Hyatt Regency Kathmandu takes Rs 2 billion loan for post-unrest reconstruction

KATHMANDU: Taragaon Regency Hotels Limited, the operator of the five-star Hyatt Regency Kathmandu, has secured Rs 2 billion in bank loans to finance reconstruction after the luxury property suffered extensive damage during the Gen Z Movement in Nepal in September last year.

Executive Director Suresh Lal Shrestha said the company has borrowed funds from multiple banks to support rebuilding works, which are expected to cost nearly Rs 3 billion in total.

The hotel sustained major damage during the protests held on Bhadra 23 and 24, 2082 BS (September 8–9, 2025), when protesters allegedly vandalized and set fire to parts of the property, including the hotel lobby and several rooms.

According to Shrestha, all damaged structures have been demolished and reconstruction is now underway, with the company targeting a reopening by December 2026.

“We are working with a plan to complete reconstruction by December 2026. If everything moves smoothly without disruption, the hotel will reopen in December,” Shrestha said, adding that 300 to 400 workers are currently engaged in reconstruction at an accelerated pace.

The company said rapid rebuilding has become necessary as the hotel continues to incur daily losses while remaining completely shut, creating pressure to restore operations and revenue streams as quickly as possible.

Of the estimated Rs 3 billion reconstruction budget, around Rs 2 billion has been mobilized through bank financing, while the remaining amount is being funded through retained earnings.

“We are utilizing retained earnings for reconstruction, and the remaining requirement is being financed through bank loans,” Shrestha said. “Delays could significantly increase project costs, so work is progressing intensively. A project of this scale inevitably required financing.”

The executive director said the company had remained debt-free for nearly 12 to 13 years, having cleared all loans around 2013–2014, before being compelled to return to borrowing following the destruction caused by the protests.

“We had been a loan-free company for years. But after the September incident, reconstruction became unavoidable. Besides repairing damaged sections, several additional upgrades were also necessary,” he said.

Following reconstruction, the hotel’s room inventory is expected to rise from 280 to 291 rooms, while the company also plans to add 13 luxury villas, scheduled to come into operation from January 2028.

Shrestha said the property will retain its traditional architectural style externally, while undergoing a comprehensive modernization internally, including upgraded air-conditioning systems, electrical infrastructure, plumbing, piping, and interior design aligned with global branding standards.

Revenue Drops to Zero After Shutdown

Although the hotel has been completely shut down, the company reported Rs 171.9 million (Rs 17.19 crore) in revenue during the third quarter of the current fiscal year 2082/83. However, Shrestha clarified that the reported earnings were generated before the September unrest and remain reflected in the annual accounts.

“Since the hotel closed fully, revenue has effectively dropped to zero,” he said. “The income reflected in the financial statements was earned before the protests. Future balance sheets after Asar will show no revenue until operations resume.”

The company reported a net loss of Rs 144.8 million (Rs 14.48 crore) during the third quarter of the current fiscal year, compared to a net profit of Rs 337.5 million (Rs 33.75 crore) recorded during the same period last year.

Established on March 29, 1990, Taragaon Regency Hotels operates the Hyatt Regency Kathmandu in Boudha, serving both domestic and international visitors through premium hospitality, conference, dining, and accommodation services. The company is primarily promoted by the Saraf and Shrestha business groups.

Before the September unrest, the hotel’s annual operating revenue had reached Rs 1.522 billion (Rs 152.20 crore), up from Rs 1.495 billion (Rs 149.50 crore) a year earlier. In fiscal year 2025, the hotel reported an average room rate (ARR) of Rs 12,325, with an occupancy rate of 59.2 percent.