Having no policy limits tourism growth: NC Review

The Economic Affairs Committee (EAC), National Council (NC), points out that a strong policy for the tourism sector is needed. Tourism sector is the country’s second highest revenue generator, contributes to hard currency reserves, and an employment generator.  At present, the tourism sector is driven by “High Value, Low Impact” direction as stated in 11th Five-Year Plan.

The Chairperson, EAC, NC member of Chukha, Pema Tenzin, presented an interim report on review of the tourism sector policies and strategies on May 26, and floated a discussion on the report in the House.

The House discussed on the need of a comprehensive and legal framework dealing with the balanced regional tourism development, in terms of infrastructure and products creation, security views, standardization of the regional tourist visits, and creating more awareness on tourist potential areas.

So far, there has not been a policy in place for the tourism sector since the draft tourism policy failed to meet the Gross National Happiness Commission screening tools even after several attempts starting from 2013.

EAC said the pricing model of daily minimum tariff, feed in tariff, surcharges and discounts that cause more confusion and could result to loss of tourism business opportunities, has to be brought under a review.

A tourist visiting Bhutan pays USD 200 to USD 250. The amount covers the 34 percent royalty, 10 percent overseas agent commission, and 2 percent tax payments. The minimum daily package comes with a three-star accommodation with all meals provided, a licensed tour guide, and covers the internal transport and tour service charges.

The committee also observed that the government needs to give a clear direction for the Tourism Council and work on policies that enhances inter-agency coordination in tourism development and role of industry association.

The committee also pointed out on proper fiscal policy issues, such as foreign currency and maintenance of dollars account, taxation policy, revenue recording and subsidies. Even though the number of tourist arrivals has increased, however, it has not been able to provide gainful employment, the committee found.

The committee also observed that the tourist service facilities, such as guides, transports, proper accommodation for regional tourists (India, Nepal and Maldives) must be standardized.

On this, NC member of Thimphu, Nima Gyaltshen, asked on the need of a policy for regional tourists. He said that they bring their own vehicles, take photographs in forbidden places and are without guides. He also pointed out that Indian tourists exchange rupee with ngultrum with a 5 percent commission.

Similarly, NC member of Lhuentse, Tempa Dorji, shared his views on the unbalanced tourist visits across the country. He said there is a need to create awareness on where tourists can visit or not as there are many sacred places in Bhutan. He said there is very less coordination between the concerned authorities to oversee such matters.

The committee said that the existing Foreign Direct Investment (FDI) policy and practices of the tourism sector (five-star hotels and resorts) and their inter agency coordination for tourism development is a concern.

It observed that the regional tourism distribution issue is a major challenge despite some intervention being in place in the 11th FYP.

Deputy Chairperson, NC, Tshering Dorji, said the tourism sector in Bhutan is not benefiting the people living in rural places even though the sector employs of 30000 employees.

NC member of Samdrupjhongkhar, Jigme Wangchuk, said that Samdrupjhongkhar misses out on tourism business as the dzongkhag is tagged a security risk area.  He said the dzongkhag is not a risky place anymore.

NC member of Sarpang, Dhan Bdr. Monger, said that the Royal Manas National Park should be opened as a tourist destination.

Chairperson of NC, Sonam Kinga, asked the committee to review the report on regional tourism along with the immigration department and the Tourism Council.

Thrizin Sonam Kinga also asked the committee to review the Tourism Council’s effort on tourism product creation and its impact on the lives of the rural dwellers. As for the Royal Manas National Park as a tourist destination, Thrizin said the Ministry of Home and Cultural Affairs must consider the security aspects.

He also asked the committee to review the on budget and infrastructure development as well as plans and programs to bring forth a balanced regional tourism growth.

Currently, there are 2418 tourist guides and 1300 tour operators in the country. The EAC Chairperson said that the guides are employed once in two months. Most of the guides earn Nu 500 per day, with the experienced guides earning more at Nu 1500 per day.  He added of that only half of the tour operators are doing well. He also said that tour operators are more interested in earning dollars than rupees.

There are 123 hotels and restaurants in the country. In 2013, the tourism industry earned USD 63.69 mn and employed 30000 people in 2014.

EAC made comprehensive research on relevant laws, policy reports and master plans, like the 11th FYP tourism sector document, tourism strategy and development plan 2013-2014, draft tourism policy, and tourism annual report to come up with its report. The committee also held meetings with stakeholders.

In forthcoming months, EAC will hold meetings with the Hotels and Restaurants Association of Bhutan, Guides Association of Bhutan, Royal Institute of Tourism and Hospitality, and also make field visits to community managed projects and other tourist destinations.

The National Council will make its final recommendation to the government after holding its discussions in the winter session of NC.

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