In a bid to revitalize its tourism sector, the Himalayan nation of Bhutan has announced a 50% reduction in the daily fee charged to tourists, lowering it from $200/€185 to $100/€92.65. The move comes as the tourism industry continues to grapple with the aftermath of the Covid-19 pandemic, seeking ways to recover a year after the lifting of restrictions.
Last year, Bhutan had increased its “Sustainable Development Fee” to $200 per visitor per night, up from $65/€60, after concluding two years of Covid-related limitations in September. This fee hike was intended to offset the carbon emissions generated by tourists during their visits.
The new rate of $100/€92.65 per night will be implemented from September and is set to remain in effect for a period of four years, as per a government statement released on Friday.
The decision to lower the fee was motivated by the recognition of the tourism sector’s significant contributions to employment generation, foreign exchange earnings, and overall economic growth, according to the statement.
Traditionally secluded from the outside world, Bhutan opened its doors to tourists in 1974, initially receiving a modest 300 visitors. The numbers witnessed remarkable growth, reaching 315,600 visitors in 2019, reflecting a 15.1% increase from the previous year, according to official statistics.
In an effort to preserve the pristine nature of its peaks, Bhutan has taken measures to curtail mass tourism, including a prohibition on mountain climbing. The relatively high tourist fee has naturally led to a smaller influx of visitors, composed largely of high-spending travelers, in contrast to neighboring Nepal.
Nonetheless, Bhutan aspires to elevate tourism’s contribution to its economy, which stands at $3 billion/€2.8 billion, from the existing 5% to 20%.
Dorji Dhradhul, the director general of the Department of Tourism, expressed optimism that the fee reduction could boost tourist arrivals during the peak period of September to December. This timeframe includes various religious and cultural events that take place in the predominantly Buddhist country.
Although the government had eased stay duration and fee regulations for tourists in June, the anticipated surge in numbers has not materialized.
Dhradhul highlighted that, despite more than 56,000 tourists visiting Bhutan since January, approximately 42,000 were Indian nationals who are subject to a reduced fee of 1,200 Indian rupees (€13.50) per day.
With around 50,000 Bhutanese individuals employed in the tourism sector, the industry used to contribute about $84/€78 million annually to foreign exchange earnings prior to the pandemic over a three-year period.