Want to cater to regional tourists without criteria
Non-star-rated hotels in the country are requesting to soften the criteria for certification of hotels in order to ease upgradation. The Hotel and Restaurant Association of Bhutan (HRAB) has appealed to the government to allow non-star hotels to cater to regional tourists, since September this year. There are more than 630 budget hotels in the country. Most of them are on lease.
Vice Chairman of HRAB, Tshewang Jurmey, said that if the tourism policy cannot allow non-star hotels to cater to tourists, the government should soften the criteria for three-star hotel certification.
He said that three-star hotel certification criteria should be in the Bhutanese context rather than implementing an international standard.
Hoteliers claim that major structural changes may not be possible without dismantling the entire hotel and rebuilding it. Non-star hotels also requested to exempt tax and duties for a specified period of time, support upskilling of employees, easy access to finance and support with soft loans, and provide gestation or grace period for hotel EMI repayment for those who wish to upgrade.
Non-star hotels also requested the government to facilitate alternate business opportunities, provide financial support with reinvestment allowance, waiver or extension or interest rate reduction on loans and restructuring of hotel loan repayments with lower interest rates for those forced to exit the hospitality industry.
The Chairman of HRAB, Sonam Maekay Penjor said that as long as quality services are provided, hotels should be allowed to cater to tourists. “Tourists are not coming for better amenities, they come for good services.”
The Chairman said that they have not received any response from the government so far and when they requested for an appointment they were denied.
The Vice Chairman of the HRAB said that they met with minister for economic affairs, Loknath Sharma, yesterday and got some assurance that they would look into the matter.
He said that Lyonpo informed them that the issue would be discussed with the Department of Tourism and forwarded to the cabinet for further discussion.
The Vice Chairman said that the maximum numbers of non-star hotels are non-operational while some hotels even took loans to pay the rent.
Hoteliers claim that non-star hotels get only a handful of local guests in a month. Local guest average occupancy rate in a year is 2 percent.
“We are worried that our properties would be seized by the bank since we have availed huge loans,” a hotelier said.
The erstwhile Tourism Council of Bhutan (TCB) on July 26, this year notified all guests to stay in TCB-certified accommodation which is three-star and above hotels.
In 2019, to cater to the regional tourists, erstwhile TCB started the process of standardising and classifying non-star hotels to Blue poppy I and Blue poppy II category. The TCB then notified non-star hotels in all 20 dzongkhags to upgrade their properties accordingly.
Hoteliers said that many hotels availed huge loans from banks to upgrade their hotels to meet the blue poppy standard as outlined in the guideline.
“Some of these non-star hotels have been functional for over two decades with estimated borrowings of over Nu 20B collectively as loans,” a hotelier said.