Tourism could take at least four years to get back to regular trend
Yangchen C Rinzin
As Bhutan vaccinates its eligible population and relaxation on Covid-19 pandemic restrictions remain uncertain, concerns on the timeline for recovery and restart of tourism still stand.
Many in the tourism sector are expecting a slow reopening in 2021.
The forecast made by the tourism stakeholders indicates that even if tourism reopens it would take Bhutan as long as three to four years to return to pre-pandemic figures and trends.
Bhutan is also likely to be negatively affected by the extended economic downturn in the region, on which a large number of tourist arrivals depends, according to the UNDP Bhutan’s diagnostic trade integration study update 2020.
Tourism in Bhutan has remained shut since March 24 2020 after the country had its first Covid-19 case. This directly affected about 50,000 people working in tourism and its related sectors.
However, the study mentioned that this crisis is an opportunity for a serious reconsideration and transformation of the tourism sector, despite various high-level committees are formulating various post-Covid-19 strategies.
“The tourism sector must also improve the quality of the product itself,” the study, produced by the department of trade and UNDP Bhutan recommended. “A tariff of premium is worth it if, and only if, the quality of services and infrastructure, the ease of booking and travel, and the brand reputation are also worth it.”
Even the 12th Plan is aiming to promote Bhutan as a year-round destination for high-end tourism and specifically targets 15,000 new jobs in tourism, which comprises 24.27 percent of the total 61,811 projected jobs.
The report recommends that the key to future and sustainability of tourism in Bhutan is a proper assessment of its tourism system. To enhance yield and quality tourism, it recommends strategic product diversification, as this is a major opportunity for Bhutan.
The focus, otherwise, has been more on the cultural tours, occasionally combined with hiking or spiritual elements, but no real innovation has taken place in this area.
“So, if Bhutanese tourism wants to compete with other high-end destinations, there is a need for a well-planned strategy and action plans,” the study recommends.
It also states that it is important to redefine cultural tours to keep cultural tours attractive for new and repeating visitors, and position Bhutan as a health and wellness destination.
The tourism sector should also leverage technology and digital marketing because today, the sector has yet to adopt a simple online payment gateway system, including the sector is also recommended to improving immigration formalities instead of manual typing of information.
Strengthening tourism linkages, improving booking operational efficiencies, professionalisation, and capacity building of stakeholders are some of the other recommendations.
“The tourism sector must also review and remove seasonal differentiation, the self-imposed regulation,” the study recommends. “The pricing between high and low seasons hinders the promotion of year-round tour packages.”
The high season for tourist visits is during the month of March, April, May, September, October, and November.
The study recommends that domestic tourism can play a critical role to help drive economic recovery. However, it will require strong initiatives focused on marketing and promotion, as well as financial incentives.
The tourism sector has been allocated a total capital outlay of Nu 116 billion (B) in the 12th Plan and Nu 15B has been allocated for flagship programme.
A total of 315,599 tourists arrived in 2019 and Bhutan earned USD 88.63 million through the tourism tariff.
The report pointed out poor regional spread where most tourism activities were concentrated in the west.
The data from the Royal Monetary Authority also showed that Nu 12.8B of the total Nu 14.8B in loans sanctioned by financial institutions for hotel construction were for hotels in Thimphu, Paro, and Punakha.
It was found that despite repeated pledges by successive governments to increase visits to the east, the benefits of tourism continue to be uneven in terms of regional spread. “This was probably because of lack of tourist infrastructure facilities and amenities, limited tourism product diversification, and long travel distance and time.”
There are about 35 excess tourist standard hotels with 232 more cleared for construction in 2019 in Thimphu, Punakha and Paro.
There were 160 tourist standard hotels, with an estimated 500 more non-tourist standard hotels aimed at regional tourists as of March 2020.
The report stated that the bottleneck in the carrying capacity was related to air transport where Bhutan has only one international airport and only two airlines limiting the destination in regions.
Weak inter-agency coordination among organisations and among government agencies in regulating and promoting the tourism sector was also pointed out. “Government’s initiatives to stimulate the development of the tourism sector are diluted during implementation,” the report stated.
Professional and capacity development and low digitising or use of technology were also pointed out.
Edited by Jigme Wangchuk