The Bhutanese Leading the way.
Minimum Daily Package Rate will be liberalized in the future but it is too early for now said TCB DG
According to the Director General of Tourism Council of Bhutan Dorji Dhradhul, TCB is totally against the proposal of one-time visa or SDF fee proposed in the Draft 21st century Economic Roadmap.
The draft report proposes an introduction of one-time visa or sustainable development fee of USD 325 per tourist per visit for two weeks stay and additional USD 30 per night thereafter.
He said that they have proposed that in a way to do away with the Minimum Daily Package Rate (MDPR).
“They want to merge visa fee and SDF and make it one lump sum which means for a maximum of fourteen days they are proposing USD 325 and on the fifteen day they want to add USD 30 per day which is in direct conflict with our policy or vision because currently for SDF only the tourist have to pay USD 65 per day and when we divide USD 325 by fourteen day it comes to USD 23 per day. These two fees are different and even other countries have these two different fees,” he said.
He said, “We are thinking of increasing this USD 65 because this USD 65 has been there for the last 10 years and it is high time we increase and we are discussing this in the tourism sector to increase this from 65 to may be USD 95 or USD 100 but we don’t know how much it will be.”
He stated that their theory is that whether the tourist stays one day or fourteen days they just have to pay USD 325. “If all tourists pay USD 325 for three days the country is gaining. You divide 325 by three days then it is going to be like almost USD 100 per day which is higher but I don’t think a tourist will pay USD 325 and stay for three days, as they will try to make maximum use,” he said.
TCB doesn’t want to merge these fees together because currently Bhutan is becoming the most sought after destination and one is mainly because of this SDF.
“We are the only country in the world that levies so called tax (SDF) to protect our country. That is a unique selling proposition and that makes Bhutan a unique destination. So if we merge this we are totally dismantling this unique selling proposition. This SDF is more than revenue, it is image that we are getting,” he said.
He said that the MDPR will naturally get liberalized in future, but for now it is too early for the country to do away with it.
“For example if we go to Switzerland we don’t have to pay MDPR. There are no budget hotels or cheap hotels but their minimum living standard is so high and we cannot afford to go there. However, once our country gets developed in future, we have to follow this once all our minimum hotels turns into tourist standard, but that will happen in the long run and it is too early at the moment,” he said.
He added, “We are following this strong principle where ‘Less is more’. We can get more by getting less numbers and how we can do this is through our policy of high value low volume. For example, we get ten tourists with each spending USD 100 so it comes to USD 1000 but you get five tourists and each of them spends USD 1000 each then just see the difference. With less numbers you are going to get more so this is what we are going to pursue from this policy.”
According to an Association of Bhutanese Tour Operators (ABTO) member those who are supporting this proposal is to increase the number of tourists and to encourage tourists to stay longer.
He said price is one aspect in tourism but there are lots of aspect in tourism for example standards, quality, new products, new sites to visit and the capacity of guide of the service providers and marketing and promotion so the industry wants the government to look into those aspects.
Chairman of Hotel and Restaurant Association of Bhutan Sonam Wangchuk said that for the hotel industry in the country, they think it is a good move because the deliberation of moving away with the MDPR has been there for quite sometimes but it was always sidelined saying that the country is not ready.
“We were wondering when will actually be the right time for us to look at it and now that the Economic Roadmap committee has also put forward this changes the hotel industry in general feels that this will definitely come as an advantage because if the tourists stays for longer nights we will have an advantage since everything goes up for hotels, guides, transports and tour operators,” he said, adding that this is in a way a good move to look at having a better yield from the tourist that are arriving in the country.
He said, “If we can look at it and market this very promptly, USD 325 for two weeks might be attractive and then we will be able to keep the guest for longer duration in the country and it will then simultaneously benefit the other sectors.”
He added that there will be challenges, uncertainties and discomfort but in this modern world it is all about going and thinking out of the box and shift from the comfort zone whereby they learn new things and take every challenge as an opportunity to bounce back.
Anand Gurung, a tour operator said, “The system we have currently is good but the one-time visa fee advantage is that tourist stays for four to five nights and if they stay for longer they have to pay per person per day for everything and it counts for them and it is very expensive for them and that is why they are not staying for longer days, so when it is onetime fee it will encourage people to stay longer.”
He said that it will also help in exploring the other parts of the country if it is a onetime fee.
“When tourists stay for longer days there will be more business activities and when there are more business activities there will more job opportunities,” he said.
Another tour operator on the condition of anonymity said that the committee that proposed doing away with MDPR had many members who owned hotels themselves and so there is a certain degree of conflict of interest in this proposal which has not yet been declared.
He said this is a door to mass tourism and the majority of tour operators are not in favour.
