The Bhutanese Leading the way.
1.5 bn approved by cabinet for the Tourism Flagship program
Until recently, the Tourism Council of Bhutan (TCB) aimed to get in 500,000 tourists by 2023 as part of the tourism flagship program. This is up from the 274,097 tourists that came into Bhutan in 2018.
However, the TCB, after looking at the ground realities and feedback from from various sectors has decided to significantly decrease that target to 350,000 to 400,000.
Apart from decreasing the total numbers target, TCB in line with Bhutan’s ‘High Value and Low Impact,’ tourism policy will also aim to ensure that more high end tourists come to Bhutan.
The DG of the TCB Dorji Dhradhul said that currently around 30 percent of the tourists are high end and 70 percent of the tourists are low end. He said that this needs to be reversed by 2023 whereby even with increased numbers 70 percent are high end.
The TCB rethink is prompted by the uncontrolled and tremendous growth of regional tourists coming to Bhutan, which is having a host of negative impacts on Bhutan and its tourism brand.
The DG clarified that the move is not against regional tourists per say, but against the lower end ones.
He said that both international third country tourists and higher end regional tourists come in by air.
The DG said that the TCB would take step by step regulatory and promotion measures to encourage higher end tourists and discourage low end regional tourists.
He said that of the 274,097 tourists in 2018 only 71,807 were tariff paying tourists and one aim is to increase this number anywhere from 100,000 to 150,000 tourists by 2023.
He said that would be made possible by various marketing measures internationally to attract these tourists.
In terms of controlling the low-end mass regional tourists the DG said that they would be encouraged to come through tour operators, use local guides and apply for e-permits.
Domestically, the DG said that the TCB currently only gives star rating for three star hotels and above but now they would also focus on giving rating to the budget hotels so that they improve their standards and with it the rates.
The DG said that currently three star hotels charge around Nu 5000 to 6000 a night while hotels below that charge much lesser.
He said that budget hotels being rated would improve their standards and along with the minimum prices would also go up.
The DG, however, clarified that budget hotels that cannot be improved or upgraded would be left as they are.
As per the current rules only three star and above hotels are allowed to keep tourists but the ground reality is that even budget hotels keep tourists.
The DG said that another measure is to continue extending the entry fees for tourist destinations. The TCB will soon be bringing in entry fees for Changangkha Lhakhang in Thimphu and Chimi Lhakhang.
There have been reports of these Lhakhangs being overcrowded to the extent that locals have to compete with regional tourists for space.
The TCB will also look at applying existing domestic laws on regional tourists. One such law is the fact that Bhutanese have to pay a five percent green tax while importing or buying vehicles. The DG said that while not stopping any regional vehicles coming into Bhutan some green tax levy can be put on regional cars entering Bhutan.
One move that the TCB is already in the process of implementing, which will benefit existing hotels and also curb mass tourism, is to temporarily put a hold on Airbnb. As per this provision only hotels which are three star and above can keep tourists and anyone keeping tourists in Airbnb or apartments will be penalized.
The fourth pay commission report had recommended a Sustainable Development Fee of Nu 500 per regional tourists to raise around Nu 425 mn in annual revenue.
The DG said that it is currently not part of the TCB’s proposals as it is a separate report but the TCB would also have a positive look at it.
The DG said that there have also been ideas to revise to the USD 65 dollar a day SDF fee for third country tourists saying that it has been the same since two decades.
The DG, however, said that it was already revised during the first elected government’s time.
The DG said that the TCB will have to come up with measures to curb mass low end regional tourism as such mass tourism is having an impact on Bhutan in many ways.
However, the Hotel Industry is not very keen on lowering the numbers given the record number of hotels that have been constructed and are under construction, and the resultant excess supply of rooms and beds leading to lower occupancy rates.
The TCB DG said that while the TCB sympathizes with the hotels, the fact is that tourist numbers have been increasingly dramatically and so the the issue is not the numbers.
The DG said that if the TCB goes by what budget hotels want then they would want Bhutan to be totally opened up to mass tourism.
The DG said that the way out of this is to look at long term sustainability of the tourism industry.
1.5 bn for tourism flagship program
The TCB DG shared that the cabinet has given approval for the Nu 1.5 bn tourism flagship program which not only enhances tourism but also aims to spread it in other Dzongkhags.
Under this project one aspect is the four focal Dzongkhags which will receive special attention to develop tourism products and facilities. These are Lhuntse in the east, Zhemgang in the center, Dagana in the south and Gasa in the north.
Apart from that all Dzongkhags will see one tourism product being developed which could be an annual event like a festival or other products.
To accelerate tourism the flagship program will also look at bringing in the right enabling policies, laws and regulations. There will also be capacity building of the both the government and private sector. An important aspect of the program will also be looking at waste management.
