Hotel industry still struggling

In the wake of the COVID-19 pandemic, the once-thriving hotel industry finds itself grappling with unprecedented challenges, such as low recovery rate from the pandemic, new policies implemented for the tourists, and adjusting with the latest trend which is a shift towards working with lean workforce.

Despite initial hopes in the beginning of 2023, the hospitality industry is struggling to bounce back, even during the peak season.

Department of Tourism (DoT) certified hotels like Chumey Nature Resort in Bumthang stated that the policy change has negatively impacted the hotel’s revenue, with low expectations.

They further added that the core issue is the low guest turnouts, which has limited daily room sales to a maximum of 2 during the peak season, and sometimes even less than 1 per day.

Hotels in the border areas, especially in Phuentsholing are also struggling with occupancy rate. According to the manager of Tashi Namgyel Grand Hotel, SDF has played a role in the decline of guests. “SDF has played a role in lowering our occupancy rate, however, we remain optimistic about the upcoming season, hoping there will be more bookings. The SDF incentive’s impact is quite varied but there must be some reported positive impacts.”

“Current trends in the hotel industry include a focus on sustainability, technology integration, personalised guest experiences, and enhanced hygiene protocols. Competition from Jaigaon has also led to hotels enhancing their services and offerings to remain competitive and attract guests,” he added.

As most Indian tourists come from Bagdora, the hotels in Phuentsholing also faces trouble with occupancy due to competition from nearby Jaigaon hotels with its better service and better pricing.

The Manager of Wangchuk Hotel in Mongar shared similar sentiments, as many other hotels around the country, on the drop in numbers.

“From an average occupancy of 23 percent in 2019, it has now dropped down to 5 percent. Although we have been given deferments in loans, we are concerned that we won’t be able to pay back the hotel loans,” he commented.

According to the Director of Sales and Marketing of DusitD2 Yarkay, Ankur Dhawan, despite improved COVID-19 conditions, the occupancy rate remains stagnant. He attributed this to the global trend in tourism, which is still low and the  SDF having an impact on the guest numbers.

“The occupancy rate is still around 10-15 percent. As far as the employment is concern, it is a continuous process, however, the challenge lies in recruiting skilled staffs, which has further complicated the hospitality sector’s efforts to regain its footing.”

The owner of Hotel Dekyid said that the hotel used to host a considerable number of Indian guests, but after reopening following the COVID-19 shutdown, they haven’t received any guests from the region. They’ve downsized their staff by half and they are operating with limited local visitors.

According to the Chairman of Hotel and Restaurant Association of Bhutan (HRAB) Jigme, “The SDF policy has improved tourist quality but led to lower hotel occupancy compared to pre-COVID levels. The upcoming peak season will see improved occupancy but still lower than 2019. Current occupancy is around 25 percent of pre-COVID numbers, posing challenges in loan repayment. Exodus plays a major role in the downfall of skilled workforce in the country.”

“HRAB and hotels will do their part in the sustainability and growth of this industry, however, the government needs to prioritize this industry for the growth and recovery of the economy,” he added.

The government introduced the new travel incentive on Bhutan’s SDF in June 2023 of 8 and 14 days scheme with SDF waivers of fifty percent which is designed to encourage longer stays that enable guests to explore more of what Bhutan offers.

The major trend in the hotel industry in the country is to explore the Indian markets and shift towards working with a lean staff.

Hoteliers are not very optimistic about the upcoming Autumn season and feel it could get worse in 2024 as the old USD 65 SDF tourists cannot come.

Many say that a simpler USD 100 per day SDF and lower airfares will help matters.

However, there seems to be some light for some hotels as bookings come in for the autumn season.

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