The Bhutanese Leading the way.
Bhutan has crossed the 200,000 tourist mark in 2025, according to the latest figures with 209,376 tourists. This is an increase of around 60,000 tourists compared to 145,065 visitors recorded in 2024. However, hoteliers say the rise in tourist numbers has not translated into improved business for the hotel industry.
Most hoteliers stated that the increase in numbers had not affected the hotel industry significantly, and that there were thousands of hotels across the country.
A hotelier said that although tourist numbers has increased, the impact on the hotel industry had been limited. While the government might be satisfied with the numbers approaching its targets, the hotelier said that the composition of tourists also needed to be taken into consideration, particularly how many were regional visitors and how many were international.
The hotelier added that although efforts to promote high value, low volume tourism were appreciated, the hotel industry continues to struggle.
Another hotelier in Babesa said that despite the official figures showing 200,000 visitors, there had been no noticeable change on the ground. The hotelier said that the hotel had been struggling to attract even three to four guests a month. With 26 rooms, the hotelier said the occupancy rate only occasionally reached 50 percent, while most of the time it remained between 10 and 15 percent. The hotelier said that 80 to 90 percent of the time the rooms were empty, and said that room rates had been reduced due to fewer visitors and increased competition from a growing number of hotels.
Another hotelier said that hotels were being forced to negotiate prices with Indian tour operators to secure even small groups of visitors. The hotelier said that price negotiations were necessary to attract even limited numbers of guests. While expressing hope that March might bring more visitors, the hotelier said it would likely remain more or less the same. The hotelier added that there had been optimism following the presentation of the Review Report by the Economic and Finance Committee during the Winter Session of Parliament, but that no changes had been observed so far.
The EFC review report on tourism, presented to Parliament, included recommendations across several areas, starting with legislative reforms. The Committee recommended reviewing the Tourism Levy Act 2022 to make it more comprehensive by defining institutional roles, pricing instruments, licensing processes, regional development guidelines, and governance and accountability mechanisms. The Tourism Rules and Regulations 2024 would serve as a transitional framework until a new Act is enacted.
The Committee also proposed establishing a flexible and adaptive Sustainable Development Fee (SDF) framework, including group discounts, long-stay incentives, and seasonal concessions targeted at central and eastern regions. It recommended amending the Tourism Levy Act 2022 to reflect the current USD 100 SDF rate or replacing it with a Tourism Act that delegates SDF rate-setting authority to the Rules and Regulations.
To boost economic activity in border towns, the Committee recommended replacing the current 24-hour SDF waiver with a 72-hour waiver for designated border areas. According to the Committee, this would allow tourists more time to stay and spend in local hotels and restaurants while maintaining movement controls beyond the designated zones.
Strengthening tourism governance was another key recommendation, including the establishment of a single, empowered Tourism Authority responsible for policymaking, tourism development, licensing, SDF management, and payment systems. The Committee also called for a one-window digital platform integrating visa processing, SDF payment, booking verification, safety monitoring, and operator services.
On airfare, Gangzur-Minjey MP Loday Tsheten said the Committee found that airfare was high and airline traffic in Bagdogra had increased by 72 percent. He added that the Committee also found that 60 percent of travelers using Tashi Airlines were from the rest of the world, and not only from Bhutan and India. The Committee recommended reviewing the three-tier airfare policy and exploring a uniform fare irrespective of nationality, aligned with regional benchmarks.
The Committee further recommended diversifying tourism products through initiatives such as culinary tourism, textile and craft circuits, agro-tourism, wellness retreats, trekking revival, and low-season MICE events. It also proposed strengthening participation by artisans, homestays, and community-based tourism.
For hotels, the Committee said immediate action is crucial. Recommendations included low-interest soft loans with deferred repayment, resumption of government meetings and conferences to support demand, and operational grants for renovations, hygiene, and eco-certifications. It also proposed ESP-funded niche marketing, MICE promotion, and bulk-booking incentives, along with exploring additional measures to address low occupancy in three-star and below hotels.
The Association of Bhutanese Tour Operators (ABTO) said that while tourist numbers have increased, the benefits from the increase remain unclear. ABTO said the number of days tourists spend in Bhutan has declined and the number of international visitors remains more or less the same. According to ABTO, profit margins for tour operators have been decreasing every year compared to the period before. Longer duration stays have also declined significantly.
ABTO further said that trekking and nature-based tourism, which was a newer product and expected to grow, has not picked up as anticipated. Despite Bhutan being known as an eco-friendly and nature-focused destination, ABTO said the high cost has limited demand for nature-related trips.
