Bhutan must maintain policy  decorum

Amidst inconsistencies, hospitality industry calls for resilient and unswerving policies which can be religiously valued and followed for all times to come

The reduction in the Sustainable Development Fee (SDF) of USD 200 to USD 100 per person per day has raised quite a degree of skepticism both inside the country and abroad in recent months. While it has come as a boon for some, others question the uncertainty and inconsistency of the policies with the government halving it to USD 100 per day, which, people in the hospitality sector fears could tarnish the image of the tourism sector in the long run.

Most tour operators pointed out that there needs much coherence within each tourism related policies so that the outcome would benefit everyone, including the guests.

“Changing some policies now and then upto our whims on one hand while completely neglecting the deeper and cognizant issues facing the industry on the other would only confuse everybody,” said Sonam Wangchhuk, a tour operator in Thimphu. “This in turn will never benefit anyone, neither in the short term nor in the long run. “What we need are lasting solutions which will showcase Bhutan as an unswerving and a perfect tourist destination for all,” he added.

A tourist lodge entrepreneur said that it does not matter what the fees are, so long as the guests coming into Bhutan savor the infrastructure, enjoys the food and takes delight and pleasure in their travels across the country.

“At the end of the day, they all come to relish and experience Bhutan, to take back great memories, and not to gauge how much dollars they have spent on their trip,” she said. “I think the fees should not be much of a problem so long there are abundance of standard infrastructures and soothing policies in place.”

The United Nations World Tourism Organization’s (UNWTO) barometer in 2023 states that world tourism will take a dip until next year or even later. It was reported that in response to the challenging economic environment, tourists are expected to increasingly seek value for money and also travel closer to home this year.

“This clearly signals out that we are in for a stiffer competition looking at the global situation and perception of our guests,” a tour guide from a renowned travel agent in Thimphu, Kinga Selden said. “Every single stakeholder must give in their best shot during this period and we will see what happens later”.

She said that the impetus must be geared on all things tourism and not just fees and levies.  “Sound national policies and nourishing environment, infrastructures, coupled with competent human resources and a vibrant marketing strategy will only raise the bar so long all the concerned stakeholders work hand in hand,” she added.

Another tour operator said that in order for Bhutan to keep the “Brand Bhutan” image intact, the hospitality sector should be resilient in nature and very pragmatic in the discourse of it responsibilities.

He said that whatever policies and guidelines are set, it should be structured in such a way so that it could set precedence and religiously valued and favored for all times.

“Should we swerve in any of the components, we will be doomed to despair being a small country with a small population and therefore a small economy,” he said.

Another tour operator said that the government is talking about just direct SDF. He said that there are more benefits than just the direct SDF in the form of employment, tourism related enterprises and economical advantages.

“If the industry benefits from all these and not just SDF, the government benefits too because of taxes,” he said, adding that the SDF discount sometimes seemed like the government is trying to cope up to keep the tourist arrivals at par with the pre-pandemic era.

While some parliamentarians even voiced out the same grievances regarding the uncertainty issue in the ongoing parliament session, the Industry, Commerce and Energy minister, Karma Dorji said this week that the provisional 50 percent reduction in SDF levy “promotes vibrant opportunities” for tourism and related sectors and that the current SDF discount is for a “specific period”.

Lyonpo Karma Dorji also informed that nearly 10,000 tourists visited the country after the government reduced the SDF by 50 percent per day per person in August. Industry and Commerce Minister Karma Dorji updated the ongoing parliament session that the tourist arrivals increased by 30 percent compared to what was projected.

The Industry and Commerce Minister further reiterated that the incentives were given on the request made by the tourism sector and that tourist arrivals have also soared for trekking purposes.

He said that the government should inform the public two years in advance if any changes are to be made in the tourism policy in the future so as to avoid any problems.

Although the SDF of USD 200 will remain constant as no one has the authority to increase it, according to the Minister, a certain clause in the Tourism Levy Act provides authority to the Department of Tourism (DoT) to look at discounts and promotions.

Section 9 of the Act provides that the competent authority (DoT in this case) can exempt or grant concessions on the applicable SDF but within the conditions prescribed in the rules.

From June 1, 2023, three SDF incentives were introduced to attract tourists for longer duration as follows: 1. 4+4 (USD 800) Pay for four nights and get the remaining 4 nights for free; 7+7 (USD1,400) Pay for 7 nights and get the other 7 nights for free and 12+18 (USD 2,400) Pay for 12 nights and get the remaining 18 nights for free.

Then, in August 2023, the Royal Government of Bhutan announced additional incentives and policy measures to boost its tourism sector, introducing a 50% reduction on its tourism levy, or the daily Sustainable Development Fee (SDF). The government has said that Bhutan’s commitment to high value, low volume tourism is underscored by its SDF, which is now USD 100 per person per night (down from USD 200 per person per night). The new and lower levy will be in effect until September 2027. In addition, a fifty per cent (50%) reduction on the SDF shall be granted on the rates applied to children aged between 6 and 12 years for US Dollar-paying children visiting as tourists. The effective SDF with the discount for children will be USD 50 per person per night. Children who have not yet turned six years old are eligible to visit Bhutan without paying any SDF.

Tashi Namgyal from Thimphu