The rebranding of the KGH reflects the transformation of the KGH Group during its 48-year history. The group that started with the guest house at Thamel has now become the country’s leading hotel chain owning a string of properties ranging from budget to mid-range. The KGH opened in 1967 with 13 rooms and quickly acquired fabled status on the Asia overland route. But the times, as they say, are changing, and the KGH has changed too. It now offers 133 rooms including 35 deluxe rooms. The hotel was renovated and expanded in 2011 when its deluxe wing was launched.

“Yes, we still offer rooms at $ 4,” says Rajan Sakya, CEO of the KGH Group of Hotels. “But we also have a different presence now — budget and boutique.” Indeed, the hotel sells its deluxe rooms for $ 150 in Thamel. “We are proud to say Thamel is not just a budget tourist hub anymore. Rates as high as $ 150 are selling at peak season, and it’s an encouraging development for Nepal’s room rates.”

Karna Sakya, the man who established Thamel as a tourist hub by shifting the action here from Jhochhen, opened the KGH after resigning from government service.

Many renowned writers, actors, musicians, researchers and artists including Ricky Martin and Jeremy Irons have stayed in this converted Rana mansion. The Beatles stayed here in 1968, and the hotel has dedicated one of the corridors to the Fab Four. Its half-century legacy makes it a contributor to the preservation of the Kathmandu valley’s cultural heritage. Traces of traditional Newar architecture are abundant in the guest house, and its rich history is evident within the walled premises.

EXPANSION SPREE

The mood is upbeat in the domestic hotel industry due to increasing tourist arrivals and a positive outlook, and many are on an expansion spree, adding to the existing inventory or constructing new properties in view of

the improved scenario of Nepal. The KGH Group is

no exception.

The group is rolling out aggressive expansion plans to build more properties. The group that runs a chain of environment friendly hotels and resorts in different parts of the country plans to launch two hotels — a heritage property Maya Manor Boutique Hotel in Kathmandu, and Himalayan Front Resort in Sarankot, Pokhara by 2016. Each property has a different identity. The group currently operates the Park Village Hotel & Resort in Kathmandu, Maruni Sanctuary Lodge in Chitwan, Buddha Maya Gardens Hotel in Lumbini, Water Front Resort in Pokhara and Vision Mountain Inn in Nagarkot.

In the next two years, KGH Hotels will have a total of 550 rooms to address a shortage in the middle-end market and cope with a tourist boom. When asked about the philosophy that guides the company, Rajan said, “Its value for money. Our objective is whatever value the customers have paid for our service, we should be able to satisfy them,” he added. The KGH Group’s expansion drive started in 2001. US-graduate Rajan started looking after the family business in 1996 and became the CEO in 2004. The group is now being handled by the new generation — Rajan and his brother Sunil. But Rajan does not want to say that the new generation has taken over as his father, at the age of 72, is still very much involved in the business. “He is still the visionary that provides the driving force,” he said. Soon, more members of the family will be joining the business as they come of age, said Rajan. “Tourism is what we are good at, and want to take it ahead together.”

Banking on Chinese segment

The KGH, which will soon be celebrating its golden jubilee, was popular among travellers from all over the world — particularly European travellers. But now Thamel has different stories to tell. It’s Chinese tourists, the newest clients in the domestic tourism sector.

“Chinese tourists are at every corner, every restaurant and every handicraft store in Thamel now,” said Rajan. The Chinese who come here are from big cities, and they are astonished to see everything here. The European segment has obviously remained stagnant due to the economic recession in the West. But Chinese rise has driven Nepal’s tourism boom, and the market will grow tremendously in the years ahead.

Rajan said that a drop in Indian tourists had also been a big concern. In the past, Indians used to visit Nepal for shopping, but now Nepal has nothing to offer except Pashupatinath. “Even the casinos, the major allure for Indians, have closed forcing them to turn to Singapore and other destinations.”

As the country will be seeing new deluxe and luxury hotels in the next few years to cater to the swelling arrivals which have reached nearly a million, an appropriate policy from the government will mean fundamental changes for the growth of Nepal’s tourism. For example, the government has offered 100 percent income tax exemption for 10 years to investors constructing luxury resorts on the shores of Rara and other major lakes. “But how to get there is more crucial as it takes seven days to travel to Rara. In that time, we can travel around the world,” Rajan said.