Bhutan reconsidering Sustainable Development Fee in response to increased travel demand

Bhutan’s Tourism Industry May Reconsider $100 Daily Fee

Bhutan’s Prime Minister, Tshering Tobgay, recently revealed to CNBC that the country is considering revising its controversial $100 daily tourism fee. The fee, initially implemented as a way to manage tourism flow and protect the country’s natural environment, may be adjusted if the tourism industry recovers swiftly. However, Tobgay hinted that the fees could potentially increase in the future.

The current daily fee stands at $100 for adults and $50 for children aged six to 12, but it is described as a “time-limited incentive” valid until Aug. 31, 2027. Bhutan reopened its borders in September 2022 with an increased “Sustainable Development Fee” of $200 per person per day. The fee was later lowered in 2023 to attract more travelers to stay longer before being halved across the board.

Tobgay emphasized that the fee amount could change before the specified date due to potential demand exceeding the country’s capacity to welcome visitors. He stated, “We’re going to have a quota of 300,000 tourists, and if the demand to come into Bhutan surpasses our capacity, we might have to increase sustainable fees at that time.”

A Slow Return of International Travelers to Bhutan

Bhutan’s tourism industry has been recuperating at a slower pace compared to other countries in Asia, but Tobgay remains optimistic about a rapid turnaround. With plans to aggressively promote Bhutan’s attractions, Tobgay believes there will be a surge in visitors eager to experience the country’s offerings.

In 2019, Bhutan welcomed 315,599 international visitors, with 73% originating from India. However, due to the impact of the COVID-19 pandemic, tourist numbers dwindled last year to around 130,000. Bhutan aims to achieve 300,000 tourist arrivals annually, with half of them being from “third countries” and “dollar-paying visitors,” as outlined in Tobgay’s People’s Democratic Party manifesto.

Fee Changes Amidst the Covid-19 Pandemic

Before Bhutan closed its borders in March 2020 in response to the pandemic, travelers were required to pay a daily package rate starting at $200 per day, which included hotel, transportation, tour guide costs, and a mandatory $65 Sustainable Development Fee. Following the reopening, these costs are now additional to the $100 Sustainable Development Fee.

Tobgay acknowledged the confusion surrounding the changes to Bhutan’s Sustainable Development Fees but expressed confidence that the current rate would aid in the country’s swift recovery. He mentioned that many tourists are willing to pay $200 per day due to the positive impact the fee has on protecting the environment and providing free education and healthcare to Bhutanese citizens.

Overall, Bhutan’s efforts to balance tourism growth with sustainable development will continue to be a focal point as the country navigates the post-pandemic landscape.

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