BHUTAN’S NATIONAL COUNCIL ON THE RECOMMENDATION TO LIBERALIZE THE DAILY TOURISM TARIFF

November 30, 2015
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The National Council  on 19th November sought more justifications on the recommendation to liberalize the daily tourism tariff from its Economic Affairs Committee before it endorses the report.

Some of the issues the house mulled over at length were whether Bhutan should drop the daily tourism tariff and leave it to the market forces and what could be the likely consequences of such a move.
The tariff remodelling recommendation is at the core of its Economic Affairs Committee’s yearlong tourism policy review report.
The committee had recommended keeping the royalty portion of the tariff and leaving the rest to be determined by the tour operators.
Trongsa Councillor Tharchen supporting the move said the fixed tariff until now had confined the business in the hands of a few.
He said if the country is to spread tourism benefits to other parts of the country and accomplish quality tourists with maximum revenue, liberalising is the way forward.
“Of the 1,700 tour operators, about 90 percent get only 30 percent of the tourist arrivals, while the rest goes to the top 10 operators,” he said.
He said even the Royal Monetary Authority had proposed to liberalise the tariff.
Despite the chairperson’s repeated calls for brevity and the session stretching beyond normal hours, the members pounded the committee with issues and concerns.
Eminent member Tashi Wangmo asked if it was necessary to liberalise the tariff.
“We should first explore administrative and management measures to solve the problems of undercutting,” she said.
She said one of the advantages of the fixed tariff was that the country could remain as a high-end tourist destination.
“If we leave the tariff determination to the market forces, the danger is that the sector could be solely driven by commercial interests and could encourage mass tourism,” she said.
Members also said that when the daily tariff becomes competitive, tour operators in desperation for business could further undercut.
“How can we ensure that the liberalisation of tariff would not benefit only the select few?” Bumthang Councillor Nima asked.
The committee’s chairperson and Chukha Councillor Pema Tenzin said tourism industry businessmen have been calling him saying they appreciate the committee’s recommendations and sharing their concerns.
“For the past 10 years they have been discussing this issue but nothing came out of it,” Pema Tenzin said.
Committee members said some vested interest groups prevented the proposed changes to the tariff until now.
“The fixed tariff really affects the service industry, which has been until now held at the mercy of the tour operators,” Dasho Tashi Wangyel said.
Committee members said the proposed pricing would not lead to mass tourism and poor quality of tourists.
“When prices become competitive, tour operators will come up with many tourism products from various parts of the country, which would actually benefit areas not touched until now,” Zhemgang Councillor Pema Dakpa said.
Deputy chairperson and Haa Councillor Tshering Dorji proposed increasing the royalty and doing away with peak and lean seasons rates as well.
Members said regional tourists should also be treated the same as international tourists.
“They have to be offered the same standard of services and care, for which a certain charge could be levied,” Bumthang Councillor Nima said. “At present, the tourists are processed in the same immigration office that deals with foreign labourers. This needs to change.”
Gasa Councillor Sangay Khandu proposed that regional tourists’ vehicles should also be levied green tax like the local ones.
Thimphu Councillor Nima Gyaltshen said unregulated regional tourist posed risk to the sustainability of the subsidised fuel.
Members said the regional tourists could not be blamed for the problems arising from lack of policy and proper mechanisms in the country.
“We need to urgently have a policy and other measures so that even our regional tourists can have an enjoyable experience and avert problems,” a member said.
The house will vote on the recommendations next week.

Source: Kuensel (Tshering Palden)

Informal regional tourists threatens Bhutan Tourism

September 30, 2015
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Formalise regional tourism, say Bhutanese tour operators

The influx of Indian tourists into the country without routing through local tour agents, known as informal tourism, has become a major problem for the tourism sector.

This was one of the issues Bhutanese tour operators raised with their counterparts from India during the Bhutan-India Tourism Conclave in Thimphu yesterday.

Bhutanese tour operators said the increasing number of Indian tourists coming in informally has resulted in poor service and unfortunate incidents such as the drowning incident in Mebartsho, Bumthang in 2013.

Such experiences, tourism officials, said can be avoided if Indian tourists come through tour agents and hire local guides.

Comprising 51 percent of the total tourist arrivals, India is the single largest tourist market for Bhutan in terms of number. Last year, Bhutan received 133,000 tourists in total, out of which 68,000 were Indians.

The upcoming visit of West Bengal Chief Minister Mamata Banerjee to Bhutan next month is expected to boost tourist arrivals from the state, tourism officials said.

Tour operators also said it was difficult to provide quality service and security in Bhutan if Indian tourists do not come through formal channel.

“We don’t want seven tourists to crowd a hotel room. We don’t want a Bolero car crowded with tourists,” Karma Loday of Yangphel Tours and Travel said.

He said the dollar-paying tourists get first class treatment unlike regional tourists and stressed that regional tourists should get quality services and take home good experience of their stay in Bhutan.

President of Bhutan Chamber of Commerce and Industry (BCCI), Ugen Tshechup Dorji, said the informal tourism sector has to be streamlined to provide the best of services. “One of the ways to make tourists come back to Bhutan again and again is by giving them good experience through quality service,” he said.

He also said it was important for Bhutan to harness the potential of tourism market in India, one of the largest economies in the world. “So far, we have never looked next door (India), where there is a huge potential,” he said.

However, Ugen Tshechup Dorji also said there was a need to create adequate awareness on Bhutan as a tourist destination for potential Indian tourists. He said Bhutan was better known in Europe than in India.

An Indian tour operator said the Bhutanese counterparts should not compare Indian tourists with Western tourists as the latter have their own preferences. “Indian tourists are not alternative business to Bhutan. They bring business when you have nothing,” he said.

The Indian tour operators also said that today more Indian tourists fly into Bhutan, supporting the country’s high-end tourism policy. He said many Indian tourists are now paying more than Nu 10,000 a night and stay in hotels like the Le Meriden and Terma Linka.

Highlighting some of the problems faced by Indian tourists in Bhutan, he said Bhutanese hotels close after 9pm, which is quite early for Indian tourists. “Indian tourists are not like western tourists who go to their rooms after 7pm.”

While some participants from India said airfares should be cheaper to encourage Indian customers to use flights, others asked for Indian chefs in hotels.

Responding to the participants, Thinley Palden Dorji of Hotel Association of Bhutan said that with the increase in number of regional tourists, the Bhutanese mindset was now changing that Indian tourists are for good.

Until recently, he said the regional tourism was not so significant and that the problem arose because the Bhutanese hospitality industry was initially designed to cater to western high-end tourists.  He assured that Bhutanese hoteliers would adapt to the needs of Indian tourists as the number increases.

Speaking at the seminar, labour minister Ngeema Sangay Tshempo said tourists are encouraged to hire guides and come through local tour agents. “We treat tourists as our guests and they should not be left on their own,” he said, adding that the government encourages guided tourists.

The minister said the government is looking at taking tourists to eastern and southern Bhutan to avoid over-crowding in west and central dzongkhags.

Indian ambassador to Bhutan, Gautam Bambawale, said India recognises Bhutan’s low-volume-high-value tourism policy and that tourism is the main area operated by the private sector in the country.

Source: MB Subba (KUENSEL)