How to support the local economy in Nepal as a tourist

by Dave from The Longest Way Home ~ August 16th, 2018. Published in: Travel blog » Nepal.
a local carpenter from Bungamati

Kinjal Bajracharya, a local carpenter from Bungamati – today he says business is bad because of cheap imports from China and rising rents – buying directly from him means the local economy is directly supported

How you can really help local people in Nepal

Many people ask me how they can “help Nepal” either before they go on holiday or when they are there. The local economy is generally where people feel they can help the most. Tourists often feel that they prefer their hard earned money to go directly to a local person rather than someone who is already quite well off.

Make no mistake: Hiring local people and buying their products directly helps them.

However, in recent years international and wealthy Nepali tour companies have moved into the “local economy” aspect of tourism to cash in on the “local” term. It’s rather shameless. Such is the world today.

How to make sure your hard earned money goes to the right people in Nepal? Let’s take a look at how you can avoid the cons and find out how you as a tourist can actually make a positive impact on real local peoples lives before and during your visit to Nepal.

Book with a local trekking company

Not all international trekking companies are bad! But they are more expensive. There are, unfortunately, some not so good ones too. Local trekking companies can provide an excellent service and often over-deliver in terms of the human aspect. Something so many of us seek when we travel.

Many of these local companies slip by unnoticed. They simply don’t have the budget to advertise like the “big international” ones.

Big international tour company websites and booking online are good if you are stuck for time and want everything done ahead for you without really having to think about anything. That said, a local company can provide an equally good service if you give them a chance.

This “chance” is where you come in. Time is money. Donate your own time to some solid research to help local Nepali people by hiring them rather than an international tour company.

A local guide on the way to Everest

Hiring a local guide means they can directly support their families and business

Local guides generally have a smaller online presence if any at all. They probably won’t be able to offer credit card bookings online either. It’s the start of your trust-to-trust with a local guide when making a booking.

It’s the first step in touching base with another human on the other side of the planet who just like you is trying to make a living. It’s one of the great experiences of visiting Nepal. It’s a like stepping back in time when values were more important than a generic booking form.

If you want to book with a big company then take a look at these trekking and tour companies in Nepal.

If you want to hire a local trekking guide then read about how to hire a local guide in Nepal.

There are many local trekking guides featured in my Nepal guidebook.

Book your domestic plane and bus tickets in country

This one really annoys some repeat visitors to Nepal. But the fact remains that booking a bus or plane ticket via a local travel agent is easier than online. The companies offering online plane and bus bookings online usually process the credit card and paypal fees outside of Nepal due to banking regulations within the country.

Moreover, if a domestic flight gets canceled due to weather issues (common) a local travel agent can do all the ground work for you to reschedule or get your cash back while you actually make alternative plans for your day instead of trying to go online to book or queue for hours at the airport.

Copper and brass shops in Kathmandu

Copper and brass shops in Kathmandu – there’s no credit card machine here for good reason!

In five or so years Nepal’s online booking systems will surely have improved and the banking systems may also allow local companies to function a bit better. But for now, do your booking with a local agent. Simply use a guidebook to find a recommend one.

Here’s an example. Last year Nepal Airlines finally opened up online ticket buying. It works, mostly. However if you need to cancel or rebook there’s a charge. However, if you book directly in person, there are no charges. Yes, Nepal still works that way for now.

The exception to pre-booking a ticket is perhaps a bus ticket. If you are backpacking you can pick one up for Pokhara and Chitwan on the morning you take a tourist bus. But to secure a ticket, pay the extra 100 rupees and have a local company book your seat a day or so beforehand.

Keep in mind bus tickets in Nepal rarely sell out.

Find out transport and getting around Nepal.

Stay in Nepali owned hotels

There are many international chain hotels starting to open up in Nepal. If that’s what you prefer, then go for it. The international branded hotels hire local staff and in a way it helps the economy.

All the same, some portion of your money is leaving Nepal to the hotel chain. If you want to support Nepali businesses then stay in a Nepali owned hotel.

Nepali owned hotel

Stay in a Nepali owned hotel means helping the owner, staff and the real local community

Many Nepali hotels offer the same standard as the international branded hotels. Some are even nicer (I’m thinking of the Newari boutique hotels) and offer a wonderful local service.

Do check out my list of accommodation in Kathmandu.

Pay cash for your hotel room rather than booking online

Booking a hotel online is the norm these days. Doing so for Nepal is no different. However it is important to note that companies like booking.com and Agoda take a hefty commission from 12% up to 23% from the local hotel. Ouch!

Here’s my advice. If you’ve never been to Nepal before, book a hotel in Nepal online for your first one or two nights stay. After that, pay them in cash. It’s not like other countries. You can literally pick up the phone and book a hotel in Nepal, no deposits or anything needed.

The money will go directly to the hotel and you may be able to negotiate a better rate too!

Do check out my hotel search for Nepal.

Be wary of “community homestays” and “homestays” in Nepal

These tourism buzzwords have had a terrible impact on genuine local people. It’s a sad case we touched on earlier. Big tour companies capturing the buzz words and repackaging them into products.

Homestays in Nepal always existed. They were simply known has “family run guesthouses”  or tea houses – not so catchy but very genuine. Tour companies then came along and created “community homestays” with yet more buzz words to do with supporting the local economy etc. Sad but true. Bloggers have also been paid and offered free stays to promote them. Moreover, these communities now have paid organizations with managers and directors plus of course tax.

Potters thrashing straw for the kilns

Local Potters in Bhaktapur have to handle many jobs these days just to survive as big business takes over – these potters are thrashing straw for kilns

If you really want to experience a few nights in a local house then look to the places that aren’t being promoted. Quite simply, locally run family guesthouses.

In my reviews of accommodation in Nepal I’ve had local families and local hotels tell me terrible stories of how they are being forced out of business or told to rebrand to “homestay” due to pressure from these big promotions. Meanwhile these “homestays” play the “you are helping communities” card to get a sympathetic ear. It’s all rather sad.

Want to stay local? Stay in family run guesthouse or quite simply a locally run hotel – most are family owned. Most good guidebooks will list them. Likewise even online booking sites will have them written into the description. Truth be told, the real family run guesthouses will be a lot cheaper than the ” community homestays” too.

Again, simply book online before arriving and try to find a family run guesthouse by doing a hotel search for Nepal. Then when you arrive it’s as simple as walking down the road and you’ll see a genuine guesthouse – it’ll be the one without all the fancy signage.

Don’t volunteer unless you are qualified

Volunteer scams in Nepal were uncovered years ago. From orphanage tourism to well funded NGOs and tour companies profiting on your donations for “good causes”. The list is endless.

If you really want to volunteer, then read the article below. Stick with the international organizations listed there rather than that “awesome place doing great work” a friend of a friend worked at last year.

A local jewelery maker shows his handmade designs

A local jewelery maker shows his handmade designs

There’s very little a volunteer can do other than have a “personal feel-good” moment in a week or a month compared to volunteering for a year or two in Nepal by making sustainable development a reality.

Keep in mind. Technically, if you volunteer on a tourist visa it is not legal as it is defined as work. Unpaid or paid it is not covered on a tourist visa. The big international organizations arrange business visas – there’s a reason for that.

Many international and local organizations profit on the “personal feel-good” side to volunteering and simply ask for money for you to work there. Sustainable development is not a factor.

Want to help by volunteering? There are plenty of skilled Nepali who can teach or build houses. What’s needed is sustainability. Try volunteering for 1-2 years though one of the organizations listed in the article below.

The volunteering aspect is cover here – volunteering in Nepal.

Pay for everything in cash

Nepal is still very much a cash economy. Credit card payments are possible in many hotels, restaurants and some shops. However, many local places don’t have credit card machines. So, trust me that cash will come in handy.

A local silversmith in Kathmandu

A local silversmith in Kathmandu – paying in cash means the big credit card companies don’t get that extra 3% for all his hardwork

Paying by credit card also means that you may be charged a commission on the transaction that goes straight to the bank and not the local business.

Nepal is a very safe country and carrying large wads of cash is still normal. Banks charge businesses for credit card machines so you may also get a discount by paying in cash!

Read more about restaurants in Kathmandu.

Where to buy souvenirs in Nepal.

Shop in local Nepali shops, stay in Nepali hotels and eat in Nepali restaurants

Since 2015 there has been an influx of Chinese run shops, restaurants and hotels in Nepal. It goes without saying, if you want to help the local economy then keep the money in the country.

For many years Nepali businesses complained about Indian business charging them too much. Now, the flip opposite has happened and wealthy Chinese business have opened up throughout Nepal.

The result? Chinese businesses are financing their own businesses to take over prime Nepali retail property that local businesses can no longer afford to rent.

Want to help a local? Make sure the shop, restaurant or hotel is Nepali owned.

Do read about the changes in Thamel.

Buy locally made products

Again, much like the above. Avoid purchasing products made overseas when you visit Nepal. Many “boutique” souvenir stores have opened up in Thamel and Pokhara selling cheap Chinese products. None of this helps the local economy.

There are still plenty of local Nepali souvenirs that are still made in Nepal. By buying Nepali souvenirs your money goes directly to the local economy.

a local Nepali tea shop

Buying tea from a local Nepali tea shop is far better than from a supermarket!

Made in Nepal souvenirs include locally made Nepali clothing, wood carving, thangkas, artwork, stone sculptures,  paintings, metal work, jewelery, pottery, tea, coffee and spices.

Yes, many of the above may have parts imported. Gemstones for example. But if you ensure the craftwork is done locally then you are supporting local artisans. Many of these handicrafts are made in the Kathmandu Valley or the Terai region. So asides from helping the shop, you are also helping to keep people employed across the country.

Read more about where to buy souvenirs in Nepal.

Take a local heritage walk in Kathmandu and meet the locals!

It’s not all about the money! Tour companies constantly rush tourists around heritage sites (overcharging them too) so you never really get to interact with locals.

Worse yet – due to large tour groups being led around Kathmandu many locals are tired at the constant groups blocking their way, staring at their shops, or taking photos of them as if they were on show.

A local man from Thimi

A local man from Thimi beside a shrine – there’s no tour that will take you here but with a heritage walk you’d be amazed to see how happy he was to meet people visiting this area!

By taking your own heritage walk you can get out onto the streets and actually meet the locals who live and work in Kathmandu. Moreover, you can eat, drink and get snacks in local shops along the way.

It seems ironic that by avoiding a walking tour you can help the local economy. But, many of these package tours are not special. These companies tend to lead people around the same sites, tell them who to buy from and little more.

The result is that local people see the large walking tour groups and grow a disdain to them. As an independently tourist you are touching base with independent Nepali people too. You’ll eat where you want, buy from whoever you want and can have a talk with a local person about their lives.

The importance of giving a paid tour a skip is that you get to show locals that you are human too and not just another package tourist!

Read more about taking a heritage walk in Kathmandu.

Support independent products & businesses

It’s not just about buying “Nepali” either. There are many wealthy Nepali business, hotels chains, restaurants and trekking companies in Nepal. You may prefer to support an independent business or family run business rather than a big Nepali businesses.

Nepali coffee producers

Nepali coffee producers have to battle both international coffee chains and wealthy national coffee chains – its a simple thing to – have a coffee in a local coffee shop to support them!

It’s a bit like buying a coffee in a big coffee chain back home versus buying a coffee at a locally run independent coffee shop! By supporting small businesses rather than the big chains you are supporting the local economy. The same thing is true in Nepal.

Much like in your own country there is a very large rich / poor divide in Nepal too.

In all my guidebooks I’ve made it a point to highlight both Nepali and local Nepali businesses. Yes, for those who like or want consistency – restaurant and hotel chains are in their too. But, there is something very nice about supporting a local business that enables them to flourish in among the big corporate style businesses!

Check out my guidebook to discover great local places in Nepal.

You can help the local economy in Nepal by simply supporting local businesses and people

The above should hopefully give you an idea on how and where to support the local economy in Nepal. By doing so your money goes directly into the everyday people of Nepals pockets.

Be it a coffee, a nights stay, a local trekking guide or piece of pottery. When you support local people in Nepal the locals benefit and there’s a great feel-good factor for you too!


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28 Great responses to How to support the local economy in Nepal as a tourist

  1. Tanya says:

    Great information round up. I stayed at family run guesthouse near Thamel. It was so nice to see them every morning. I did try to volunteer but there was nothing that couldn’t be done by locals so I gave it a skip and did a course in yoga and meditation!

  2. Allan Hart says:

    I read your tea post. I presume this is locally made tea and it will help local people?

  3. Mike Stream says:

    Much of this can be applied to all countries. It is getting harder to tell the difference between a locally made product and a Chinese one though.

    I like the idea of paying a hotel in cash. Never thought of that before.

  4. Lucy Medema says:

    How is it best to tell the difference between an international trekking agency and a local one on line?

    • Generally speaking, an international one will look highly professional. Possibly even offering multilingual options or have plenty of “book now” buttons. Lot’s of “packages” etc. A local trekking website is probably going to be more basic as that’s what they can afford. Some local agencies may indeed look good. It’s similar to looking at a large ecommerce site vs a local small business.

  5. Guatam says:

    in Nepal, everyone is poor!

  6. Mary Guzman says:

    Excellent points. I’ve been trying to get people to do the same elsewhere too. Support local economy and let the big businesses do their own thing.

    • Big businesses have a tendency to dominate and squeeze small businesses out. Some don’t, other do. When big business moves into the small business area they tend to dominate until people learn this and support local businesses again. Much like corner store disappearing to large supermarket chains before people support corner store again.

  7. Jose Janson says:

    Just the sort of unbiased information I was looking for. I never factored in the hotel commission rates from booking companies. Grown used to just booking online.

  8. Karla says:

    Hi David,

    Really good points that hit home a lot. Some of these things we don’t think about every day. I’ve an app and can book a hotel through it in a few clicks. I should really just get up and call a hotel every now and then like back in the day!

  9. Roberta H Jones says:

    Do we need to ask a trekking agency for their license number to know? Is it the same as Everest summits? We choose a western guide or Nepali?

    • There is a difference between Everest Summits and Everest Treks. One goes to the top, the other to the base camp. Western guides are still taking people to the top along with Nepali companies while trekking to Base Camp is pretty much exclusive to Nepali guides these days. Yes, all guides should have a license number.

  10. Edward Gibson says:

    How do you tell the difference between a locally owned hotel and a hotel owned by a Canadian? Is there a certificate or what?

  11. Maryla Nowakowska says:

    I think we can do more good by following this list than anything lease in Nepal. But local. We are in Nepal, no need to eat Chinese or Italian. We will eat Nepali food!

  12. Amy Muller says:

    Thanks Dave. There are things on here I just never thought about before. Some of these can be applied to our own countries!!

  13. Juan Ovalle says:

    Great points! All travelers need to be socially conscious especially in countries like Nepal

  14. Hi. Yes, we understand that written words are more powerful than what is just said. We started this project as one of our CSRs. But now we have planned to make it into a social enterprise. There are various reasons to this. first, we envision that backward communities should get opportunity to uplift their lifestyles. and to make progress we must have some economic value to it. Second, a community cannot progress if they aren’t financially sound. Therefore, we have institutionalized this practice and have been providing skill based training to the community home owners. this in turn will add more value to the existing practice and will enable them to innovate.

    It goes without saying that since Homestays is one of the popular search keyword in the tourism sector these days. Many hotels and lodges have themselves in this categories in various websites. But we have certain criteria to be listed as The Community Homestay Network like there should be 80% women, there should be …. These have positive impact on the lifestyles of the people. They have been generating equivalent or more than what their male partners have been earning. We have made this into packages because it is the need of the market and without business buing generated, we cannot expect any wellness.

    Yes in Nepal, there is and in practice there used be ‘PATI’- a local shade for travelers. Also almost any house let you stay for a night or so if you were travelling. It was called ‘Bas Basne’. That’s why homestay came into practice because the travel companies saw the prospect of economic growth by letting travelers experience the stay and culture offered by the local houses in local communities. Family run guest houses do not have a long history in Nepal.

    How can a hotel run out of business if your are trying to sell yet another hotel in the name of homestays. It is a malpractice if you rebrand your hotel as homestay. It is not a homestay but a hotel but with the label of homestays.

    • Hello,

      I think your comment is indicative of the problem in Nepal regarding the business of community homestays in Nepal and a great example for other people to read and why it is a problem.

      Your comment quote: “backward communities should get opportunity to uplift their lifestyles”

      Calling anyone, let alone your own people, “backward” is horrendous: This should be enough for people to know about the mentality and length companies are going to sell this “idea.”

      From the tone and writing of your comment it’s plain to see the “business” mentality behind it which is far fetched from the actual experience a tourist would like to have when staying with a local family. At least you have come clean and admitted it.

      Preserving ethnic groups, buildings and their lifestyles while bringing in modern health care and education thereby empowering self sustainability is well-known and an acknowledged way to help improve peoples lives without forcing them to change into a modern business. Simply setting up a business that tells people what to do, how to do it and when to do simply destroys the uniqueness and independence of a community. Nepal deserves a lot better than to be “just another generic destination”.

      From a historical perspective do note that Pati was a temporary open rest-place for traders and a columned ground floor building not a house. While a Sattal (larger and housed outside/inside) was preferred for several overnight stays. You can read more about historic buildings in Nepal here. Traders, not tourists, would have open fires and cook for themselves. A family run guesthouse in Nepal does indeed have a long history in Nepal. When Nepal opened it’s door to tourists in the 1950s. When it comes to tourists dating back to the 1950s/60s smaller trekking tea houses took in trekkers. Kathmandu Guesthouse was one of the first recognized establishments within Thamel to offer family accommodation and it was indeed run by the Shakya family and still is, though it’s now recognized as a premier Nepali owned hotel.

      Finally to your point about hotels being run out of business. Take a look at the 3 fold rents in Thamel, Lakeside and other popular areas in the past 2 years which is happening due to wealthy companies who split their business up into various sectors and “business names” who simply out pay local rents to claim valuable real estate. Happens all over the world, still doesn’t make it right. At least in many countries “better business” practices help prevent this monopoly from occurring.

      How is it even possibly that a local hotel is charging $10-15 USD while a “community homestay” is charging $30-40″? Considering how much the family is actually is getting an aweful lot of that money seems to be going to advertising another company, public relations and “administration charges”. Swap that for for a real family run guesthouse and it’s $5-8 which goes directly into the family hands – if people want to have the family show them around, or pay for meals there those options are open. In the past families would simply share Dal Bhat (meals) with a tourist at no charge and would be happy to show them around at no charge. That’s the real Nepal. Hospitality at it’s finest. Tourists would often give back or leave them something extra in such cases. In terms of improving education, health sector etc can and should be a separate self-sustaining factor and not a business.

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