The USD 100 dialogue

With the Ministry of Industry, Commerce and Employment announcing changes to the sustainable development fees (DF) for dollar-paying tourists to boost the tourism sector and bringing it down to USD 100 from USD 200, those in the hospitality industry are hoping that the number of tourists will increase. However, there are apprehensions of quality compromising, the infrastructure capacity of Bhutan and others.  

Founder and Chairman of the Guide Association of Bhutan (GAB) Garab Dorji, one of the most experienced in the tourism industry said tourists are “not like us, who suddenly decide to go for a holiday and leave.” “They plan and schedule their holidays. They would not have known that the Bhutanese government would reduce the DF and so they may have planned to go to other countries,” he said.

“Your paper had reported that from the total number of tourists who came to Bhutan between September 23, 2022, and August 13, 2023, 10,462 tourists came paying the old DF of USD 65.” According to Garab, the reasons for the delay could be, a planned trip and the situation of the global economy. “It is not just Bhutan seeing a decline in the number of tourists. Our neighbors like Nepal and Thailand are facing the same problems.”

According to the World Tourism Organization (UNWTO), the pandemic brought the international travel industry to an almost total standstill. Lockdowns imposed around the world resulted in a 49% decline in activity and a loss of close to $4.5 trillion (£3.7 trillion) compared with 2019. Nepal tourism statistics for 2020 was 238,000,000.00, a 70.29% decline from 2019. According to the data published by Nepal Tourism Board (NTB), in 2022 about 600,000 tourists visited Nepal. Similarly, Thailand saw 39.8 million tourists in 2019. It fell to 11.15 million in 2022. 

When asked about the government’s new move, Sonam Dorji an entrepreneur said that while the number of tourists would increase, there will also be questions asked by visitors. “The SDF was increased to USD 200 by focusing on high-end quality services. We told the world to visit Bhutan paying the USD 200 SDF and that it is worth it. People may now think that with the reduced SDF, services could be compromised.”

For clarity on this, Sonam said the Department of Tourism (DoT). media and tour operators should play a very important role. “Information dissemination is very important,” he said.

Adding to it, Sonam also cautioned that all stakeholders should be ready for a “tourism boost that could blast.” “The ministry’s announcement states that the government would conduct periodic assessments of the domestic and international tourism scenarios and may discontinue the above incentives to uphold and promote the High-Value Low Volume Tourism Policy after August 31, 2027.” According to Sonam, this could lead to visitors who wish to visit Bhutan coming in heavy numbers. With the government saying that the incentive could be discontinued, visitors will want to come when the incentive is still there, he said. “So if there are very huge numbers of tourists coming at once, do we have the infrastructure to provide the Bhutanese experience?”

A tour operator expressed optimism that the number of tourists will increase. “But what do we do after 2027 or four years? Will the SDF be revised in parliament?” According to him, the hospitality industry is one that will continue contributing to Bhutan’s economy. “There is a need for a strategic, clear, sustainable and visionary policy for tourism. We cannot experiment,” he said.  

Meanwhile, another change is the 50 percent discount on the SDF rates applied to children aged between 6 and 12 years for US dollar-paying children visiting as tourists. The 24-hour SDF waiver for tourists staying in the border towns will continue. The above incentives will come into effect from September 1 and will remain effective until August 31, 2027.

According to data released by the Department of Immigration, a total of 77,063 tourists have visited the country between September 23, 2022, and August 13, 2023. Breaking down the numbers, it is revealed that out of the total tourists, 53,493 were Indian visitors who paid the Sustainable Development Fee (SDF) of Nu 1,200 per night. The remaining 23,570 visitors hailed from countries other than India. The distribution of the fee payment was also notable, with 10,462 tourists coming for the old SDF rate of USD 65, while 13,108 tourists came with the new SDF rate of USD 200.

Further insights from the immigration data highlight that 12,053 tourists were granted pre-permits, while 41,441 tourists obtained permits upon arrival. This signifies a cautious yet optimistic reopening of the nation’s borders after the extended travel restrictions due to the pandemic.

Ugyen Tenzin from Thimphu