Bhutanese tour operators skeptical about new SDF

The Tourism Levy Bill of Bhutan 2022 was introduced in the National Assembly on June 20

The Bhutanese tour operators are skeptical on the reform of the tourism sector by the government, especially on increasing the Sustainable Development Fee (SDF) from USD 65 to USD 200 per night per tourist visiting the country.

Many tour operators are of the view that the move will discourage tourists from visiting the country and will decrease employment opportunities, while some admitted that it is a positive development.

Meanwhile, Finance Minister Namgay Tshering, who is the Member In-Charge of the Bill, introduced the Tourism Levy Bill of Bhutan 2022 in the National Assembly on June 20.

The Minister submitted the Tourism Levy Bill of Bhutan 2022 as a transformation initiative with the changing times and circumstances for the future betterment of a country like Bhutan, which is tourism-dependent.

According to the Minister, one of the major amendments in the new Bill is the revision of the SDF from USD 65 to USD 200 per night per tourist, which was instituted almost 30 years ago in 1991.

However, with the Tourism Levy Bill of Bhutan 2022, the Minimum Daily Package Rate (MDPR), which includes the SDF of USD 65 would be removed. 

A tour operator and hotelier based in Gelephu, Ajay Dorji Drukpa said that raising the SDF discourages the development of the private sector.

He said, “The rise of the SDF will discourage tourists from visiting Bhutan and it would lead to the closure of the private tourism industry and minimize hotels.”

Choden from Paro shared that the Tourism Levy Bill would further suppress the small and new tour operators.

“The government is not supporting the growth of the private sector,” she added.

An owner of another tour company in Thimphu said the introduction of the Tourism Levy Bill of Bhutan is the government’s decision and that the public has no say on the issue.

He said, “It would have been extensive if the government had consulted the private tour operators.”

However, he added, “With this move, there will be qualitative tourists. Regional tourists do not use hotels, or Bhutanese tour guides and they come through tour operators outside Bhutan.”

While tour operators agree that there should be a change in the tourism policy, an owner of a travel company in Thimphu said little time should be given to them for preparation.

“The country now does not have the infrastructure to raise the SDF. Satisfactory services and facilities should be given for the amount a tourist pays.”

Another operator feels that the contribution of tour operators to the government in different forms of taxes went unrecognized. “Many people from the tourism sector will lose their jobs,” he lamented.

Another tour operator in Thimphu said that many tour guides and drivers will lose their job now that the Bill is passed.

“The positive impact would be that it would benefit the government to make high revenue. There will not be undercutting and it will help make Bhutan an exclusive tourist destination,” he added.

Talking about the reforms and the logic of proposing the SDF raise to USD 200 on BBS TV, Prime Minister Dr Lotay Tshering said the plan is to invest in the sector and make Bhutan a high-end tourist destination.

The PM also divulged that the government with the Tourism Council of Bhutan (TCB) will focus on promoting Bhutan as a tourist destination globally. 

Lyonchhen added that investment is to improve the guides, hygiene and sanitation, food services, and ensure a safe society.

Sangay Rabten from Thimphu