The Plight of Paro’s hospitality industry

The Plight of Paro’s hospitality industry

Paro, one of Bhutan’s most visited districts because of the Paro International Airport and massive tourism products was one of Bhutan’s most visited places. Before the Covid 19 pandemic, hotel occupancy in Paro was above 80%. And in April, the month of Paro Tsechu, finding a room in the scores of hotels and resorts in Paro was difficult, with rooms booked six months in advance. It is no longer the same. Hoteliers say that post pandemic and implementation of the sustainable development fee (SDF), has made the once thriving business move at a snail’s pace and hotel occupancy since then has not crossed 30 %. While some have already begun transforming their hotels into other income generating infrastructure, several skilled employed people in the hospitality industry are also leaving the profession as hotels can no longer pay them.   

The affects have not been on hoteliers alone. With less income, the hotel owners face tough time to support employees. “After SDF, we can hardly make income which is the worst of all times in the tourism history,” hoteliers say.  

Hoteliers opine that the introduction of the SDF along with increased air fares and entry fees have discouraged many potential visitors. “Fortunately, the revoking of entry fees is a good sign. Hope in due course, more amendments will follow suit, and I anticipate good tourist flow gradually,” one of the hoteliers shared. 

The reservation manager of Namseycholing Resort, Ram said that the hoteliers have drastically lost the earning space and feel that it is mainly because of the new tourism reform- SDF.  “Additionally, monument fees really discourage the tourists to visit Bhutan even if they have a dream of visiting Bhutan,” he said.  He shared that the tourists feel Bhutan is a very expensive destination and therefore intends to visit other cheaper countries around the world. “Thus, there are less tourists and more hotels with very minimum income and less employment opportunities to the youths,” he said.

The hotel industry owners say queries and block bookings do keep coming, but without conversion. In the past, human resource strength used to be more than 80 staff, but now with less arrival and less income, the resorts are running on 50 percent staff strength for simply they cannot afford more staff.

Metta Resort & Spa used to employ 90-95 staff before the Covid 19 pandemic, but now the manager said the hotel can hardly employ a maximum of 15-20 staff, because of the state of the hotel. The more concerning matter is “we are losing most of our skillful staff due to less income for the hotel and we are unable to afford their expected salary and the final solution is they opt to go abroad for better opportunities,” the manager said.

Higher number tourists are seen during the festival season. Comparatively, Indian tourist arrival are better after introduction of SDF.   “Before, we used to get more tourist from third world countries, visiting during the festival period,” said one of the hotel managers. “But now we don’t see it and it has not reached to earlier arrivals figures,” he added.

Meanwhile, Paro Tshechu will begin from 2 April and most of the hotel did not get any booking. The General Manager of Tashi Namgay Resort, Sonam Dorji said that in the past, for Paro Tshechu, bookings used to get sold out six months ahead. This time, he said, “we still have rooms available.” “Only on some selected dates, the rooms are completely sold out.”

The reservation manager of Namseycholing Resort shared that under very competitive rates with other hotels, the hotel got few booking. “I think we might not get even a single room occupied, forget about getting profit under such rates,” he said, adding that this is a discouraging situation to all the hoteliers.

From hear-say, the hoteliers shared that the gate collections seems much less comparing to earlier pre-covid across all monuments. Hopefully with recent amendments in entry fee structure, the hoteliers say collections is expected to increase. However, as the monument fee is high, they have heard tourists saying it is better to visit Chelela pass than Takshang monastery.

Meanwhile, some upcoming hotels have been altered into apartments and some existing hotels are still in a state of dilemma. The manager of Jiya Resort said, “People who have lease the hotel are suffering. We have invested in huge amount and now we don’t have capital to upgrade the hotel.”

The hoteliers of Paro are waiting and praying that one day or other, there might be changes in SDF and decreased monument fee to increase incoming tourist.” Otherwise, we need to convert hotels into other income earning business.” As the current tourism situation has created a negative ripple effect on many other industries, hotel owners suggest that the government should seriously relook into the current situation, and make adjustment to benefit majority of industries.

Sangay Rabten from Paro