Bhutan misses tourists after Himalayan kingdom levies high visitor fees

A Drukair flight from Kathmandu with 23 international passengers on board landed at Paro airport on September 23 as Bhutan reopened its borders to tourists 30 months after the COVID-19 pandemic. The reopening was accompanied by a revised tourist levy, known as the Sustainable Development Levy (SDF), a tourist levy of $15 (Rs 1,200) per day per person from India, Bangladesh and Maldives and $200 (Rs 16,000) per person per day for other nationalities.

Previously, tourists from India, Bangladesh and the Maldives had free entry while for other foreign nationals it was a fee of $65 per day which accrued as a fee to the Bhutanese government. The new tax levied marks the end of a decade of free entry for Indian tourists visiting Bhutan.

In Jaigaon, India’s border town with Bhutan, Pritam Gazmer, a tour operator and president of the Northeast Himalayan Tour Operators Association (NEHATO), has mixed feelings about opening the door from Bhutan, a busy entry point to the Himalayan kingdom.

“I am happy that Bhutan is finally open for tourism after a long wait of over 2.5 years, but the heavy SDF has left tour operators like us dry as there are very few bookings so far,” did he declare. Gazmer, which has been sending Indian tourists to Bhutan for 18 years, and has no reservations for this “Puja season”, a time of year when many Indian tourists are said to be traveling to Bhutan, mainly from West Bengal, Gujarat and Maharashtra. “Tourists call us for investigation but withdraw or divert their travel plan to other neighboring countries after learning about the new SDF levied on tourists,” Gazmer said.

What are the fees?

Besides the Rs 1,200 per day per person for Indian tourists and $200 for foreign nationals MSDS also includes a mandatory tour guide which can go up to Rs 1,000 or may vary depending on the service provider for a day and visitors can only stay in the listed hotels and B&Bs by the Tourism Board of Bhutan (TCB).

Most of these hotels are 3 star or above.

“The new tourism rule has also introduced a fee of Rs 4,500 per day for foreign tourist taxis where the taxi driver will also be charged Rs 1,200 per day,” said Pasang Lama, chairman of the taxi drivers association. Jaigaon taxi, an association that has more than 50 drivers as members who transport tourists from Jaigaon to various parts of Bhutan.

The country also has revised registration fees to popular monasteries and dzongs, following a meeting of the National Monuments Committee held in July. For example, entering the breathtaking Taktsang, also known as Tiger’s Nest Monastery, may require Rs 2,000 or $25. According to the TCB website, there is a 50% discount for children under 18 and children under five are exempt from entrance fees. Compulsory travel insurance is another new addition that a visitor will need to take out when visiting Bhutan. Indians have the option of choosing any domestic travel insurance at their point of entry.

Visiting Taktsang, also known as Tiger’s Nest Monastery, will now be an expensive affair for Indians. Image courtesy of Bhutan Tourism Board

In July, the National Assembly of Bhutan adopted the Tourism Tax Bill 2022 the introduction of the long-awaited Sustainable Development Charge.

“The fees are intended to fund the public treasury and are also allocated to various projects that will improve facilities, services and infrastructure for nationals and guests visiting Bhutan, as well as funding healthcare and education. free,” said Dorji Dhradhul, managing director of TCB. .

Meanwhile, according to industry experts, the SDF model is also being touted to boost the pandemic-hit country’s tourism industry which has suffered a major loss due to the COVID-19 lockdown. Tourism is one of the main economic drivers in Bhutan. Before Covid hit the world, tourism sales in Bhutan were worth $120.00 billion, or 4.7% of gross national product. Thus, each visitor spent an average of $380 while vacationing in Bhutan. But the pandemic has changed the tourism scenario. In 2020, there was only $84.00 trillion left, a decrease of 30%.

High value, low volume

Apparently, TCB is aiming for a “high value, low volume” tourism model. But will it work for Bhutan where the main visitors are middle-class Indians? Of the 29,812 tourist arrivals to Bhutan in 2020, no less than 22,298 were from India. The levy of the new charges will turn away a large number of Indian travellers, an Indian tourism expert has said. However, according to TCB’s Dhradhul, SDF is not a new concept for tourism in Bhutan. The tourism industry in Bhutan was founded on the principle of “high value, low volume” and the SDF was introduced after the start of tourism business in the country in 1974.

Bhutan misses tourists after Himalayan kingdom levies high visitor fees

Exploring the mysteries of Bhutan will now be an expensive affair for Indian tourists. Image courtesy of Bhutan Tourism Board

Other tourist taxes

Bhutan has the highest tourist tax in the world. Popular Southeast Asian tourist destination Thailand also plans to levy a tourist tax ‘Kha Yeap Pan Din,’ a 300 baht ($8) tax that will be levied on foreign tourists. Apparently, if the Thai cabinet approves it in October, the collection will start from next year.

In 2015, France started collecting tourists tourist tax , a tourist or tourist tax payable by adult visitors to France. Each local municipality being responsible for setting the tourist tax, the amounts may therefore vary according to the category of accommodation. However, the rates vary between €0.20 and €4.20 per person per night.

Bhutan misses tourists after Himalayan kingdom levies high visitor fees

Happy student monks in Bhutan. Image courtesy of Bhutan Tourism Board

A budget hotel owner from Chukha said on condition of anonymity and expressed concern about the situation of low and mid-range hotel owners in Bhutan after TCB announced that all tourists visiting the country should stay in 3 star hotels or more.

“Most of us currently have no reservations for this fall or the coming year 2023. We hope the situation will slowly improve once the government accredits the country’s budget hotels,” said the hotel owner.

Across the border in Siliguri, Raju Chhetri, a tour operator, expressed similar concern while discussing the impact of the new model on Indian players. “The Bhutanese government has restricted the functions of Indian and Bhutanese tour operators by allowing tourists to book their tours independently, which may benefit customers, but tour operators will suffer a major backlash,” Chhetri said.

Bhutan misses tourists after Himalayan kingdom levies high visitor fees

Women enjoying a moment of joy in Bhutan. Image courtesy of Bhutan Tourism Board

Bhutan has always been a once in a lifetime destination. The landlocked country of spectacular scenery that offers its visitors a vista of snow-capped mountains, ornate monasteries, deeply traditional Buddhist culture and clean air to breathe will now need deeper pockets with the levy of the new SDF, but the country is always worth visiting.

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