Occupancy rate in the hotels low as season starts

With lower numbers of incoming tourists, guests staying over at hotels have decreased largely with some hotels claiming to have decreased occupancy rate by 50 percent, and some are running on a loss.

Department of Tourism certified hotels like Park Hotel in Phuentsholing claims that with lower numbers of guests, occupancy rate has decreased more than 50 percent.

“Before, we used to have Indian guests from the border area stay overnight, and occupancy was quite high then, but now, Indian guests rarely stay over.”

Currently, the hotel shared that local occupancy is more compared to tourists and that they are running on a loss.

Hotel Bhutan Ga Me Ga also stated that their average occupancy rate is at 20 percent, a 15 percent decrease from before which was at 35 percent. Currently, the hotel also caters to locals and business entities.

Hotel Druk also shared that their occupancy rate dropped from 60 percent to 25 percent with most of the occupants being locals.

All these hotels claimed that they are running on loss with some hotels having to lay off their employees. They shared that income generation is impacted a lot which effects loan repayment.

According to Hotel and Restaurant Association of Bhutan’s (HRAB) officiating Chair, Tshewang Jurmi, the occupancy rate for most Department of Tourism (DoT) certified hotels, which are above 3 stars to cater to tourist, is even less than 5 percent.

He added, “We need at least 20 -30 percent occupancy rate to break even, however, with low occupancy rate income generation is affected. More than 50 percent of the hotels are dormant and not functioning. Employees have also left the industry.”

He also shared that without any guests, hotels serve no purpose. With the loan deferment period given to hoteliers nearing end, he shared that with less income generation, loan repayment will be affected.

If the hotels are unable to pay the loans, the loans will become Non-Performing Loans (NPL). With regards to this, Jurmi shared that he is hoping for some policy interventions from the government.

Similarly, Tashi Taj, a luxury hotel in the country shared that during on season period, occupancy rate was at 70-80 percent and 20-40 percent during off-season. Currently, the occupancy rate has decreased by almost 50 percent.

Talking to their reservation officer, she shared that since the pandemic, about 2,000 guests have stayed over. “The lower number of guests have highly impacted the employees’ salaries, and there are lesser number of employees.”

Talking with the Director of sales and marketing of DusitD2 Yarkay, he shared that occupancy rate will pick up steadily. “Generally, January and February are a slow period, and things only start picking up from end of March and goes into April, May and June. I think a slow pick up will start from there,” he said.

According to him, occupancies are lower than what it is, but this year is about restarting and rebuilding. The market is slowly picking up, and he shared that he is hopeful of a steady pick up.

Currently, the average occupancy rate of DusitD2 Yarkay is at 10-12 percent.

According to an impact assessment of COVID-19 outbreak on international tourism by the World Tourism Organisation (UNWTO), from January- September of 2022, international tourism picked up with arrivals reaching 62 percent of pre-pandemic levels.

With tourism picking up globally, the hoteliers are hopeful of steady increase in the inflow of tourists.

So far, as of February 2023, the number of inflow of tourists was 25,081 since the reopening last year.