Tourism in Bhutan began in the 1970s with government-led initiatives and was later privatised in 1991. The “high value, low volume” policy introduced by His Majesty the Fourth Druk Gyalpo and further nurtured by His Majesty The King has effectively shielded the nation from the negative impacts of mass tourism while generating significant revenue. According to the TCB Report 2020/21, Bhutan’s tourism sector earned USD 225.87 million in 2019. This noble policy has established Bhutan as an exclusive tourism destination and was dubbed as one of the best travel destinations in the world. For example, Bhutan was awarded the Travel Destination Award by Voyage Magazine in China on January 31, 2024, and was ranked as the second-best travel destination of 2023 and the best in Asia by Travel Lemming, a prominent online travel resource with over 6 million viewers. Additionally, Lonely Planet named Bhutan the World’s Best Tourist Destination in 2020. However, recent erratic changes in tourism policy post COVID-19 and inadequate public infrastructure at tourist sites have hindered the sector’s growth and its potential socio-economic benefits.

When tourism reopened in 2023 after the pandemic, Bhutan implemented a significant increase in the Sustainable Development Fee (SDF), raising it from USD 65 to USD 250 per day—a 285 percent hike. This sharp rise has substantially deterred tourist arrivals and raises the question: Was the “High Value” policy taken too far? In contrast, neighbouring countries have adopted more flexible approaches. For example, Thailand set a target of 10 million tourists upon reopening and introduced several favourable measures, such as extending the visa-on-arrival duration from 15 to 30 days and waiving visa fees for Chinese and Kazakhstani tourists. These policies not only helped Thailand surpass its tourism targets but also accelerated economic recovery. Additionally, Thailand has expanded its visa-free entry list from 57 to 93 countries, including Bhutan, allowing for a 60-day stay to further boost tourism and economic growth.

Soon after Bhutan’s tourism reopened with the new policy, most tourists who arrived had already planned their trips under the previous SDF rates. Gradually, tourist numbers began to decline once the revised SDF rates took effect. In an attempt to attract visitors, the government introduced various packages, such as the 4+4 and 7+7 schemes. However, since tourists typically plan their vacations months in advance, these packages had little immediate impact. This challenge may have prompted the introduction of incentives for MICE (Meetings, Incentives, Conferences, and Exhibitions) tourism to reinvigorate the struggling tourism sector. In 2023, Bhutan experienced a dramatic 67 percent drop in tourist arrivals compared to 2019, the highest decline among South and Southeast Asian countries dependent on tourism, including Thailand, Singapore, Malaysia, and Nepal (see Figure 1)

The change of tourism tagline from “Bhutan, Happiness is a place” to “Bhutan Believe” marked a significant change in the marketing strategy. This change diverges from a long-standing emphasis on Gross National Happiness (GNH), a noble concept introduced by His Majesty the Fourth Druk Gyalpo in the early 1970s.  GNH has guided national policies and plans since its inception, although scientific measurement of the GNH Index was conducted in 2008 and in the subsequent years through nationwide surveys. GNH has since gained global recognition, exemplified by the UN’s designation of March 20th as International Day of Happiness in 2012. At the recent International Horticulture Exhibition in Chengdu, China, the Bhutanese Garden was honored as the “Garden of Happiness.” Additionally, a high-profile participant at the Bhutan Agrifood Trade and Investment Forum (BATIF) 2024, held from May 15-19, noted, “Invest in Bhutan, Take Away Happiness.” This underscores the global appeal of Bhutan’s happiness concept. Given this, it would be beneficial for Bhutan to incorporate the essence of happiness into its tourism tagline and marketing strategies.

Marketing strategy is crucial for effective tourism promotion and a compelling tourism tagline plays a key role in this. The tagline should be both memorable and easy to understand, capturing the essence of the country and conveying its unique appeal succinctly.  For instance, according to Romeo,in his book published in 2003 The Alternative, How to Build a Just Economy, highlights the case of Bakery van Vessem, a chain of Bakeries in Amsterdam. Few years ago, the company won the title of most sustainable company in the Netherlands and decided to use this achievement in marketing emphasising the word sustainability. However, the customers dropped and upon research it was found that the customers preferred fresh bread. In response, the company shifted its marketing focus to emphasise the freshness of their bread, rather than using the term “sustainability.” This change in marketing strategy helped them quickly regain their customer base, eventually surpassing their previous level of serving 25,000 customers per week.

Public infrastructure, particularly the lavatories, remains poorly maintained despite some improvements. While hotel facilities are well-kept, cleanliness at public sites, such as monuments, falls short of standards. One solution could be to employ a regular janitor, with their salary covered by the fees collected from monument entries. Along the highways, restrooms have been constructed, but almost in all the sites, they often stand-alone without additional facilities. To enhance their utility and create economic opportunities, we could integrate restrooms with other facilities such as convenience stores, roadside market stalls, and gas stations. This approach would not only improve the user experience but also stimulate local economic activity.

Socioeconomic developments in the country have significantly improved in just over a decade, culminating in its graduation from Least Developed Countries in December 2023. However, despite rapid development and increase in national income, the gap between haves and have-nots has not closed proportionately, which is an indication of unequal distribution of income. One can also fairly deduce that the rise in income from tourism has not benefited the rural populace as much as that of urban. For instance, there is a significant rise in revenue from tourism in 2017 compared to that of 2003   whilst the Gini-coefficient remained almost the same indicated by the horizontal line (Refer Figure 2). This is further substantiated by the extent of poverty where it is 17.4 percent in rural areas while it is just 4.7 percent in urban areas as per the Poverty Analysis Report 2022. Further, the majority of the tourists visit urban areas depriving the rural populace of opportunity to equally benefit from the rise in revenue from tourism.

While the tourism industry has been crucial to the nation’s socio-economic development since its inception, the frequent policy changes post Covid-19 have hindered its recovery, resulting in a significant decline in revenue. Tourists typically plan their vacations several months in advance. The substantial changes in policy and the dramatic increase in the SDF have made Bhutan a less predictable destination, likely contributing to a decline in visitor arrivals. Bhutan experienced the highest drop in tourist arrival in 2023 compared to the pre-pandemic level amongst the countries of Thailand, Singapore, Malaysia and Nepal. The introduction of the new tourism tagline, “Bhutan Believe”, has been a big misstep in marketing Bhutan’s tourism. It contrasts sharply with the global recognition of Bhutan’s association with happiness. Additionally, sanitation at tourist sites, especially monuments, requires substantial improvement. Upholding high standards of cleanliness not only justifies the collection of monument fees but also fosters a positive visitor experience. While tourism revenue has significantly contributed to the country’s socioeconomic development, the benefits are not evenly distributed. Most tourists frequent urban areas, where the economic advantages are also concentrated, leaving rural populations with limited gains from the rising revenue.

Contributed byWangchuk, Thimphu

wangchoo@gmail.com