The Bhutanese Leading the way.
In December 2025, the Economic Stimulus Plan (ESP) Steering Committee approved the 4 percent loan interest subsidy for hotels under the Reinvigoration Fund (RGF) of the ESP.
The matter was recently presented to the Cabinet for final approval; however, the issue has been sent back with concerns that there are certain conditions that may exclude some hotels.
One of the conditions was that hotels which were not doing well even prior to the pandemic should not get support, but here it was made clear in the Cabinet that the ESP is meant to stimulate and support the economy and is not related to COVID.
In short, the Cabinet wants fewer terms or conditions that may exclude certain hotels that are impacted, and it wants to ensure that the final plan makes as many hotels eligible as possible.
However, the reason why the Cabinet could not take an immediate decision is that the ESP Steering Committee must also ensure any final decision is within the Royal Monetary Authority (RMA) guidelines and within what banks can implement.
The ESP loan controversy has left a bad experience with the Cabinet, and the concern now is that exclusions, even if it is to adhere to certain guidelines, may again lead to allegations from hotels that are not eligible.
The aim now is to make as many hotels as possible eligible for the subsidy loan without too much conditions and preconditions that would exclude them.
RMA had initially given until September 2025 to take one of the seven options to restructure loans, but this was extended for hotels till December 2025.
Hotels were getting worried that the deferral would end in December while the interest subsidy was still awaiting approval..
A source in the Ministry of Industry, Commerce and Employment (MoICE) earlier said that it is because the MoICE is working with the RMA that a deferral was given till December and if it goes into January 2026, then it can be further extended.
If a hotel gets this facility, then for a hotel with a 12 percent loan, the 4 percent subsidy will allow it to pay only 8 percent a year.
Hotels have been the worst hit with the post-pandemic tourism decline, with hotels almost doubling in numbers after the pandemic, coupled with a drastic drop in tourist numbers and their stay in terms of number of nights.
