Tourism revival at a snail’s pace

77,063 tourist visited Bhutan from 23rd September 2022 to 13th August 2023, which is around 23% of tourists who visited in 2019

On September 23, 2023, Bhutan reopened its international borders. Though there has been tourists who have visited Bhutan since then, the numbers are very low.  Only 77,063 tourists visited the country between September 23, 2022, and August 13, 2023. This is a far cry from pre-pandemic figures. In 2019, Bhutan witnessed a whopping 316,000 tourists during this period. While the department of tourism (DoT) is marketing Bhutan aggressively and at all possible platforms, outcomes so far has not been promising. 

Meanwhile, from the 77,063 tourists, 53,493 were Indian visitors, who paid the Sustainable Development Fee (SDF) of Nu 1,200 per night. The remaining 23,570 visitors came from different countries. From this, 0,462 tourists paid the old SDF rate of USD 65, while 13,108 tourists paid the revised SDF of USD 200.

Further, 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.

Initial expectations for 2022 projected international arrivals to recover between 55% and 70% of the 2019 levels. However, the actual numbers, 23% of the 2019 figure, suggest that recovery has been slower than anticipated.

Meanwhile, the upcoming festive season provides a glimmer of hope for the tourism industry. Many stakeholders are looking forward to an increase in the number of tourists during this time. Thimphu Tsechu begins on the 24th of September.

Executive Director (ED), Association of Bhutanese Tour Operators (ABTO) also expressed optimism, but with caution, stating that although the situation has improved comparatively, compared to before, it’s still a far cry from the pre-pandemic levels.

“This improvement is attributed, in part, to the new incentives (policy) implemented by the government on May 30, 2023,” he said, adding that though the policy will be effective until December 31st, 2024, it would be better if the policy becomes a  permanent one.

With the newly introduced incentives, visitors have the option to pay a Sustainable Development Fee (SDF) of USD 200 per person per night for the initial four nights. In return, they will not be required to pay the daily levy for up to four additional nights. In a similar manner, travelers can choose to pay the SDF of USD 200 per person per night for the initial seven nights, and as a result, they will be exempted from the daily levy for up to seven extra nights.

Another attractive offer entails tourists paying the SDF of $200 per person per night for a total of 12 nights, enabling them to enjoy up to 18 days without incurring the daily levy charges. Furthermore, a combined incentive of 12 nights and 18 days has been introduced, primarily catering to tourists interested in embarking on trekking adventures. The overarching aim of these SDF incentives is to promote extended visits to the country.

Meanwhile, Jigme Tshering, Chairman of the Hotel and Restaurant Association of Bhutan (HRAB), explained that hotel occupancy rates, which had dwindled to less than 25% of the 2019 figures a few months ago, are expected to rise in the upcoming season. He emphasized the importance of numbers in the industry’s recovery efforts.

Similarly, Chairman and Founder of the Guide Association of Bhutan (GAB), Garab Dorji predicted an increase in tourists visiting Bhutan, particularly during the peak season. He also mentioned that there has been a shift in booking behavior since the implementation of the new tourism levy act in 2022. Tourists now increasingly book hotels on their own and engage guides at the last minute.

However, amidst the modest progress, concerns linger. Tour operators are struggling to market and promote Bhutan internationally due to the nation’s ever-changing rules and regulations, a tour operator said. “The industry’s confidence in promoting Bhutan remains low, primarily due to the transient nature of the new policies. The lack of a permanent solution makes it challenging for stakeholders to plan marketing strategies effectively,” he said.

Another tour also said that Bhutan needs a concrete and consistent policy for the future of Bhutan’s tourism. “Without certainty, the industry will continue to struggle,” he said.

As Bhutan’s tourism industry navigates these uncertainties, the looming election and potential government transition add further complexity. The possibility of new policies and a new government has made it difficult for tour operators and hoteliers to plan for recovery and progress. 

As specified by the Bhutan Tourism Levy Act of 2022, the SDF is not applicable to children aged 5 years and below. For children aged 6 to 12 years, a discounted levy rate of 50% is applicable. Those aged 12 and above are subject to the full SDF rate. The aforementioned extended-stay SDF incentives can also be availed by children paying in US dollars.

Tshering Pelden from Thimphu