Demanding transparency, reform calls for Government intervention and local capacity building to grow louder
A group of hoteliers in Bhutan has raised serious concerns over the high Annual Maintenance Contract (AMC) fees charged by Otis Elevator Company, a global leader in elevator manufacturing and servicing. They claim the charges are disproportionately high, lack transparency, and are burdening local businesses without commensurate value.
According to one hotelier, Otis’s AMC fees are significantly steeper compared to other elevator service providers operating in the region. “We are facing several issues. The AMC charges from Otis are extremely high, and unlike other lift companies, they don’t even offer installment options. This lack of flexibility puts immense financial pressure on us,” he said.
The hoteliers further allege that during the initial purchase of the elevators, there was no prior disclosure regarding the long-term costs involved with AMCs. “There was no clarity on the recurring maintenance expenses when we bought the lifts. Now, we are trapped in a contract with rising annual charges that could eventually reach several millions,” the hotelier added.
Opaque practices and alleged tax evasion
Adding to the grievance, some business owners have expressed concern over what they describe as “unreasonable and non-negotiable” behavior by the Otis representatives in Bhutan. “Otis has collected approximately Nu 50 million through AMCs in Bhutan. There is no clarity on whether they are paying the appropriate taxes. We urge the government to investigate and ensure accountability,” the source added.
Call for local solutions
As a potential solution, the hoteliers are advocating for the training and employment of local Bhutanese technicians to reduce dependence on multinational service providers. “If we can train our own engineers and technicians, we can offer them competitive salaries and create jobs here in Bhutan. It will not only reduce costs but also boost technical self-sufficiency,” one hotelier remarked.
The group also called for regulatory oversight on AMC pricing structures and corporate practices. “There are currently no regulations governing the pricing of AMCs or Otis’s income declarations in Bhutan. The government should step in to protect the interests of Bhutanese businesses and consumers,” the hotelier stressed.
Questioning the AMC model
Fundamentally, some hoteliers argue that the AMC model itself needs re-evaluation. “We have already paid for the lift. Routine maintenance should be Otis’s responsibility. We are ready to pay for specific repairs as and when needed, but this blanket AMC charge feels like an unjustified burden,” they said, calling it an indirect method of charging extra without delivering added value.
Otis: A Global Player
Founded in 1852 by Elisha Otis, the inventor of the safety elevator Otis Elevator Company is one of the oldest and most established names in the vertical transportation industry. Following its separation from United Technologies in 2020, Otis became an independent entity, Otis Worldwide Corporation, with operations in more than 200 countries.
What’s next?
As concerns rise over foreign service providers’ practices in Bhutan, the matter is likely to draw the attention of regulatory bodies and policymakers. The hospitality sector, a key pillar of Bhutan’s economy, continues to call for greater transparency, fairer business practices, and capacity building at the local level.
Until then, hoteliers say they will continue voicing their grievances and hope for constructive solutions that balance business needs with fair market practices.
Meanwhile, despite repeated attempts, the Company (Otis) did not respond to any queries/clarifications sought by this paper.
Tashi Namgyal from Thimphu
