Male Iron Rat Year

Covid-19 walloped the tourism sector in 2020

Yangchen C Rinzin

On March 23, 2020, Bhutan, one of the most preferred tourist destinations had only one tourist in the country. Borders were sealed and flights restricted to only rescue operations. The Covid-19 pandemic wreaked havoc and walloped the tourism sector in 2020.

The country’s first Covid-19 case was detected in a tourist. It was a bad omen for the industry and related sectors. After the government banned the entry of tourists, all the tourists left the country. The only tourist left was the partner of the first Covid-19 patient, an American tourist.

The lone tourist left the country in April. The tourism sector has remained closed since and Bhutan today has no tourists in the country for the first time since tourism started in 1974.

The tourism sector, one of the highest contributors to the country’s Gross Domestic Product, was hit the hardest. As per the Budget Report 2020, revenue from the tourism sector declined by 41 percent in 2019-2020 compared with 2018-2019.

Only 28,000 tourists visited Bhutan in 2020 generating a revenue of USD 19 million, against 315,599 tourists in 2019. Tourism sector earned USD 225 million in 2019. It already recorded Nu 2 billion in non-performing loans (NPL) as of March 2020.

Impact

The sector saw more than 50,737 hoteliers, tour operators, guides and homestays affected because of the dependency on tourism for livelihood. Many lost jobs aft or had to opt for other jobs to survive.

Had it not been for Kidu, more than 20,000 individuals who are kidu recipients could have lost the livelihood. However, the government quickly came up with the Economic Contingency Plan. After the approval of Nu 286M, Tourism Council of Bhutan (TCB) designed A Tourism Stimulus Plan to help those affected in the tourism sector and gainfully engaged them.

Staff, drivers, guides, cooks, tour operators, and other hotel staff were engaged in four different infrastructure and product development projects, surveys, studies or services, training and skilling, and waste management.

The year also saw the National Assembly adopt the Tourism Levy and Exemption Bill 2020 and endorsed the sustainable development fee in all 20 dzongkhags. However, before the SDF could be implemented, the pandemic struck.

While it is still uncertain when tourism would reopen, TCB continues to explore ways to keep the sector alive. Although it was proposed to reopen tourism by March 2021, the country was locked down for the second time on December 19. TCB now hopes to revive tourism and reopen it by June. It might take at least five more years to recover from the pandemic and return tourism to normalcy.

To revive tourism, even if partially, the TCB approved initiatives like the bubble tourism, ultra-high-end tourism.   The Covid-19 pandemic gave the tourism sector time to reflect and re-boost sector. Domestic tourism that has remained silent for ages finally took off and TCB has worked to popularise domestic tourism product such as as- Druk Nyekor or ‘Bhutan pilgrimage.”

It is also working on the equal distribution of tourists in all regions.

The year might not have started well. However, it saw a good end with the government finally approving the long-awaited and first tourism policy.

The government will now have to take measures to promote tourism as a year-round activity, one of the main objective of the policy.

The policy will push the government to spread tourism activities in those regions through the provision of differing incentives and emphasis shifts to balance tourism in all regions.

To avoid mass tourism, the government will manage and regulate by adopting appropriate pricing and other mechanisms like sustainable development fee and a minimum daily package rate, among others.