Recent History of Tourism 

In September 1974, Bhutan first opened its door to visitors but only to selected package tour groups. When the first group arrived on 3rd October, the Director of the Department of Tourism personally welcomed the 14 tourists in Phuentsholing. Led by Lars Eric Lindblad, the group comprised eight tourists from the USA, five from Spain and one from Argentina. The group stayed for seven days and came through the Darjeeling travel agency Summit Tours, which had been opened by Canadian-born Father Richard McDonald after his retirement from a teaching career at North Point St. Joseph’s College, Darjeeling.

Bhutan’s Department of Tourism was already well established by then, having been set up under Royal Command on 1 December 1971. Placed under the Ministry of Finance, its mandate was to plan, develop, promote the growth of tourism and also operate the tours. At the time, the Department’s biggest responsibility was managing the three state-owned hotels, namely the Olathang Hotel in Paro and the Mothithang Hotel in Thimphu which were both built in 1974 for the coronation of the Fourth King, and the Kharbandi Hotel near Kharbandi Gompa above Phuentsholing which was then the principal entry point to the country.

The Lhengyel Zhungsthog (Cabinet) had prepared draft rules governing tourism in the country. The spring session of the 36th session of the National Assembly held on 7 June 1972, approved the Tourism Act in anticipation of large numbers of tourist arrivals. 

As vested by the National Assembly, the Ministry of Foreign Affairs shouldered the responsibility of issuing permits to foreign tourists wishing to visit Bhutan.  On 8 May 1973, the Minister of the Foreign Affairs issued a circular informing all the relevant stakeholders of its role. The circular was attached as Appendix A to the main document titled “Provisional rules regarding tourists in Bhutan as laid down by the Lhengyel Zhungtshog.”

The undated two-pager covers topics ranging from method of entry of the tourists to financial resources and the permissible duration of their stay. It discussed restricted and non-restricted areas for tourist visits and laid down the rules of prohibitions. It spelt out the approved conduct for private guests and outlined details of how an Indian employed in Bhutan could invite relatives to visit. 

For example, rule one states that with exception of tourists coming in groups of between six and ten persons, individual tourists will not be allowed to enter Bhutan.  Rule number two requires all tourists to bring hard currency with them and exchange it at the Bank of Bhutan. Rule three states that tourists are not permitted to stay for more than 10 days. Rule four mentions that Indian nationals employed in Bhutan are permitted to invite their relatives to their station, during which time visits to other places may only be made after obtaining a pass from the government.

According to another undated, untitled white paper of 14 pages from the same file, when tourism opened up in 1974, tourists were allowed to visit only four districts, namely Phuentsholing, Samchi, Thimphu and Paro. Samchi was dropped from the list later as it was found not suitable. By 1976, Punakha and Wangduephodrang were added to the list, making a total of five districts opened to tourists. The government also opened the Druk Path, Dagala and Jhomolhari trekking routes for tourism that year. 

The white paper lists the three objectives of the policy as being to generate revenues especially foreign exchange, to play an active part in the socio-economic development of Bhutan, and thirdly to promote Bhutan’s culture, religion and people to the outside world. 


In the first five years (1974-1979), the country welcomed 3,455 tourists and earned US$ 2,066,966. An additional Nu 187,764.71 was generated from hotel and transport services. In its first year of operation, i.e, 1975 to 1976, tourism contributed US$ 420,025 to the state exchequer. The following year saw a dip to US$ 398,368 but the next two years from 1977 to 1979 saw sharp increase to US$ 500,000 and US $ 748,573 respectively. The total expenditure the department booked for the period amounted to Nu 19,165,210, and Nu 3,494,778.59 was declared as net income. 

From the first five years of doing business, the Department realized that it was not easy. In addition to the lack of trained human resources and insufficient hotels, the major setback was the visa. Because only the Royal Bhutan Embassy in Delhi and the Foreign Ministry office in the border town of Phuentsholing were authorised to issue visas, obtaining a visa posed a lot of challenges. Also, the fact that the visas were valid only for ten days did not help. 

But the bigger hurdle was fulfilling the cumbersome requirement of the Government of India’s, “Transit Permit.”  Issued by the Ministry of External Affairs from Delhi this was a pre-requisite for all visitors who entered Bhutan via Bagdora and Jalpaiguri. Because of all these problems, in its third year of tourism the country saw only a small increase in arrivals from 390 to 544. However, in the fourth and fifth year, the numbers jumped up to 934 and 1,300 respectively. 

Bhutan Travel Agency 

To make it easier for the tourist, DoT opened up travel agency offices outside the country. The first Bhutan Travel Agency office was opened in New York in 1980. The office accepted bookings to India and Nepal by entering into arrangements with travel agents in these two countries. It started to promote special tours such as the Yak Safari and engaged in more promotion of its culture and tradition in the United States and other Western countries. 

In 1982, Bhutan Tourism Corporation was created as a division under the DoT to look after its commercial operations. In 1983, the BTC opened one office in Calcutta and the following year set up another office in Delhi. These offices made it more convenient for the tourists to book directly on package tours to Bhutan. The initiative resulted in more tourist arrivals and a higher net yield of revenue as travel agency commissions were eliminated. 

Encouraged, the national tourism office made plans to further increase tourist numbers and also to augment the income.  The 14-page white paper has the details. One such plan was for the Bhutan Travel Agency in New York to join international organisations such as IATA (International Air Transport Association), WATA (World Association of Travel Agencies) and WTO (World Tourism Organisation).

After some research, the office also found that the tourists who visited Bhutan were on “Combined Tours,” i.e, they were visiting several countries in a single tour programme.   The white paper states, “This Department in the future would also like to give attention to tours of Bhutan whereby tourists interested in visiting in Bhutan only are catered to.” As a result of the strategies and various promotion efforts, the next decade (1980 to 1990) saw a jump in the tourist arrivals. By the end of 1990, a total of 20,300 tourists had visited Bhutan.  

…to be continued.

Contributed by 

Tshering Tashi