Paro Town

Paro Town drying up with migration, reduced buying power and lack of tourists

So far it is well known that business outlets in major towns like Thimphu and Phuentsholing are not doing well with reduced customers, but now even the iconic Paro Town is suffering with the same issue.

The reporter talked to a range of business outlets and found that it is not only tourism dependent businesses like hotels and handicrafts suffering, but all others like grocery shops, mobile repair and others who rely more on local customers.

Grocery

The narrative during and after the pandemic is that grocery shops are doing well as they rely on local customers and this is the same view among business people in Paro town.

However, Aum Karma of the grocery shop Karma Tshongkhang said, “We are dry too as many people have gone to Australia.”

She said the business is down by around 40 percent compared to the pre-pandemic stage of 2019 or early 2020.

She said luckily the building belongs to her otherwise she would have to close shop if she had to pay rent since the profit margin in grocery is very less and the business is slow.

Aum Karma said that all business outlets in Paro Town are down.

She said that apart from the lack of local customers the lack of tourists has impacted tourism dependent businesses like handicrafts, cafes and others and some have even closed and gone to Australia.

She said that if there were more tourists then even she would be positively impacted as the cafes and hotels would buy supplies from her.

Café

Champa Café is one of the popular cafes that have come up over the years in Paro Town catering to both tourists and locals.

The café owner Sangay said there is a big difference from 2019. He said a combination of less tourists and reduced spending by locals reduced his business by 70 percent, and now he is trying to sell his café.

He said it is already season time by mid-March when they should be getting a lot of tourists and there have already been some festivals like Punakha Tsechu festival and others are coming up.

“We have not seen many tourists and those tourists coming are also mainly coming with the old tariff rates who are allowed to come till December 2023,” he said.

He said Paro depends on tourism one or the other way as this is the tourism hub and when there is no tourism then there is no customers in the market.

He said in Bhutan tourism is one of the main revenue generators and people one way or another depend on tourism like guides, drivers, hoteliers, souvenir shop owners, etc and so when there is no tourist flow their source of earning is lost.

“Many souvenir shop owners are saying they want to close as they are not making enough money. Sometimes in one week they cannot even do a ‘Boni’ (sell the first single time),” he added. 

Sangay said the ones who have lost tourism jobs have also joined the ongoing rush to go abroad. He said even people who are here are also thinking of going and this is the main talk in his café.

He pointed out that shops in Paro town are having a tough time paying rent because the margin of profit is very less.

“The young can leave but for the older generation it is becoming hand to mouth,” said Sangay.

He said apart from him many other coffee shops and restaurants are trying to sell their businesses.

Apart from tourism other factors like inflation, lack of workers due to migration and reduced spending power of locals have also hit him.

He said, “Before pandemic I used to pay Nu 1,200 for a bag of flour and now I pay Nu 2,400 per bag. French fries are one of the main sellers. Earlier I used to pay Nu 310 per bag and now I pay Nu 575 per bag.”

With large number of youths leaving for Australia, Middle-East and other destinations he said it is very difficult to get staff and whoever comes for work want to work only for two months or so.

“Unlike grocery shops we have to train them and then after two months they leave. There is so much pressure and we cannot handle it. We have to even request staff to stay on with two hands folded but they do not stay,” said Sangay.

He said that Bhutanese after the pandemic are spending less due to both less disposable income and also a new savings habit.

“After the pandemic people have learnt a lot regarding the importance of saving their income. Before they were not calculative but now after the pandemic they are very calculative. Earlier people used to have a habit of eating out but now they prefer to cook at home and eat. The people buy all the essentials first and it is only with the leftover money that they may come or not. What also does not help is that the cost of living has gone up,” said Sangay.

Sangay said he feels like a servant buying food stuff and paying rent of Nu 40,000 with minimal customers and staff not staying.

Mobile repair shop

Yonzon Mobile Business is a shop that repairs mobile phones and sells components. Its owner Saroj said that business is down by 80 percent since the economic flow is not there.

“Before we used to get around Nu 4,000 to Nu 5,000 per day but these days it is Nu 250 and Nu 400. My customers were both locals and tourists,” said Saroj.

He said his business has been impacted by large numbers of young people leaving for Australia as they don’t see customers these days and they are only a few in number.

At the same time, he also feels that if there are more tourists then his business will also improve as directly or indirectly everyone is dependent on tourism in Paro town.

He said that only local restaurants near workshops etc and top rated hotels have business.

“We in the town are having lots of problems. One of my friends closed his grocery shop since he said there are not enough customers,” said Saroj.

He said that even when tourist guides come here and he asks them if they are new, then they say there are mainly from the old reservations or old rate.

Handicrafts

Handicraft shop Tashi Wangmo owned by Tashi Wangmo said that business is down by 60 percent.

“Tourists are coming but they cannot stay for long and buy things due to the higher charges and also entry frees at various locations,” said Tashi.

Tashi has not paid rent for two months and she has not paid her loans too. She said she is surviving on past savings, but after a year or two she does not know how she will eat.

She said there are around 63 handicraft outlets in Paro and none of them are doing well.

She said the businesses should be given at least five years to recover after the pandemic.

She said that the landlords are increasing the rent.

A sales staff at another handicraft shop, Bhutan Made, Pema said that there has been a drop of 50 to 60 percent in sales compared to 2019. She said that there are tourists but they are mostly regional tourists.

Hotels

Phurpa Wangmo from Paro who worked in the hotel sector until recently said the hotels in Paro are in a survival mode with mainly local Bhutanese tourists.

“They sell rooms at a loss and some food and drinks just to survive. They cannot save. In March there should be a lot of guests but it is not happening,” she said.

Phurpa said that she met a foreign tourist who said she cannot shop due to the higher charges for her and that tourist had gone to the Punakha Tsechu but found only a few tourists.

Phurpa said that if things do not improve then not much guests are likely to come for Paro Tsechu in the first week of April.

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