With TCB mandating all tourists to stay in 3-star hotels or above, budget hotels fear shut down

Dechen Dolkar 

Budget hotels in the country are worried after the Tourism Council of Bhutan (TCB) announced that all tourists visiting the country should stay in 3-star or above rated hotels.

TCB, on July 26,  notified that they will assess and validate hotels  so that tourists will stay in TCB-certified accommodations. There are more than 630 budget hotels in the country, most of them are on lease.

Budget hotels or hotels that offer services at a comparatively cheaper rates had been catering to the ever-increasing regional tourists. These hotels charged between Nu 1,200 and Nu 2,500 per night.

In 2017, the department of cottage and industry asked budget hotels to upgrade. In 2019, TCB did an assessment on standardisation of the budget hotel and asked the owners to upgrade the services. Similarly, in 2021, the Bhutan Standard Bureau (BSB) together with relevant agents came up with a standardisation of the hotels. The budget hotels were categorised as Blue Poppy 1 and Blue Poppy 2.

Many claim that they have invested heavily, after availing loan, to upgrade their hotels. One hoteliers said that they have upgraded their standard three times as per their requirements.

“TCB has not shared the report on assessments carried out in 2019. When asked they said that the report is invalid,” a hotelier said. The hoteliers said that they wanted to upgrade the standard and requirements of the budget hotel. They requested BSB to come up with a standard requirement in 2021.

Another hotelier said that although budget hotels were not used as quarantine facilities, some hotels still paid the rent without any business hoping for regional tourists to come  after the pandemic.

“Some hotels have paid Nu 6M as rent in two years,” he said.

Before the Covid-19 pandemic, there was a proliferation of budget hotels in places like Phuentsholing and Thimphu where building owners even resorted to converting residential buildings to budget hotels resulting in shortage of rental apartments.

When the TCB announced the reopening of tourism in the country, budget hotels, like many others,  prepared to welcoming regional tourists. The hotelier said that some even took loans from the bank and renovated and upgraded the standard last year and this year.

“When we called TCB for the certification of budget hotels, they said that the certification is nullified. When we sought clarification from the TCB assuming that there may be different plans for the budget hotels, TCB officials refused to share the valid reasons,” one of the hoteliers said.


TCB’s Director General (DG), Dorji Dhradhul, said that budget hotels can upgrade to three-star and above if they want to cater to tourists. He said that tourists are allowed to stay in 3-star and above hotels only because TCB wants Bhutan to be a high-end destination.

“If they cannot upgrade to three-star and above, they can cater to domestic tourists and local guests,” the DG said.

The DG said that some of the budget hotels in the country are in very poor condition. 

“The services are pathetic in some of the budget hotels. I feel that even Bhutanese should not be staying in such hotels,” he said. “We are equally concerned of the budget hoteliers, but in the broader interest of the nation the policy has to change,” Dorji Dhradhul said.

Hoteliers said that going by the past record, most of our people (local) don’t stay in hotels. They either stay at guest houses or their relative’s places.

Another hotelier said that it is not possible to upgrade budget hotels to 3-star and above. The structure is already established. If it is possible it would have been upgraded before only.

As per the requirement, 3-star hotels should have independent parking with no shops on the first floor with many other requirements.