Most stakeholders feel a liberalisation of the sector will lead to equitable distribution of benefits

Tourism: Talks on whether tourism should be liberalised or not have come up again.  This time it came up after the National Council’s economic affairs committee held several meetings with various tourism agencies last month.

Economic affairs committee’s chairman, Pema Tenzin, said tourism could contribute to employment generation, economy and towards poverty elimination.  However, unlike in other countries, tourism doesn’t benefit local communities in Bhutan, while hotels and guides bear the brunt of the seasonality issue.

According to the committee, a good tourism policy and a master plan was necessary to address these issues in the tourism sector.  

 “We’re looking at maximising the policy and not necessarily liberalisation,” Pema Tenzin said. “Considering the current economic situation, the government should concentrate on the tourism sector as it’s a potential sector.”

Pema Tenzin said there were a host of issues that need to be addressed.  For instance, he said, currently only Thimphu, Bumthang and Paro were districts that derived the most of tourism, while the airlines business was not doing well despite the increase in tourist arrivals. “It’s also a concern that Bhutan is just promoted as a cultural destination,” he said.

The National Council is also looking at ways to tap regional tourism by standardising their service so that their experience becomes more educated and avail services of guides.

Resonating National Council’s concerns, hoteliers and guides said that, under the existing system, it was tour operators, who make all the decisions and take the largest slice of the daily tariff pie.  This is cited as the main cause for the disproportionate power and income within the industry.

Most feel that there should be a change in the existing high value, low volume policy, by doing away with the minimum daily tariff of USD 200 and 250 for the lean and peak seasons.  The royalty, they suggest, should be more flexible, so that it can be increased during the peak season and decreased during the lean season.

Others feel that if tourism benefits were to trickle down to the grassroots, there was a need in structural change.  Today, tour operators decide where guests stay, what they do, eat or visit. “It’s a lopsided structure, which needs to be looked into,” one of the hoteliers said.

Hoteliers and guides said profit from tourism is not being distributed within the industry, as tour operators want the lowest price for transportation, hotel, and guides.

Guide Association of Bhutan’s chairman Garab Dorji, who is also a tourism consultant, said for the industry to grow and generate the benefits it was supposed to, liberalisation was must. “This would solve all the existing issues and lead to more competition through which services will improve,” he said.

Although all tourists pay the minimum dollar rate of USD 250, Garab Dorji said services each tourist avail differ. “The conditions today aren’t conducive enough for what tourists pay to visit Bhutan,” he said. “Tour operators aren’t serious and tourists often complain about the poor services and poor food quality.”

Garab Dorji said today all tour operators want to do is to maximise profit. “With the kind of services we provide for USD 250, we need to question ourselves whether we’re really a high-end destination,” Garab Dorji said. “By liberalising, we should increase the royalty to stop backpacker tourists.”

While the government couldn’t monitor undercutting, the poor taxation system further aggravated the issue, which is why Garab Dorji strongly feels that it’s time the tourism policy be liberalised.

Hotel and Restaurant Association of Bhutan’s president Thinley Palden Dorji also feels that it was time for a change in the tourism policy, which should be discussed and analysed well.

Thinley Palden Dorji said the current policy worked well in the past, but not anymore.  “The infrastructure has increased to accommodate more tourists, but the flow of tourists isn’t equivalent to the infrastructure built,” he said. “The past 14 months saw an increase in the number of rooms by about 60 percent in Thimphu alone. Some modification in the policy has to be implemented.”

However, tour operators feel that the high value, low volume policy was developed considering the future generations.  If the policy is reverted, they said the whole industry would be in doldrums.

“The industry is in dire need of a vision and strategy,” a tour operator said. “Everyone thinks that tour operators make the most out of tourism business, while in reality they bite more than they can chew.”

Tour operators said the need of the hour was addressing sustainable tourism by providing directions to the industry through a master plan. “We should support the existing policy in the interest of the country,” one said.

Tourism Council of Bhutan officials were not available for comment.

Since tourism activities were privatised in the ‘90s, tourism business started with 15 government-trained guides, 33 operators, one handicraft shop, and two government-owned hotels.  Today there are over 2,300 guides, 1,600 tour operators and 123 hotels in the country.

The council’s economic affairs committee will present its findings to the house next week at the on-going Parliament session.

Kinga Dema