With close to Nu 12 billion still owed to financial institutions, Bhutan’s hoteliers are appealing for further assistance, including additional loan deferments and concessional Economic Stimulus Programme (ESP) loans.
During a consultation meeting with financial institutions yesterday, the Hotel and Restaurant Association of Bhutan (HRAB) presented five key recommendations aimed at easing repayment pressures. This follows the expiry of the loan deferment period in June and the conclusion this month of the Royal Monetary Authority’s (RMA) seven temporary support measures for the sector.
Proposed Measures for Relief
HRAB’s proposals include:
- Additional repayment deferments
- Capitalisation into Fixed Equated Instalment Facility (FEIF) accounts
- Concessional ESP loans
- Loan splitting
- Maturity extensions
The association has also formally requested the Office of the Cabinet Affairs and Strategic Coordination to secure ESP loan support, proposing that the government subsidise 4% of loan interest repayments for affected hotels.
“We have consulted with bank CEOs and proposed that the government extend ESP support. This would help many hoteliers who are unable to service their debts due to low occupancy,” said Ugyen Tenzin, HRAB Chairman.
Tourism Struggles Despite Recovery Signs
While the industry is showing signs of recovery, HRAB reports that occupancy rates and revenues remain well below sustainable levels. The number of tourist hotels has surged from 160 in 2019 to over 400 in 2025, yet visitor arrivals remain under 50% of pre-pandemic figures. Bhutan welcomed over 315,000 tourists in 2019, compared to just over 145,000 last year.
The association attributes the slow rebound to factors such as the high Sustainable Development Fee (SDF), expensive airfares, and steep monument entry fees, which collectively make Bhutan a costly destination compared to its regional neighbours.
Calls for Flexible Tourism Policies
HRAB has urged the government to consider targeted SDF discounts based on group size and length of stay, stressing that the intent is not to abolish the fee but to make the country more competitive.
“The lack of guests is the biggest challenge for hotels today. Without changes to make Bhutan more affordable for tourists, revenue will remain low, and loan repayment will be impossible for many,” said Ugyen Tenzin.
If ESP loan support is granted, HRAB plans to submit a priority list of the most severely affected hotels for government assistance.
