Lhakpa Quendren | Gelephu
In the aftermath of the pandemic, hoteliers in Gelephu are concerned about the sustainability of their business as hotels struggle with low occupancy.
Chairman of Hotel, Restaurant, and Bar Association of Gelephu, Thinley Jamtsho, said that at least six hotel owners sold their businesses while four hotels were surrendered to their landlords.
“They sold the hotels at a loss without even recovering half of their investment. Another owner has been looking for buyers. The owner could not pay the rent for the past four months,” he said.
Of the four surrendered hotels, he said, two are run by the landlords themselves while the other two remain unoccupied. “The two landlords are unable to pay the monthly loan of Nu 150,000 for the past six months.”
He said that the two newly-constructed hotels are facing problems with renting out their structures.
Some hoteliers have quit their business for lack of customers while more are on the verge of closing. Those remaining are left with a host of challenges.
While the reasons are many for poor business, hoteliers attribute their deteriorating condition to the new sustainable development fund (SDF) and restrictions of entry and exit points in Gelephu.
“The closure of hotels is a sign of tough times we are in,” said Phurpa Lhamo, the owner of Lhaazaay Suites. She fears she will have to close the hotel soon after eight years of business.
She said that budget hotels that used to be fully booked are now hardly getting visitors. “Majority of our customers used to be regional tourists. In February, there were no visitors.”
“In the past, I had to look for other conference halls due to multiple bookings for conferences and workshops, especially during winter. Now I received only two conferences in the last six months,” she said.
Her hotel is among five hotels in Gelephu that are under a year-long probation period for a 3-star rated hotel following the assessment of tourist standard accommodation by the tourism department.
“I have invested about Nu 350,000 for the procurement and redevelopment works required by the government. I pay Nu 115,000 monthly rent. We are unable to generate sufficient revenue to cover all the expenses,” she said.
Hoteliers also claim that many regional tourists after the relaxation had enquired about traveling to Bhutan through Gelephu given the government’s plan to allow entry and exit of regional tourists through the border towns.
“There were many tourists who canceled their scheduled visits to Bhutan through Gelephu due to the restrictions of entry and exit points in Gelephu,” said a hotelier.
Sangay Penjor, who runs hotel 8 Jorden, said that budget tourists are still hesitant to travel to Bhutan. “Wealthy tourists are staying in upscale facilities. But it is expensive for budget tourists.”
“Some months ago, I received booking from three regional tourists who wanted to stay in my hotel,” he said, adding that the tourists later dropped their tour plan after learning a mandatory stay in hotels rated three stars or above in the country.
Hotel Kuku Grand’s Chief Executive Officer, Pema Lama, said that the hotel receives most complaints related to the lengthy formalities at the border gate.
“Their half-day is wasted at the gate. Many tourists call us from the gate and say they were going back because some tourists do not like such a hassle,” he said.
As most regional tourists come for family tours, he said, many cannot afford to stay in Bhutan. “We have to depend mostly on the regional tourists. But they come just for lunch and then go back.”
For government events, a standard rate was set for the hotels registered with the Department of National Properties which hoteliers said was low. Hotels charge Nu 600 for three meals and two-times tea, and Nu 700 per room for accommodation.
Meanwhile, the construction of hotels at the Indian border side had begun to worry the hotel owners in Gelephu.
Hoteliers say more are expected to leave the business over the coming months if timely interventions are not taken. “We know how hard it has been for everyone in the tourism and hospitality businesses ever since the Covid hit,” said another hotelier.