A (baa)ad Sheep for the tourism sector

The debate on the tariff liberalization was the highlight of the year

Yearender/Tourism: Spring in Bhutan, characteristic of peak tourist arrivals, did not favour the tourism industry since the beginning of the Wood Female Sheep year.

The Paro tshechu, one of the highlights of the peak season in spring, failed to draw the international flock as it did in the past. Similarly, autumn was no better for the industry that continued to witness a further drop in international arrivals.

While the Tourism Council of Bhutan (TCB) has taken unusually long to reveal last year’s arrivals figure, the industry believes that arrivals recorded about a 12 percent drop in international arrivals.

This is not a good sign for a country where tourism is the second revenue earner after hydropower.

Tourists are finding newer grazing grounds in countries like Myanmar and Sri Lanka and that contributed to drop in arrivals besides the increasing number of Bhutanese tour operators and more competition.

Regional tourist arrivals continued to increase last year. In just about eight months last year, with 66,832 regional tourists, it was an increase of 77.25 percent against the same period last year.

Visitors from India, Maldives and Bangladesh are known as regional tourists. Unlike international tourists, they are exempt from paying the mandatory daily tariff of USD 250 and USD 200 for the peak and lean seasons.

The drastic increase in the arrivals pushed tourism stakeholders bleating for a policy to govern regional tourists. They also raised the issue with the government expressing the need for a proper strategy on management and maximizing benefits from regional tourists.

This, however, did not go well with the budget hoteliers where a majority of the regional tourists put up. For budget hoteliers that mainly cater to regional tourists, the increase in arrivals was much desired.

To further add to the agony of the tour operators, a debate among stakeholders ensued following the National Council’s recommendations on tariff liberalization. It left the industry divided.

The Council during its 16th session in November resolved to recommend the government to reform the “archaic tourism pricing mechanism by moving from the fixed minimum daily tariff system to a more transparent pricing system that provides tourists greater value for money and discourages the malpractice of undercutting and improves higher value tourism.”

This recommendation entails retaining or even increasing the royalty component (sustainable tourism fee) and requiring tourists to be routed through local tour operators and using local tour guides.

Just around that time, the draft Economic Development Policy (EDP) came as another blow to the industry, particularly the tour operators.

Terming Bhutan as an exclusive tourist destination, the draft EDP states that tourists will no longer be required to come through a travel agency. Instead tourists are required to pay a sustainable development fee (royalty) and show the confirmations of guide, vehicle and hotel reservation, airline booking, and travel itinerary before they are issued visas.

As the debate continued, the industry also mourned the death of a 26-year-old guide in November, who jumped in the Mebartsho (lake), Bumthang to rescue a French tourist who slipped and fell in the lake. Prior to that, on October 22, a female Indian tourist died and two suffered injuries in a vehicle accident at Chelela.

There are more than 2,300 guides, 1,600 tour operators and 123 tourist standard hotels in the country as of last year.

Kinga Dema

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