In a bid to increase the numbers of tourists and their length of stay the government is looking at waiving off USD 200 SDF for tourists who stay beyond 5 nights. This means that if tourists stay for 5 nights then the next five nights are free.
The numbers 5 have been obtained based on the average length of stay of tourists. It has been found that Asian tourists stay on an average of five nights while European and American tourists stay 7 nights.
There is a third scheme that is also being considered for hiking or trekking groups with 7 days full SDF, 7 days half SDF and then 7 days free.
The Department of Tourism had put up the proposal to the cabinet recently but the cabinet had sent it back asking the DoT to look at two aspects.
The first being if the numbers of days can be more flexible to include other numbers of days. The second being to see if family tourism can be promoted by giving waivers to children.
Right now only children zero to five years old are exempt while those from six to 12.
The cabinet wants exemption to be given to those under 18 years which would count as a family discount.
From the latest developments its looks likely the government will go for the single five nights’ discount package and also the family package discount where those under 18 do not have to pay.
However, the Association of Bhutanese Tour Operators (ABTO) and some tour operators the paper talked to feel that if the government is giving a 50 percent discount on 5 nights then it makes sense to 50 percent discount for each night which means if a tourist pays full SDF of USD 200 for one night then the next night is free.
An ABTO official and tour operators both pointed out that anyhow tourists come to Bhutan for around five to seven nights and most don’t stay longer due to the lack of tourism products.
They say that the above proposal of the government will not make much of an impact on getting more numbers or extending stays.
ABTO said that while it welcomes any tweaking to the SDF policy that will improve things it would have been logical to have one-night stay and the next night free. An ABTO official said that the one-night stay and one night free would be more lucrative and more interesting.
The concern among the tour operators is that the tourism calendar is planned up to a year ahead with for example the tourism calendars for countries like Laos, Thailand, Cambodia, Vietnam, Korea and Japan already out.
With uncertainty in Bhutan over the SDF, Bhutanese tour operators are unable to come up with such calendars for their international partners.
The concern also is that if the government is unable to come up with the new incentives soon enough then it may make it difficult to market the autumn season that starts from September and October till December.
The Tourism Department says it did a stakeholder consultation but while other associations were invited ABTO was not invited and instead around half a dozen hand picked tour operators were called and the discussion with them has been marked as a ‘stakeholder consultation.’
A tour operator on the condition of anonymity said that the 5 days’ discount scheme will again benefit only the bigger players who bring in the longer term guests.
The tour operator said that the Tourism Department is repeating the same mistakes again by not holding wider consultations to benefit the entire tourism industry instead of taking the voices of only a few big players who will look after their interests and will prefer to see the medium and smaller players to be killed off.
The worry is also that the the five-night scheme might be beneficial for longer staying European and American tourists who are mainly older and retired people it does not suit the Asian markets of Japan, Korea, China, Singapore, Vietnam, Taiwan etc who are a younger profile traveler and stay for a shorter duration.
A source said that younger Asian travelers can come again but this is not the case for the western older tourists.
“The top 20 Asian countries (minus India) has 3.5 bn people and the top 20 Western countries have 880 mn people. The math shows which market is more important in the longer run,” said the source.
A hotelier also on the condition of anonymity said that if the government is reluctant to give one-night stay and one night free then it should at least consider three nights stay and three nights free.
Time is running out as the tourism and hotel loan deferment comes to an end by 2024 June end and already hotels and tour operators say they are not in a condition to pay back loans. This could either result in record Non Performing Loans and even massive financial instability if large numbers cannot repay loans.