Finance Minister Namgay Tshering

SDF earnings zoom up since tourism reopening

In the Parliament session, the Finance Minister shared that the country has generated USD 16 mn in the past 8 months since the reopening from 52,000 tourists, with about 32,500 Indian tourists paying INR 1,200 and about 19,000 dollar paying tourists with a little over half of them paying under the new SDF.

However, from the latest figures given by the DoT, as of 26 June, the number of tourist arrival since the reopening is 71,951 people in total. From the total, 49,714 were Indians, and the rest 22,237 were dollar paying tourists.

This means that since the reopening of tourism from 23 September 2022, Bhutan seems to have earned roughly around USD 18 million (mn) in terms of Sustainable Development Fund (SDF). The calculation was done by the reporter with the figures of tourist arrival from Department of Tourism (DoT) using a recommended length of 5 days suggested by DoT.

From the 22,237 dollar paying tourists, those who paid the SDF USD 200 were 11,913 people with 10,324 paying the old SDF rate of USD 65.

From 49,714 Indian tourists paying INR 1,200, Bhutan earned roughly around USD 3.6 mn.

From the dollar paying tourists, the SDF amounts to roughly USD 11.9 mn.

For those who came to Bhutan paying the old SDF amounts to roughly USD 3.3 mn.

In total, the SDF earnings roughly amount to USD 18.8 mn from the number of tourists who arrived in the country.

Comparing it to the figures of the past, before the pandemic, in 2019, the SDF earnings amounted to USD 23.42 mn, and in 2018 it was USD 22.63 mn.

This means, since the reopening of the tourism, roughly around 9 months, the country has been able to earn about 80 percent of the earnings achieved in 2019 and about 83 percent of the earnings made in 2018.

In 2019, the number of tourists visiting the country peaked at around 315,599 people, and in 2018, the tourist arrival was at 274,097.

Comparing the numbers to 2019, we have only had about 22.7 percent of tourists coming to Bhutan in the past 9 months.

The new SDF rate was instituted as part of the new reforms. The tourism reform arose from the concern that Bhutan’s ‘High Value and Low Volume’ tourism is not able to provide the high value due to massive undercutting, an inflexible Minimum Daily Package Rate system that limits potential, and does not provide the jobs for the youth where they can make good living, and the available benefits which are not widely shared.

Although it seems tourism is doing well, in terms of SDF earnings, the business affected are still not doing well.

The Chairperson of the Hotel and Restaurant Association of Bhutan (HRAB), Jigme, said that he is hoping for the business to pick up.

Jigme said, “Tourist numbers are on an upward trend since its reopening however, it is not close to what the numbers were pre-Covid (2019). As such, there are not enough tourists for the supply of service providers that are in the country. Hopefully, the new incentives will help in increasing the numbers. We need to continue marketing and making relevant changes to Bhutan into one of the premiere destinations.”

He further said as our market is quite small, a small number of tourists cannot cater to all retailers and businesses that all depends on tourists to earn a living starting from small businesses, like handicrafts to big businesses like hotels.

Although the SDF earnings are quite high, it goes without saying that retailers and businesses will still be affected with low arrivals of tourists.

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