Cable Car in Nawalparasi resumed operations last December. Protesters had vandalised its lower station. The company brought in a technical team from Austria and resumed operations after completing repairs.

Meanwhile, the protests at Chandragiri Cable Car disrupted both the cable car and resort services.

Chandragiri Cable Car had to remain closed for two months because of damage caused by the protests. Its bottom station was completely damaged on September 10, 2025. The cable car service was restored after the company brought in technicians from Austrian manufacturer Doppelmayr and completed the necessary repairs, safety tests and further inspections. According to company data, more than 2,000 tourists visit Chandragiri Cable Car every day.

New government fails to restore confidence, businesses remain uncertain

The hotel industry is not the only sector dissatisfied with the current government; the broader tourism sector is also unhappy. The powerful government formed after an election held on the strength of the Gen Z movement began its tenure by pursuing a policy of detaining investors, while failing to focus on reforming its underperforming agencies. Nepal Airlines is on the verge of collapse, and the government has yet to find a capable person to lead the corporation. The Nepal Tourism Board has also been left without leadership.

Although the government’s policies and programmes contain attractive slogans, corresponding programmes have not been reflected in the budget. Businesspeople say the current government, which could remain in power for five years, lacks a vision and master plan for where the tourism sector should be in the next five years.

HAN President Shah said, “The government appears to be making efforts, but its vision is not clear.” Nepal’s hotels currently have the capacity to accommodate more than four million tourists annually. However, only around 1.2 million tourists visit the country each year. According to Shah, even this figure has been achieved largely through the private sector’s efforts.

“There is a big difference between the governments of yesterday and today. If this government wants to, it can solve any problem and take the country forward. Therefore, there is no alternative but to get down to work in tourism with a clear vision,” Shah said. Nepal, meanwhile, remains highly vulnerable to natural disasters. Shah said it was unfortunate that a disaster occurring in one part of the country could affect businesses across the country and that the state must play a leading role in addressing this vulnerability.

Businesspeople are also concerned that the longstanding problem of poor coordination among state agencies persists. The Ministry of Tourism is calling for tourists to visit Nepal, while the Ministry of Industry is unable to provide cooking gas. Hotels have been told to transport the gas themselves.

With two ministries pursuing different priorities, there is still uncertainty, as in the past, over which industries and businesses the state intends to prioritise. Businesspeople are concerned about this trend.