Govt. to develop tourism policy to address rampant undercutting

TCB Director claimed that just about 20% of tour operators would be engaged in underselling tour packages below the premium set by the government

The government plans to develop a new tourism policy to address multiple issues confronting the tourism industry including rampant practice of undercutting in the tourism industry. 

Talking to the media at the Meet-the-Press yesterday, Prime Minister Dr. Lotay Tshering said that the issue of undercutting, which most tour operators currently practice, would be addressed once the tourism policy is in place. 

Tour operators attending the recently concluded national tourism conference raised the issue of undercutting in the industry and how this affects the business of small players in the market.

Tourists visiting Bhutan pay a minimum package of US$ 200 per person during lean season and US$ 250 during the peak season. However, some of the tour operators allegedly undersell tour packages for as low as US$170 per person.

Lyonchhen said that everyone is aware of the issue of undercutting in the tourism industry and how it is done. “Once the policy is in place, the issue will be addressed,” said Lyonchhen.

The Foreign Affairs Minister, Dr. Tandi Dorji, who is also the Chairman of Tourism Council of Bhutan (TCB), said that the practice of undercutting issue goes way back when the industry started in1970s.   

Lyonpo Dr. Tandi Dorji also said that during the first council meeting held on February 25, they discussed the issue and how undercutting can be addressed and removed.

He said the government would take recommendations from the Association of Bhutanese Tour Operators as well as from Bhutan Chamber for Commerce and Industry with special emphasis on tourism industry.

“We have the answers and I would like to assure that we have an effective plan under a very effective Director General,” said Lyonpo Dr. Tandi Dorji. “The payment system will made online and it will be transparent.”

Lyonpo Dr. Tandi Dorji also said that TCB would conduct a study involving multi-sector stakeholders to develop ways to address the issue of undercutting.

The Director General (DG) of TCB, Dorji Dhradhul, said that there is no written policy on tourism as of now. “Once the policy is ready, everything will be in place. We will review the payment system to make it more transparent,” he said.

He said that the practice of undercutting has decreased compared to before. “Only about 20% of the tour operators maybe engaging in undercutting,” he said.

The Director General said the daily minimum package of US$ 250 is in fact cheap for tourists, which include expenses for three-star hotel accommodation, transport, food and tour guide.

The Prime Minister also said that tourism is a flagship program in the 12th plan and the government plans to make Bhutan a tourist destination year round. 

However, Lyonchhen said that the flagship program is yet to be approved.

Currently TCB is working on the flagship program.

 “The new tourism policy will redefine high value, low impact policy. The high value, low impact should not only take the number of tourist arrival but also should bring in high revenue,” said Lyonchhen. “We would prefer one tourist bringing Nu 1,000 than 100 tourists bringing Nu 1,000.

Dechen Dolkar from Thimphu