With the new Tourism Levy Bill of 2022, tourist expenditure in Bhutan will increase by at least 50%
Many tour operators are anticipating a fewer number of tourist arrivals in the country now with the Nation Assembly adopting the new Tourism Levy Bill of 2022, which mainly consists of an increased Sustainable Development Fee (SDF) from USD 65 to USD 200 per tourist per night and the removal of the Minimum Daily Package Rate (MDPR) on June 24.
Previously, a tourist had to pay USD 200 to USD 250 as MDPR per person per night, of which USD 65 goes to the government as the SDF. However, with the new tourism reforms, a tourist will have to pay USD 200 per night as SDF in addition to paying separately for a hotel, meals, transportation, and a guide.
While they are fine with the new Bill because the government is putting more emphasis on high value, the Executive Director of the Association of Bhutanese Tour Operators (ABTO), Sonam Dorji said, “But after the pandemic and with the ongoing global recession, the increased fuel prices, the number of tourists is going to decline. When the number of tourists declines, the number of tour operators and guides also automatically decreases.”
He added that the increased SDF is like a final nail in the coffin for the tourism sector.
According to him, it is anticipated that tourism revenue in Bhutan will increase by at least 50% as a result of this new Act. Previously, a week-long tour in Bhutan should cost at the very least USD 1,740, which is inclusive of the SDF, lodging, all meals, transportation, and a guide.
“Now a week of tour in Bhutan is expected to be USD 2,500,” he said, adding that with this, they might lose the middle-income earner tourists in great quantity.
During a session of the National Assembly, Prime Minister Dr Lotay Tshering informed that the reasons for the SDF pricing were to reinvest the money raised in transforming Bhutan into an exclusive high-end tourist destination and raise the general standard of the tourism industry in terms of the quality of guides, hotels, meals, and hygiene, and to ensure a safe environment.
However, other than the increased SDF, no facilities are operational currently, according to the ABTO.
“The government has plans to upgrade the facilities, infrastructure, 24/7 visa, upgrading of facilities, professionalize the training, which is good but it will take some time,” said the Executive Director, adding that there was no consultation at all with any of the tourism stakeholders while enacting this law.
“The NA just passed the new Tourism Levy Bill. However, it makes no mention of boosting the services,” Sonam Dorji said.
“It seems like increasing services such as the payment gateway systems, services, upgraded toilets, and roadside amenities have been utilized as a reason to increase the SDF.”
According to the Executive Director, as much as raising the SDF and doing away with the MDPR is required, much revamping is required in the tourism sector.
‘Now that the act has been passed, we are hoping and expecting to be involved in the formulation of its rules and regulations. Details are important, and details can be found in the rules and regulations. Acts only have two to three crucial sections, and rules and regulations determine how those sections should be constructed,” he said.
Meanwhile, the revised SDF will not apply to tourists who have confirmed their travel to Bhutan before June 20.
Subsequently, the Tourism Council of Bhutan (TCB) has announced that the country will welcome tourists along with the opening of the borders on September 23.
Tshering Pelden from Thimphu