Govt. considering Sunset Clause to revive tourism

Govt. considering Sunset Clause to revive tourism

Discounted stays and trekking incentives and family vacation are some of the measures being discussed under the Sunset Clause

In what appears like a determined move to revive the tourism industry, the government along with stakeholders is considering introducing a Sunset Clause to aid the industry’s recovery from the pandemic.

A Sunset Clause is a provision in a Bill that gives it an expiry date once it is passed into law. Sunset clauses are included in legislation when it is felt that parliament should have the chance to decide on its merits again after a fixed period.

According to the Minister of Industry, Commerce and Employment, (MoICE), Lyonpo Karma Dorji, the government expects the tourism sector to return to pre-pandemic levels by 2025. If this goal is met by the end of 2024 or June 2025, the Sunset Clause will be eliminated, leading to a resumption of normal tourism operations.

Some measures that are under consideration include options to attract tourists and promote longer stays, including discounted stays and incentives for trekking enthusiasts. The Department of Tourism (DoT), empowered by the tourism act, holds the authority to determine concessions, discounts, and benefits for tourists.

Lyonpo Karma said in order to determine the optimal choices, the government analyzed the 2019 data, as data of recent years were not reliable as the industry was heavily impacted by the pandemic and deemed unreliable.

“Based on the 2019 tourist arrival statistics, it was observed that Asian tourists typically stay for an average of 4-5 nights,” he said, adding that offering discounts or exemptions after five nights could provide an incentive to extend their stay. For example, if a tourist stays for five nights and receives an additional five nights for free, they are more likely to prolong their visit.

“This approach motivates tourists to extend their stay, resulting in a longer duration and increased spending,” Lyonpo said.

Subsequently, in line with this, the government is currently considering options such as 4-4 or 5-5, which would provide tourists exemptions from the Sustainable Development Fee (SDF) for five days or four days for tourists staying for the same duration.

“The final decision regarding these options is yet to be made,” Lyonpo shared.

Additionally, Lyonpo also mentioned that the 7-7 option targets European and American tourists who tend to stay for an average of seven to nine nights.

“By offering an additional seven nights for free, if they pay for seven nights, we aim to encourage these visitors to extend their stay, positively impacting the country’s economy.”

Furthermore, the government is also exploring the 7-7-7 approach to promote trekking activities. Bhutan offers various trekking routes, including the popular Snowman Trek and other trails that can last 30 days or more.

“Currently, tourists have to pay the SDF for the entire duration of the trek, which is expensive and deter them from choosing trekking options. By providing seven additional nights for free, the government hopes to incentivize tourists to engage in trekking activities, benefiting small businesses such as tent rentals, and pony and  porter services,” the minister said.

Lyonpo added, “For instance, if a tourist stays for 12 days, they will be given an additional 18 days for free. Similarly, for a 15-day stay, another 15 days will be offered without charge. These initiatives aim to generate interest among trekkers and further promote trekking tourism in Bhutan.”

He also added that these measures are not permanent and will have a time-based implementation. The SDF rate will remain the same, but discounts will be provided for extended durations to encourage longer stays.

“The planned Sunset Clause may keep these measures in place for one, two, or possibly three years. These measures were designed to gradually recover and offset the impact of the pandemic on the tourism industry, with the expectation that the sector will return to pre-pandemic levels by 2025. If the industry achieves this milestone by the end of 2024 or June 2025, the sunset clause will be removed.”

Furthermore, the government also aims to promote family tourism by waiving the SDF for individuals aged 18 years and below.

Lyonpo Karma Dorji said recognizing that children often play a role in deciding family vacations; this measure seeks to encourage families to visit Bhutan. It is important to note that individuals under 18 years old are not allowed to travel alone without their guardians or parents.

“The primary objective behind these measures is to encourage long-term tourism and increase tourist spending, benefiting the overall tourism ecosystem, which includes local guides and hotels.”

Meanwhile, the ongoing discussions will shape the final decisions on these measures by June. Additionally, the applicability of these options for non-tourists will depend on their visa, according to Lyonpo. However, the minister reiterated that these are just in the discussion phase and that nothing has been decided.

Tshering Pelden from Thimphu