PM agrees to look into doing away with requirement for tourists to stay in 3 star plus hotels provided standards are improved

Members of Bhutan Chamber for Commerce and Industry (BCCI) met the Prime Minister Dasho Dr Lotay Tshering to discuss the way forward and problems and troubles currently faced by the private sector as the economy is not doing well after the pandemic.

The biggest agenda for discussion was on the impact faced by the Hotel and Restaurant Association of Bhutan (HRAB), especially the impact on budget hotels. The Prime Minister acknowledged that private sector especially the hotel sector was impacted the most by the new policies.

He stated that the government will work on it, but will not do away with the SDF of USD 200. “We must move progressively, not backwards. The New policy must be given enough attention before we call it a failure.”

 The Prime Minister shared that, with the Department of Tourism (DoT), they will work on it and will do away with the word Budget hotel. With no segregation of tourists now, he stated that the word ‘Budget Hotel’ should be eliminated.

He offered the hotel sector three choices; budget hotels that wish for upgradation will be given full support, those who don’t wish to upgrade has the choice to convert it into offices, apartments and bachelors’ quarters, and for those wishing to sell the hotel will be bought.

To solve the problem, Prime Minister promised to do away with the policy mandating for the tourists to stay at 3 stars and above rated hotels by the DoT, however, he also advised the hoteliers to improve the standards and services.

“We can look into revising the standards of hotels, however, we cannot mandate tourists to stay at a particular hotel. Our tourism is a packaged tour with guided tourism and these tourists needs to be assured a good stay here as they will become our spokesperson when they reach their home country. Therefore, we will need to give them good services, however, we can give them the choice to stay at a hotel of their choice.”

Similar to the issues of hoteliers, Dasho Ugyen Tsechup in attendance raised points regarding issues of loan repayment and non-performing loan (NPL) issues. He stated that as and when the loan deferment period is over, the hoteliers will have a hard time repaying their equated monthly installments (EMI). He also shared that NPL will compound issues as we go on.

He raised issues on the cooling period of 6 months, the clause which states that if a business partner or a shareholder goes into NPL, the business partners or other connected legal entities are deprived of availing loans from financial institutions.

With regards to the issues of loans and NPL, the Prime Minister shared that Royal Monetary Authority has its own reasons for inculcating such practices. However, the Prime Minister agreed for a meeting with the Governor and BCCI graced with his presence.

Other issues raised also included the cooling period for foreign workers which required them to go out for 6 months after working here for three years, the Prime Minister promised to consider it.

Property Valuation was also mentioned in which the Prime Minister mentioned requesting the financial institutions to give loans on a 1:1 ratio. Currently, the loans to valuation ratio is 70% of the collateral. He also added that BoB has increased the property valuation and is already exercising it.

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