This study examines how sustainable tourism in Nepal simultaneously supports economic growth and employment and while creating paradoxical pressures in fragile mountain economies. Drawing on tourism-led growth, tourism area lifecycle (TALC), seasonality and resilience perspectives, it uses time-series data to test whether higher tourist arrivals, longer stays and more bed capacity foster sustainable development or instead deepen inequality and ecological and seasonal stress.
Using annual time-series data (2000–2023), the analysis employs ARDL, ECM, OLS, Granger-causality and diagnostics check, complemented by review of the tourism policy-framework.
Tourism is a significant driver of economic growth, with a 1% increase in arrivals of tourist leading to a 1.54% increase in receipts. Similarly, a longer average visitor stay is linked with growth in hotel bed-capacity, consistent with TALC model. However, it reveals a critical employment paradox: extended tourist stays decrease seasonal mountaineering employment by 0.34%. Similarly, Granger-causality verifies that there is a one-way causal effect from stay duration to mountaineering activity.
Nepal should focus on higher-value tourism, not only on more arrivals. At the same time, it should protect seasonal mountain jobs and manage ecological pressure with strong local monitoring and safety standards.
This research is derived from the novel incorporation of underutilized variables such as stay duration, bed capacity, seasonal employment data which link with tourism-led growth hypothesis (TLGH), TALC and resilience theory to coherent this paradox. Similarly, this study also provides actionable insights for policymakers aiming to enhance sustainable tourism development.
