ASSESSING THE IMPACT OF TOURISM ON ECONOMIC DEVELOPMENT IN FAR WESTERN PROVINCE OF NEPAL

Abstract

Tourism has increasingly been put forward as a developmental opportunity to the peripheral and economically marginal areas of the developing countries. In Nepal, despite the significant contribution of tourism to the national income and employment, the distribution of these results is uneven across the country, being especially in remote provinces, like the Far Western Province. This paper is based on an empirical investigation of the role of tourism in economic development of Far Western Nepal that uses primary survey data of 385 tourism stakeholders and hotel owners in nine districts. The study is based on the tourism-led growth hypothesis and the theory of regional development, which justifies the adoption of the comprehensive quantitative framework consisting of the descriptive statistics, reliability test, mean score analysis, the one-sample t-tests, estimation of the effect size, correlation analysis, and analysis of the comparison of the districts. Findings indicate that there is a strong agreement on the role of tourism in economic development of the region, growth of local business, entrepreneurship and foreign-exchange earning with statistically significant and substantively large impacts. However, the study finds spatial differences in tourism benefits between Terai and hill districts highlighting the contribution of infrastructure, accessibility, and market integration. The paper concludes that tourism is a critical contributor to the economy of Far Western Nepal, but its effectiveness should be based on region-specific, inclusive, and policy-supported interventions.