The Bhutanese Leading the way.
The hotel industry is currently engaged in discussions with the Ministry of Industry, Commerce and Employment (MoICE) and the Department of Tourism (DoT) to address growing concerns over financial strain, falling occupancy rates, and limited access to government support.
Hoteliers say that rising Sustainable Development Fees (SDF), high flight costs, and their exclusion from the Economic Stimulus Programme (ESP) loan scheme are threatening the sector’s recovery and long-term viability.
In response to these issues, hotel owners have entered into ongoing consultations with relevant government bodies and ministries. Among their key requests is a 50 percent waiver on the SDF, which they believe would make the country more attractive to international tourists. Hoteliers have also appealed for the removal of additional charges such as monument fees, which they say inflate travel costs and discourage visitor arrivals. Flight ticket prices remain another major concern, with calls for intervention to help make air travel more accessible.
The hotel sector has also been pushing for access to the ESP concessional loan scheme, citing financial pressures that have yet to ease since the pandemic. Many hoteliers say they are still unable to recover, with some reporting that they are struggling to pay staff or provide for their families. They believe access to low-interest loans is critical to sustaining operations and avoiding further closures.
The Hotel and Restaurant Association of Bhutan (HRAB) has been at the forefront of these consultations. The HRAB Chairman, Ugyen, stated that the tourism and trading sectors have been overlooked in the ESP framework. According to him, HRAB has already raised this concern directly with the Prime Minister, who acknowledged the challenges faced by the sector. The HRAB has also consulted the ESP Steering Committee and met with MoICE on 28th May this year.
Following the meeting, MoICE informed HRAB that it would discuss with the Royal Monetary Authority (RMA) on 14th July, the possibility of offering ESP loans to hotels at an interest rate of 4 percent. HRAB is now awaiting a response from MoICE regarding this request.
These issues were again discussed in a meeting involving hotel owners, the Director of DoT, and the HRAB Vice Chairman. During the meeting, hoteliers renewed their calls for financial and policy support and highlighted additional concerns, including the shortage of manpower in the hospitality sector. Many Bhutanese youth continue to seek employment abroad, and hoteliers have asked the government to consider extending Youth Engagement and Livelihood Programme (YELP) benefits to employees above the age of 29 working in the private sector.
Price undercutting among 3-star hotels was another issue raised during consultations, with hoteliers urging DoT to intervene and help regulate fair pricing to ensure business sustainability. Hoteliers also requested support in negotiating with banks.
Marketing support from the government was also discussed. Hoteliers recalled the Prime Minister’s earlier commitment to providing financial assistance for tourism promotion and expressed hope that this would be implemented without delay.
While continuing to consult with the government, HRAB stated that it is also pursuing parallel efforts to strengthen the sector independently. Recognizing that they cannot fully rely on public support, HRAB said it is looking forward to organizing training in hotel management and digital marketing to build resilience and improve service delivery.
Hoteliers emphasized that a reduction in the SDF could have far-reaching impacts. They believe it would make Bhutan more affordable, increase tourist arrivals, raise hotel occupancy rates, and encourage longer stays. They also pointed to the potential for attracting group travel and the broader benefits to the tourism value chain, from guides and transport providers to handicraft sellers and rural communities.
As consultations continue, hoteliers say that timely and coordinated support is essential to ensure the sector’s long-term survival and recovery.
