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Hotel owners have raised concerns that the Economic Stimulus Program (ESP) Interest Support Scheme provides greater benefits to businesses that are already able to meet their full loan repayments. Under the scheme, hotels that can repay 100 percent of their monthly loan instalments qualify for the maximum interest support from the government.
However, hotels that can afford to repay only 30, 40, 50, or 60 percent of their monthly instalments because of weak business conditions receive lower support. Many hoteliers argue that this approach leaves financially distressed businesses at a disadvantage, as those facing the greatest repayment challenges receive the least assistance. They say the scheme should provide stronger support to hotels that continue to struggle with low occupancy and limited cash flow.
Ugyen Dorji, proprietor of Hotel Ugyen in Olakha, Thimphu, said hoteliers appreciate the government’s initiative to support the tourism and hotel sector. However, he said many hotel owners believe the current scheme is unfair. According to him, the level of support under the ESP depends on how much of a hotel’s monthly loan repayment it can make. As a result, hotels that are financially strong enough to repay 100 percent of their loan instalments receive the highest level of support, while those facing financial difficulties receive less assistance.
“The biggest concern is what happens if the business does not recover after one year. Many hotels may still be unable to make their full loan repayments,” he said. He added that borrowers who fail to meet the scheme’s conditions may be required to return the ESP support received from the government. “This creates uncertainty and discourages many hotels that are already struggling financially,” he said.
Hoteliers say the scheme largely benefits businesses that already have strong cash flow or other sources of income, rather than those facing financial hardship. Another concern is the requirement for hotels to obtain a valid star-rating certificate to qualify for the ESP loan support. Obtaining or renewing the certification requires hotels to meet the Department of Tourism’s standards, which often involves costly repairs, upgrades and other improvements. Many hotel owners say they have spent considerable sums to meet the certification requirements, only to receive what they describe as a relatively small amount of financial support.
Hoteliers say they had been requesting government support for the sector for many years. The issue was raised repeatedly in Parliament, and the approval of about Nu 850 million under the ESP was initially welcomed by hotel owners. However, many hoteliers say their optimism faded after the eligibility criteria were announced. They claim the conditions to qualify for the support are too stringent, leaving many hotels unable to benefit from the scheme.
Hoteliers say several eligibility requirements have made it difficult for many businesses to qualify for support under the ESP, and one of the key requirements is that hotels must hold a valid certification from the Department of Tourism. Many hotels have expired certificates, and owners say renewing them requires passing a detailed assessment that involves considerable time and expense.
Another condition is that hotels must be registered under the Tourism Registry System (TRS). According to hotel owners, many establishments have yet to complete the registration process. The scheme also requires loan accounts to be free from Non-Performing Loan (NPL) status. Hoteliers claim that this excludes many businesses that are struggling financially and are in greatest need of assistance. In addition, beneficiaries must continue repaying their loans without default for three years. Under the scheme, the government subsidizes four percent of the interest while the lending bank contributes one percent for the first year. Hotel owners are then required to repay their loans in full for the following two years without missing a single installment. They say that failing to meet this condition during the observation period could result in them having to repay the benefits received under the ESP.
The Hotel and Restaurant Association of Bhutan (HRAB) said it will hold its Annual General Meeting (AGM) on 28th July, bringing together hoteliers and key stakeholders, including the Department of Tourism (DoT) and the Royal Monetary Authority (RMA), to discuss issues affecting the hospitality sector.
Meanwhile the Minister for Industry, Commerce and Employment said the DoT has received 284 applications from eligible 4-star and below hotels. A thorough vetting of all the applications is going on. Those who meet the criteria are issued with the Verification Letter (VL) for onward submission to the Financial Institutes. As on 2 July 2026, 84 hotels have been issued with the VL.
On the possibility of seeing any change in the amount allocated for the scheme the minister said, “As of now, we are of the view that not much changes would occur since the approved amount projection was based on the estimates done by the Ministry and RMA referring to the number of hotels licensed/registered and loan amount records.”
Lyonpo said the implementation of this hotel loan interest subsidy is guided by a framework that has a clear set of approved eligibility criteria and implementation modalities. Since currently 2- Star and below hotels are certified by the Dzongkhags, DoT and Dzongkhags are also undertaking field assessments for verification and certification/recertification purposes.
Only after all these processes, hotels are issued with Verification Letter for onward process with their respective FIs. The FIs too have their own internal process and prudence measures which are being guided by RMA. So, we can assure that this hotel loan interest subsidy is being implemented in a most fair, transparent and accountable manner.
