Disgruntled tour operators lash out at TCBS over Royalty charges

Tour operators in the country are hot-under-the-collar about the Tourism Council of Bhutan Secretariat (TCBS)’s decision to increase Royalty charges by 25%.

With the increase, royalty payments would go up to almost 25 Crores.

The Royalty was increased by USD 15 for peak season which now takes it up to USD 80 and USD10 for lean season which now becomes USD 75. The increased Royalty will be retained by the TCBS as their budget while normal Royalty of USD 65 to the government remains the same.

More than 100 tour operators gathered in a recent meet to discuss the increase of Royalty. As per Bhutan Tourism Monitor of Annual Report 2011, there are about 741 registered tour operators out of which 318 are operational.

Majority voices echoed common sentiments, that an increase in Royalty which follows tariff revision on tourists (from USD 200 to USD 250 this year) will directly affect tourism businesses and indirectly – the scope of tourism industry for Bhutan in the bigger picture.

The increase in royalty charges would cause huge inconveniences for most of the tour operators who have already sold-out tour packages for the spring season at the rate of USD 250.

For instance, Etho Metho Tour and Treks Pvt. Limited has already sold out packages for the next two years on same tariff.

A spokesperson for Dream Adventure Travel said “we are not in support of the proposal as Royalty will have an impact directly on our margin since the revised Royalty charges are far higher compared to the income we generate”.

Aggrieved parties proposed that Instead of 25% on Royalty, the Council could make use of the visa fees and the surcharges which amount to USD 1.25mn as per the calculation of 2011.

A tour operator said the public has a wrong notion that Tour operators make huge profits and this detail was also reflected in the statistics of 2011 where it was mentioned that tour operators earn a net profit of USD 31mn.

“This is actually the gross amount which is ‘shared’ among other stakeholders,” said the tour operator.

Delinking the Tourism Council of Bhutan (TCB) was aimed to make the tourism industry fully professional and more dynamic with added services but, Operators say this has not really taken the desired direction.

A BTCL representative who was sympathetic for the tour operators said many tour operators have ‘little or no-knowledge’ about the proposal on increased Royalty charges.

“I feel, the tour operators’ ire over the issue is very legitimate,” said the BTCL representative. He said the operators are right to be angry or sad over the total lack of consultative-meetings or discussions before deciding changes in the Royalty payments.

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