MoEA recommends liberalizing tourism tariff while MoF wants restriction on new hotels

Both ministries support re-opening tourism in a safe and select way

The Ministry of Economic Affairs as part its economic revival strategies and interventions after COVID-19 has recommended some reforms in the tourism sector of which the main one is liberalization of the USD 250 tariff system.

It recommends that this daily international tourist tariff should be freed up and only the USD 65 sustainable development fee should be retained.

The MoEA said that while Bhutan is perceived as a high-end tourist destination by the international community due to its fixed tourist tariff of USD 250 to 200 per day international tourists are deterred by the high upfront tariff especially as they do not realize that the USD 250 to 200 per day includes the sustainable development fee, hotel accommodation, food, transport and guide.

The ministry says that tourists coming to Bhutan, are required to come via established tour agencies who normally have agreements with a small number of hotels leaving tourists with limited hotel options.

It says with the increasing reliance on the internet via hotel reviews and recommendations, tourists may have a hotel in mind but are unable to book the hotel of their choice.

The ministry recommends that the Department of Immigration should consider changing the visa requirements for international tourists, whereby tourists can obtain their visas with a hotel booking, and a licensed tour guide, thereby giving them the option to customize their trips to Bhutan.

It says to encourage tourists to revisit Bhutan, the government should consider giving tourists more freedom in second and subsequent visits, for instance, paying a lower SDF and being exempt from having a guide.

It says TCB can consider a trial-run on permitting international tourists to visiting the eastern parts of Bhutan to customize their trips without a tour operator. This could encourage international tourists to visit the East, as they could opt for flights, as opposed to the current scenario whereby majority of tour operators opt to drive to the East as a cost-cutting mechanism, thereby deterring international tourists due to the long drive times to reach the Eastern parts of the country.

The ministry says that based on the outcome of this trial-run, TCB can determine the feasibility of allowing international tourists to customize their own trips without having to go through a tour operator.

The recommendation is also adopting the charging of sustainable developmental fees in a more discrete manner which could potentially increase the likelihood for tourists to visit Bhutan.

On the above while other stakeholders of the tourism industry like the Guides and Tour Operators support a liberalized tariff there is likely to be a strong push back to any suggestions to have any tours without tour operators or guides.

The Ministry of Finance in its revival report recommends for the government to put a temporary restriction on hotel construction and FDI in service sector and reprioritize in other sectors. This recommendation arises out of the concern that there are too many hotels with a high exposure level in loans from Financial Institutions.

However, at the same time there are concerns in other levels of the government that the market should decide and not the government on what is a viable economic sector.

The MoF has also recommended that Budget hotels redesign their business model.

Both the MoEA and the MoF are on the same page when it comes to reopening tourism. The MoEA has recommended bubble tourism. The MoEA has also recommended future tourism contracts whereby the government can start selling tourism packages for the future and if tourists cancel then there is no refund while if the government cancels then a refund is given.

The MoF has recommended that Bhutan open tourism in a restricted manner with tourists from selected countries until COVID situation persists. It also recommends promoting work based or MICE tourism with proper standard operating procedures in place.

The MoEA recommends that Bhutan use this lull in international tourism to promote Bhutan as a future destination using the Digital Marketing Strategy.

It says the government should market Bhutan vigorously online as research shows that that more people around the world are now online for a longer duration than ever before. Furthermore, based on surveys conducted by the TCB, some 64 per cent of the tourists who visited Bhutan in 2019 learnt about Bhutan from the internet.

It says more digital content should be created immediately promoting Bhutan as an attractive travel destination as the probability of visibility of such promotional campaigns will be high right now.

This the MoEA says can translate into more inflow of tourists once the country opens up allowing people to come into the country.

Both the MoEA and the MoF have also recommended promotion of Domestic Tourism. The MoEA says there is a need to promote domestic tourism for equitable regional development and employment generation and so our packages to religious, cultural sites, site seeing, etc. should be promoted. The MoF recommends that the government should host local trainings and meetings, seminars and workshops in hotels.

The MoEA has recommended that Bhutan should invest to widen its tourism product offerings.

It says diversification of tourism products and activities can be promoted by providing fiscal incentives, and access to finance with lowered interest rates. To diversify tourist attractions, development of new tourism products and services such as ropeways, kayaking etc must be encouraged.

The Ministry recommends that Bhutan’s tourism sector should go beyond the current businesses of fixed travel itinerary and trekking and it needs to create a vibrant tourism environment, whereby tourists can contribute to the local economy instead of a fixed fee, structured program and free sightseeing programs.

The MoEA has also recommended the promotion of wellness tourism with a USD 639 bn global market in 2017, growing more than twice as fast as general tourism. It says wellness tourism fits Bhutan’s value proposition due to the country’s availability of approximately 400 medicinal and aromatic plant varieties.

The ministry says that wellness tourism can also capitalize on Bhutanese traditional healing methods such as So-Wa Rig-pa (Bhutanese traditional medicine) and promote the traditional hot stone and hot spring baths as an avenue for revenue generation.

Check Also

Shops buying tobacco from duty free and selling it in their outlets

Bhutan Narcotics Control Authority (BNCA) have seized 100 packets of cigarettes, 100 packets of Baba …

Leave a Reply

Your email address will not be published. Required fields are marked *