Liberalizing tariff tops tourism issues at Council

The house may vote on endorsing the recommendations next week
Council: The National Council yesterday sought more justifications on the recommendation to liberalize the daily tourism tariff from its Economic Affairs Committee before it endorses the report.
Some of the issues the house mulled over at length were whether Bhutan should drop the daily tourism tariff and leave it to the market forces and what could be the likely consequences of such a move.
The tariff remodelling recommendation is at the core of its Economic Affairs Committee’s yearlong tourism policy review report.
The committee had recommended keeping the royalty portion of the tariff and leaving the rest to be determined by the tour operators.
Trongsa Councillor Tharchen supporting the move said the fixed tariff until now had confined the business in the hands of a few.
He said if the country is to spread tourism benefits to other parts of the country and accomplish quality tourists with maximum revenue, liberalising is the way forward.
“Of the 1,700 tour operators, about 90 percent get only 30 percent of the tourist arrivals, while the rest goes to the top 10 operators,” he said.
He said even the Royal Monetary Authority had proposed to liberalise the tariff.
Despite the chairperson’s repeated calls for brevity and the session stretching beyond normal hours, the members pounded the committee with issues and concerns.
Eminent member Tashi Wangmo asked if it was necessary to liberalise the tariff.
“We should first explore administrative and management measures to solve the problems of undercutting,” she said.
She said one of the advantages of the fixed tariff was that the country could remain as a high-end tourist destination.
“If we leave the tariff determination to the market forces, the danger is that the sector could be solely driven by commercial interests and could encourage mass tourism,” she said.
Members also said that when the daily tariff becomes competitive, tour operators in desperation for business could further undercut.
“How can we ensure that the liberalisation of tariff would not benefit only the select few?” Bumthang Councillor Nima asked.
The committee’s chairperson and Chukha Councillor Pema Tenzin said tourism industry businessmen have been calling him saying they appreciate the committee’s recommendations and sharing their concerns.
“For the past 10 years they have been discussing this issue but nothing came out of it,” Pema Tenzin said.
Committee members said some vested interest groups prevented the proposed changes to the tariff until now.
“The fixed tariff really affects the service industry, which has been until now held at the mercy of the tour operators,” Dasho Tashi Wangyel said.
Committee members said the proposed pricing would not lead to mass tourism and poor quality of tourists.
“When prices become competitive, tour operators will come up with many tourism products from various parts of the country, which would actually benefit areas not touched until now,” Zhemgang Councillor Pema Dakpa said.
Deputy chairperson and Haa Councillor Tshering Dorji proposed increasing the royalty and doing away with peak and lean seasons rates as well.
Members said regional tourists should also be treated the same as international tourists.
“They have to be offered the same standard of services and care, for which a certain charge could be levied,” Bumthang Councillor Nima said. “At present, the tourists are processed in the same immigration office that deals with foreign labourers. This needs to change.”
Gasa Councillor Sangay Khandu proposed that regional tourists’ vehicles should also be levied green tax like the local ones.
Thimphu Councillor Nima Gyaltshen said unregulated regional tourist posed risk to the sustainability of the subsidised fuel.
Members said the regional tourists could not be blamed for the problems arising from lack of policy and proper mechanisms in the country.
“We need to urgently have a policy and other measures so that even our regional tourists can have an enjoyable experience and avert problems,” a member said.
The house will vote on the recommendations next week.
By Tshering Palden

7 replies
    MIGNIEN says:

    I apologize SIMPLYME for his comment send on nov 24 at 7.54 P.M.
    You use a high English writing and a very style with a rigourous way to expose your ideas . ( I am upper graduate in french language ) Which is seldom in many kuensel articles i translate almost every days for the few french speaking TCB guides to give them vocabulary and words being immediatly used for any free discussion with their tourists.

    As a french people and knowing and loving much your country , i am connected with people who ask me how to get Bhutan . Because they know i come to Bhutan once a year every year to see my buthanese godson whom i teach him in high french , and who is TCB guide for french speaking tourists ; according them , they are astonished he speaks a very fluently french without any accent . There is only 5 speaking french guides over about more than 300 on the job ; others being without any group to manage.

    I would like to have your mail so that i can elaborate with you possible journey according the choice of french tourists who want to come in your deligthful country blessed by Gods.

    I give you my mail so that we can have exchange if you want !

    Let the Lord give you benefits and opportunities y in your business . Under the wisdom of HSM your so Human KING

      MIGNIEN says:

      SIMPLYME : reading the article , i discover that there is really 1700 T.O. as you said and not 1300 as I said ; those figure were the one of last year . excuse me !

      In the future , with liberalizing the tariff , there will happen numerous dead among T.O. ; I hope the best for your business .

  2. Simplyme
    Simplyme says:

    This is in regard to the liberalization of the daily tourism tariff; the following is my personal and most sincere opinion on the recent recommendations and justifications to liberalize the daily tourism tariff put forth by the National Council. The fact that there has been a steady increase in the number of new tour operators over the years, from a mere single digit in the 1970’s to about one thousand seven hundred tour operators today, shows the present tourism policy was never confined to a select few. And not to mentioned the ever increasing number of international tourists over the years.

    4 years ago I along with my six friends was out of job and exploring business ideas or new enterprising ventures. The tourism policy and regulations were so conducive and protective that we all went into the tourism business. Thanks to the “high value low impact policy” it not only benefited the country but us too, being new in the market with no capital and only with some researched data in hand. The tourism industry was never confined to few but was open for all interested and each had their share of the pie depending on their hard work and quality of services delivered.

    Now, how certain are we and from which angle does one get the assurance that if the daily tourism tariff is liberalized, the number of tourists visiting Bhutan will fairly be distributed amongst all the 1700 tour operators? If this is not a personal assumption then there must be a mathematical solution whereby the liberalization of the daily tariff will equate to fair distribution of tourist to all concerned parties. And, even if this holistic fabulous approach ever succeeds, are we encouraging a healthy competition and creating a level playing field among the players in the market? Or will this make the well established few tour companies with their own fleet of cars and hotels all over the places take the edge over the middle and small/new tour companies by offering the lowest price to the tourists? With the price into play and a consumer’s basic instinct to go for the lowest price, will this not knock out the middle and small/new tour companies off the tourism industry for good?

    The more danger also lies in the background, which is even bleaker. Let us not forget our country getting run down by mass tourism with negative impact on the environment and community. Let us also consider the frightening impact it will have on our fragile youth as a result of cheap tourism and influx of poor quality tourists. Can we afford to turn a blind eye on the negative impacts of this liberalization?

    Similar concerns were shared by all of the people I met (from different social and educational background) and they also voiced the same unease. And this made me think, while I appreciate the National Council’s Economic Affairs Committee and their initiative for equitable socio-economic development, such recommendations also makes me doubt a little whether there are any vested interests (of their own) or of the select people and tourism industry businessmen who called and applauded the recommendations.

    Let us not murder this highly prized tourism industry (even widely appreciated in the international market for its noble tourism policy) as a result of some good orators, just because they can make valid opinions to an apparently ‘doing very well, no change required’ situations. If we are to make any changes in the current policy, let us be practical and be fully convinced to apply for change in the larger interest of the country.

    It is very interesting to note that some of our learned and Honorable Members of the National Council are expecting to bear fruits after cutting down the tree from the roots. “When prices become competitive, tour operators will come up with many tourism products from various parts of the country, which would actually benefit areas not touched until now,” Zhemgang Councilor mentioned in the national newspaper.

    If the prices were to play, I would rather focus on areas and products with less time and resources to bring down the cost. I would rather promote Thimphu and Paro only as there are many choices in hotels, especially regarding room rates, well developed infrastructure and avoid additional transportation cost. Just a thought, if I was to promote far flung areas like Lhuentshi and Zhemgang then the overall cost of the tour package will be high, whereas I can easily convince the tourists to spend their (already) limited time in Thimphu, Paro and the nearby regions. Tourist actually come to experience the unique culture of Bhutan and I can easily promote remote villages of Thimphu, Paro, Haa, Punakha and Wangdue valleys as they also have a lot to offer in terms of traditional authentic Bhutan experience and not very necessary to take them to the east or central parts of the country.

    Having said that, until now, the price of the tour package (daily tariff) never interfered in the itineraries I designed for my guests. Depending on their time, my guests could visit all the places both near, far and remote, because I want my guests to experience and explore as many places as possible within their time frame since the prevailing daily tariff is more than enough to cover all of their expenses and more.

    Now, if the liberalization of the daily tourism tariff comes through I may as well prepare myself for the oncoming war with other tour operators solely based on the prices.

    However, on the other hand, if the liberalization does not come through and if we don’t need to compete with the prices, we can then think of competing in other ways. One main focus can be in improving and diversification of various tourism products to attract and uphold Bhutan as a unique holiday destination.

    I have been in the industry for the last four years. Since the daily tariff is fixed and regulated, my focus was on quality improvement and product diversification. Also since the tourists are aware of this fixed daily tariff, there is no time lost in negotiating and haggling the costs! And instead we focus on creating a unique and quality experience worth the dollars.

    Therefore, I earnestly request all members of the Parliament to please consider all the concerns and the impact of such a recommendation, so that, such irreversible policy change will not kill the goose that lays the golden eggs.

      MIGNIEN says:

      Although i have said that my comments are at the end of article called “let we make a mistake ” , i prefer to write in the following comment of simplyme to thank him for his very interessant text in a well english writing!
      i fear that councilors have not understood that ther is a new generation coming of occidental tourists within a short term . .Have thet noticed the drop of occidental tourists arrivals ( see kuensel article ) . Bhutan is not alone in the world of tourisme ; you know the dark point of Bhutan , : bad roads and lack of toilets along any roads.
      I love so much your country that I intend to search the way to increase arriving occidental tourism who make money for the country . But , since , drop of arrival tourist has happen , and the risk of attacks in europe by dhjihadists is not reassuring.
      Nowadays french speaking generation of tourists has an average of about 60 Years old ; they are retired and fortunate .
      A 15 days maximum ( maximum fixed by TCB . ( why this restriction ?) coast about 4500 USD out of private boughts . This group can pay a so expensive sum , wihout any problem .

      In that first part of my comment , i have a suggestion to identify the points of interest of flux of occidental tourists who have yet visited Bhutan ; and their correspondants agents in Europe if they have. With a three question survey for ancient tourists :
      1/ Which you like the most in Bhutan ?
      2/ Which sports and which sort of activities do you like in Bhutan ?
      3/ According you , which activity would you like to found in Bhutan which not exist nowadays?
      You can use the TCB guides to do that survey because they are in direct contact with the tourists they manage . And they can explore other non said questions . The tourism Policy must be in advance and look forward to prepare the future .
      All the protagonists and stakeholders of the tourisit Policy are concerned . It is not the time to rest on ones’s laurels . If the country wants to go ahead ; The economy of the state is on the balance
      So you must think how cater the following generation of about 40 Years old . For this new generation , the today tariff is to much expensive . For the same price , they can buy a one month under the sun of Pataya in Thailand or in the numerous new hôtels along the beach of north Shri Lanka in 5 star hôtels inclusive extra bought purchases !!! And the T.O. of those countries offers many packages inclusive tours for all different coasts ! .
      Buthan tourism Policy mus react !!
      The councilors of Council’s of economic affairs must think that tourists are not a simple object just to make money !
      So let the T.O. offer packages very attractive. They have inventively : let them make the core of there job . They do not want to see high value and few volume being with high tariff transformed in the future with low value and few tourists .
      I am always speaking about occidental tourists
      mainly french , german , belgians and italians..
      I agree with 65 Euros for the gvt : no change . But a suggestion to modulate the tariffs :
      1/ A package of about 130/150 USD by day per person for short journey ( a week ) pratizing walking along alleys and paths forest and observing flora , fauna , nature , building and so on walking or riding on bycicle . .
      2/Packages up to 250 USD for long journey “complete bhutan ” of at least 2 weeks up to three weeks for instance .
      3/ And more than 300 USD for very long journeys with treks , drafting , boating , alpinism , walking and all others water sports .
      Let confidence to the T.O. . They know their jobs and they can select guides very skills and well paid with all the equipement And speaking a very good English . Few ( 5 over 150 ) can speak french or german ; that is the problem . And few are cultivated say T.O. .
      I take account the main default that tourists complain for : lack of toilets ( clean ) along roads ; lack of variety of meal ( the hotelier do not want to hire chef except in 5 stars hôtels. )
      Roads very badly maintened mainly in the east districts .
      And they complain with better connection with international airlines flights : most of international Airlines land at DELHI in the end of the afternoon ; nowadays , it is impossible to have a proximate connection to fligt tp PARO . So you need to stay in a waiting room in DELHI airport up to 3 or 4 A.M to take the first flight possible at 7 AM to PARO ;
      And more : as both Drukair and Bhutan Airlines are not enlisted in OACI ( international civil aviation organization) it is impossible , nowadays to check luggages from PARIS airport up to PARO . and reverse . You must disembark in DELHI , pass border line ; and in the early hour repass the border line to ; FOR THE BENEFIT OF INDIA FOR WHICH YOU NEED A VISA ( 60 Euros ) .
      Without that bad operation , you will be authorized to wait in the transit waiting room without entering in INDIAN TERRITORY . Whitout paing visa fees !
      I have written to the airport authorities of PARO to claim about that problem without any answer . That is very impolite.
      Not any councilor have move those problems ; they discuss only about inner problems ; they seem to ignore the new deals of international current of tourism Policy .

      According regional tourists ( Madivians , bangladeshis , indians ) who can enter in Bhutan without any visa , fees and tariffs , who come with their own cars or with indian T.O. !! and with their own meals , and sleep in low price hotel occupying up to 5 or 7 person in one two bedded room , Bhutan earn nothing except for the hotel manager who get money cash without income taxes

      So I repeat leave Bhutanese T.O. manage packages as their own decision .
      And when the councillors fear mass Policy tourism , they are wrong : they forget that visa are delivered only by TCB and not in any foreign embassy as the other neihourghs countries do . TCB can easily manage the entries in the territory ; and limit numer of tourist.
      All those considérations can be discussed to give direction to the new tourist Policy .
      IT IS URGENT FOR COUNCIL’S ECONOMIC AFFAIRS TO BE REALISTIC : how to cater new type of tourists in the future to get a good profitability and return rate for the country ? The goal being to profit to the development of the country .

      A tiny country like Bhutan do not need 1300 T.O. ( Symplyme say 1700 ; has he check through TCB figures ? ) . Despite many enlisted in TCB , few work or hardly . According me and my informators in Bhutan .

      And about guides , many of them say T.O. are not enough cultivated in general knowledge ( history , science , philosophy , managing of their country , flora , fauna , , wildlife ; if they would read kuensel articles , they would be well informated) .
      And few speak rare languages like French , German , italian ; and more many of them speak a very bad English . And they are shy and sad and cannot have free discussion with tourists . Tourist love discussion during evening meals with their guide .

      But when they are cultivated as i tell above and can have fluent discussion with tourist in their genuine language , i think there is no cause of anxiety ; the best of them are choosen by T.O. . they have a list of the most famous in each language . And the tourists appreciate them as they write their compliments to The T.O. manager .

      Let T.O. do their core job .

      Go forward Young T.O. Bhutaneses ; you have plenty of areas and ideas to show to cater tourists.

      Let the Lord get confidence about the future for Young T.O. like Simplyme

      • MIGNIEN
        MIGNIEN says:

        Just an addition of my comment : as PARO airport is not equiped to night landing , and as pilots says the weather is difficult in the aternnoon in PARO airport , it is difficult to land ater 13H o’clock .
        But if the airport was equiped with modern Equipment , even with bad weather condition , the best pilots will success in landing . The proof is that there no flight accident since the opening of the airport .
        Despite the bad reputation of “dangerous airport” by international association of pilots.

  3. A duty-bound citizen of Bhutan
    A duty-bound citizen of Bhutan says:

    It’s my earnest advice to all the law-makers of the day, both NC and NA. Do not kill the golden goose that lays golden eggs for extra few hundred thousand dollars by changing the existing tariff system of the Royal Government of Bhutan! our beloved King Jigme Singye Wangchuck has been very visionary to introduce the responsible tourism in the Kingdom, and his vision is not limited by $65 royalty from the high-end visitors. if you’re for liberalizing it, it’s a regrettable mistake. Do you know for what our country is best known for today? if it isn’t for this unique tourism policy of the Royal Government of Bhutan, the world will have not business with us. we’re too insignificant to be found out if they were to look for us, but it is for this resounding high value and low impact tourism policy of the Royal Government of Bhutan that Bhutan’s best known for and the people from the world over had beyond words admiration for it and this is the only reason why we have been so progressive since its inception from 30 people to now over 100,000 people every year. if some of NC members argue that the only way forward to achieve regional parity of tourism development in the country is by liberalizing the tariff of the Royal Government of Bhutan, it’s a mistaken belief. by succumbing ourselves to market forces, all you care is $65 and nothing else. What will happen to the tour guides? They’re being marginalized from the very outset and nobody was there to take care of them. It’s a daily battle for them. When the minimum tariff couldn’t look after them well, how on earth the NC members think by liberalizing on the tariff will take care of them? Then, package pricing competition is bound to set in and the visitors will go for the lowest quoted package. and the tour is run on the tight budget and how can we expect the agent we work for expect us to pay well? coming to the question of benefiting few operators, i see liberalizing it will do it even worst than what’s it’s now. only individual few with hotels and the company who are already established with fleets of cars can run the tour and the struggling new comers will ultimately get eliminated. if the existing established companies can quote at the lowest, why cannot they be the ultimate beneficiaries now?
    if we’re for it, Bhutan’s heading for a disaster…………. i wish if they could explore the source elsewhere to fuel the developments. or we could even slow the pace of development in the country that we could convince the voters that voting sb to power is not always promise to give and give.
    let us all respect the vision of King Jigme Singye Wangchuck and not change the tourism policy already put in place and not change the way we promote our country. If NC & NA’s vision is limited by $65 royalties, they could think of other things to make domestic revenues, tourism is not the only option. In a hope to make more money, let us not kill the hen altogether!!!!!

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