Tourism and hotels

One of the main pleas coming out of the tourism conference is from the hotel industry asking the TCB to do away with soft regulations to control the large numbers of regional tourists coming to Bhutan.

They say that this does not allow them to fill their hotel rooms and that these regulations are the problem and not the increase in the number of hotels.

This plea was also supported by some tour operators.

However, the truth is more complex, as the above demands from the hotels and sections of the tour industry show that Bhutan could head the way of mass tourism.

In 2013 hotels represented only the fifth biggest loan component but in 2018 they are a close second showing dramatic growth in five years.

It is also no coincidence that regional tourism numbers increased dramatically from 2013 onwards growing exponentially to the extent that while there were 16,418 regional tourists in 2011 it jumped to 202,290 regional tourists in 2018.

A lot of the new hotel constructions came into being by counting on this huge growth rate to increase forever.

This was further buoyed on by numerous fiscal incentives and tax breaks, which people saw as an opportunity.

However, hotels now risk becoming the mill stone around the neck of the tourism sector with huge overcapacity and huge capital investments but without the expected returns.

If this trend continues then it also poses risks to the financial sector, given the huge exposure  to this sector.

It is clear that the government and other stakeholders should do a study and find out if Bhutan is building too many hotels, and that too at places where there is already a saturation.

The hotel sector, in a dangerous cycle, is now also becoming a lobby for opening Bhutan to more mass regional tourism.

Bhutan, whatever the reasons, cannot give up its high value and low impact brand of tourism not only for the sake of sustainable tourism but also for the sake of the nation at large.

Walking is a virtue, tourism is a deadly sin.
Bruce Chatwin

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