The fourth pay commission report recommended introducing sustainable development fee (SDF) on regional tourists.
Currently, regional tourists do not require permit fee to enter Bhutan.
The report states that in view of the increasing number of tourist arrivals from the region, there is an opportunity to introduce SDF on regional tourists. In 2018, about 170,000 regional tourists visited Bhutan. “The introduction of SDF of Nu 500 per head is estimated to generate Nu 425 million annually.”
The report also proposes the government could also look into the possibility of enhancing the USD 65 SDF for the international tourist that has remained unchanged for the last 40 years or more.
Tourism Council of Bhutan (TCB)’s director general, Dorji Dhradhul, said that there was a plan to introduce a minimal fee on regional tourist and revise the SDF of USD 65 for international tourists.
“This has nothing to do with the pay commission’s report. The council is also on the same track,” he said.
The council is in the process of discussing how to manage regional tourist, including charging a minimal fee during the peak season.
He pointed out that some media reports on the issues of regional tourists gave wrong message that the government was trying to restrict the regional tourists. “We are not talking about stopping or discouraging regional tourists. We are talking about regulating and managing regional tourists effectively.”
Regional tourists were important, he said.
While some are of the opinion that the regional tourist benefits the low-end hotels, in reality, the majority of the star-rated hotels’ clients are a regional tourists.
Dorji Dhradhul said that currently the issue with the regional tourists who come from Phuentsholing was about regulating and managing them because of which inconveniences occurred to others and to the guests themselves.
Bhutan, he said, was a happy host and irrespective of where the tourists came from, they should have the best experience.
International tourists are regulated. They pay a minimum tariff and they get a tour guide and everything including the accommodation and transportation are taken care of by tour operators.
“They receive VIP treatment and they are well taken care of, and even if they face some problems they leave the country happy and this is what we want,” he said.
The problem with the regional tourist, he said, was that they came on their own and there was no one to guide them. So, sometimes they end up doing what they are not supposed to. “It’s because they don’t have a guide and they are not aware of the dos and don’ts and then their reputation goes wrong, which is not good.”
“This sometimes makes people feel that regional tourist are generally like that and could result in discrimination. When this happens, they will not get a good experience which is our shortcoming,” he said. “If we are not able to give them good experience then it is a failure on the part of TCB.”
Secondly, he said that there was a risk for their safety and security. In the past years, many accidents occurred. When such misfortunes happen, it was difficult to follow up and to coordinate since they came on their own.
In the case of international tourists, it was otherwise and the tour operator would be held responsible for their guest.
He said that this was one reason why TCB is going for regulation meaning regional tourist coming through a tour operator. “If they don’t want to come through a tour operator then fine but to at least have a Bhutanese guide during their stay in the country.”
The assumption was that if there was a guide then they would be taken care of, he said.
Currently, the majority of the regional tourists physically go to the immigration office, fill the forms and get the permit. The international tourist does the same online so the TCB is planning to have the same procedure for regional tourists.
Besides convenience, he said, e-permit would solve many problems for regional tourists. “They will not have to wait in a queue, get their permit to enter Bhutan in advance, and can enter the country during weekends.”
He said that it has many advantages and it is easy for the monitoring agencies to manage as well. The e-permit is an option and only a few regional tourists avail the service now.
The council is also looking at revising the daily SDF of USD 65 or the minimum daily tariff itself.
Dorji Dhradhul said that many believed that the minimum daily tariff of USD 250 was expensive when in actuality it wasn’t. “Of the total, USD 65 is the SDF and the rest provides the guest three-star accommodation, personal guide, transportation, meals and fees for entry to the monuments.”
“We want to make Bhutan an exclusive destination and take tourism to the top,” he said. This can be done in two ways, the first in terms of revenue generation and secondly by making Bhutan number one tourist destination in the world.
To do this, he said, the fee had to be high. “If we keep the fee at 250 then how would we become exclusive? If Bhutan wants to become an exclusive destination, high-value low impact, then I feel we need to increase the fee.”
The council is also working on the tourism policy and is expected to have a final draft of the next tourism council meeting that is expected to be held in June or July. “By end of this year, we will definitely have a policy and that is our biggest work.”
According to the report, reviewing and rationalizing existing tax rates include revision of the green tax, royalty on forest products and non-wood forest products and introduction of other taxes like value-based property taxes, an extension of the coverage of five percent property transfer tax and luxury taxes to generate additional revenue are some of the other recommendations.
The report states that to ensure that the proposed salary revision does not undermine the long-term fiscal sustainability and economic stability of the country, and in keeping with the relevant provisions of the Constitution, the recommendations are proposed for consideration.