Background Note

This report forms part of a multi-round survey initiative undertaken by Policy Entrepreneurs Inc. (PEI) in collaboration with SOAS University of London, representing the third round of data collection. In this phase, the study focuses on one of Nepal’s most critical economic sectors—tourism—which also accounts for the largest concentration of small and medium enterprises (SMEs). Within tourism, the analysis narrows specifically to the hospitality subsector, recognizing its growing role as a bellwether for broader economic and tourism development in the country.

Drawing on primary survey data from 356 hotels across all seven provinces—where respondents were primarily owners and managers—the study examines hotel performance through a multidimensional framework of key performance indicators (KPIs), spanning financial, operational, learning, and environmental dimensions. The research employs a two-tiered analytical approach. First, it utilizes ANOVA tests to assess whether the prioritization and use of KPIs differ across respondent characteristics, including educational qualifications, hotel categories (star, tourist standard, and resorts), and provincial locations. Second, regression analysis is used to test the relationship between various performance drivers—learning attributes, entrepreneurial attributes, financial measures, and internal operational processes—and overall hotel performance.

Situated within the broader context of programs supported by the British Embassy in Nepal, this research contributes to an adaptive learning framework co-developed by SOAS and PEI. The framework aims to deepen engagement with SMEs and generate actionable insights that extend beyond conventional technical and financial support. By grounding the analysis in extensive primary data across sectors and provinces, the study addresses a critical gap in understanding how SMEs in Nepal are structured, what drives their competitiveness, and how targeted interventions can more effectively foster inclusive and broad-based economic growth across diverse social groups.