Dechen Dolkar

As the government aims to increase the annual average number of tourist arrivals to 300,000, skepticism among tourism service providers is on the rise.

They argue that while the government benefits from the Sustainable Development Fee (SDF), the real profits are being siphoned off by overseas agents.

Tour operators say overseas agents dominate local agents because tourists can apply for visas online, bypassing local agents.

Tour operators describe the current tourism scene in Phuentsholing as chaotic like a fish market, with Indian tourists and guides haggling over prices. They attribute this to the high rates the domestic airlines charge, forcing some 95 percent of tourists to travel via Bagdogra.

Besides, overseas agents dictate hotel rates in Bhutan. A Thimphu hotelier said the current policy allowed foreign players to dictate the quantity and quality of tourism. He said some three-star hotels are forced to sell a room at Nu 800 a night, and four-star rates have been reduced their rates to the level of three-star.

“If the current rates continue, we won’t be able to pay the equated monthly instalment (EMI),” a hotelier said. Hoteliers have been accepting the prices offered by overseas agents to keep their business going. They claim a lack of proper study by the government caused this situation.

A hotelier said that even if the government brings in 300,000 tourists, hoteliers will still not reap the benefits due to low pricing.

However, an official from the Department of Tourism said that the government cannot fix hotel prices, which must be determined by market dynamics. The official said hotels should focus on marketing to attract customers directly, rather than only through tour operators.

Meantime, tour operators ask whether Bhutan has enough hotels to accommodate 300,000 tourists annually. Currently, there are 184 three-star hotels, 15 four-star hotels, and 20 five-star hotels in the country. Additionally, there are 117 one-star and 55 two-star hotels.

Suppose the target number of 300,000 is distributed equally throughout the year, 821 tourists will enter the country daily, which will require 410 rooms, assuming two people share a room lFor instance, if 821 tourists stayed in Thimphu at the same time, they would need a minimum of 40 hotels, considering most hotels in Thimphu have a maximum of 40 rooms.

Besides, tour operators say the DoT does not effectively monitor tourists, especially in Thimphu and Paro, allowing even taxi drivers to take tourists without guides. Commentators say trained tour guides are losing their jobs to taxi drivers.

On the other hand, it was learnt that tour guides are keeping themselves busy and earning well. A guide escorts a group of tourists from Phuentsholing till Wangkha integrated check post, until where monitoring is conducted. From the check post, tourists are set free on their own. From there, the guide returns to Phuentsholing to pick up another group of tourists. This way, a guide can make two to three trips a day between Phuentsholing and Wangkha check post.

Thanks to the new tourism policy, which resulted in poor business, tour operators say most tour agents have surrendered their licence. Before the Covid-19 pandemic, there were around 4,000 tour operators in the country. Today, the number is down to 1,500.

“Those who withdrew mainly dealt with the Asian market, which has seen a decline in tourists due to inconsistent policies,” said a tour operator.

It was also learnt that a Chinese agent has withdrawn its partnership with local tour operators.

The official from DoT said that most tour operators do not actively seek new partners or set themselves apart from others with specialised itineraries or products. “They are just waiting for business to come to them, making them vulnerable to international agents’ pricing, especially from nearby markets with bulk business,” the official said.

Similarly, vehicle owners say that vehicle hire rates have decreased. Due to fronting, some overseas agents own vehicles in the country, offering them at cheaper rates, forcing local owners to lower their prices.

Tour operators claim that the country’s foreign reserves are not growing because tourists deposit only the SDF in the bank, bringing the rest in cash. Tour operators encourage tourists to bring cash, which they exchange in the black market at higher rates.

Regarding the Indian rupee, since most tourists visit from Phuentsholing, operators in Jaigaon exchange the rupees with ngultrum from the tourists.

A tour operator said he had raised this issue to the government, predicting the consequences of policy changes, such as a massive decline in foreign exchange inflow, rampant tax evasion, hoteliers suffering, fronting, and declining service quality and visitor experience.