In an unprecedented move, Bhutan, a country renowned for prioritizing Gross National Happiness (GNH) over pure economic gain, is embracing independent, cost-conscious travelers in a bid to reinvigorate its economy. This shift marks a significant departure for a nation that has traditionally prided itself on high-value, low-volume tourism.
Prime Minister Tshering Tobgay, in his November 2023 election manifesto for the People’s Democratic Party, warned that Bhutan’s economy was “on the brink of collapse.” Over the past five years, the country has seen an average economic growth rate of just 1.7%, coupled with rising youth unemployment and dwindling foreign currency reserves. Now, tourism is emerging as a critical lifeline.
Bhutan welcomed only 103,000 visitors in 2023, far below its pre-pandemic peak of over 300,000 in 2019. The government aims to return to these levels, with an ambitious goal to diversify its visitor base. While Indian tourists accounted for 73% of total arrivals before the pandemic, Bhutan now seeks to attract more travelers from the U.S., Europe, and Australia.
“We can grow in a manner that is balanced and true to the principles of gross national happiness,” Tobgay stated. The GNH index, which assesses well-being across multiple dimensions, remains central to Bhutan’s development strategy.
New Measures to Attract Travelers
To boost accessibility, Bhutan is tackling long-standing issues around cost and convenience. In October 2023, Drukair Royal Bhutan Airlines began twice-weekly flights between Paro and Dubai, linking Bhutan to the Middle East for the first time. Previously, travelers had to rely on connections through major Asian hubs or transit through India.
Additionally, the launch of an online directory and booking portal in August allows travelers to customize their trips. Tourists can now independently book from a wide array of licensed guides, accommodations, and tour operators, a stark contrast to the previous system that required the use of local travel agencies. The portal already features over 1,000 guides, 471 tour operators, and numerous accommodations, with plans to include car rentals and shops soon.
Kinley Gyeltshen, chairman of the Bhutanese Tour Operators Association, called the portal “a game-changer for tourists.”
The government has also reduced the mandatory daily sustainable development fee from $200 to $100 per adult, effective until August 2027. The fee supports essential services like health care and education and funds sustainability projects. The move follows concerns from tour operators that high fees were deterring travelers at a time when global tourism is still recovering.
Encouraging Early Returns
These initiatives are already bearing fruit. In the first quarter of 2024, Bhutan recorded a 97% increase in visitor numbers compared to the same period in 2023. Notably, more tourists are arriving from markets like China, Germany, the UK, and the U.S., signaling progress toward diversification.
Namgyal Dorji, Bhutan’s minister of commerce, industry, and employment, emphasizes that the government remains committed to sustainable tourism. “Our approach prioritizes sustainable infrastructure enhancements and immersive experiences reflecting Bhutan’s core values,” he said.
The Challenge of Managing Growth
However, with increased visibility come challenges. Brent Olson, founder of Ethos Bhutan, who has been organizing trips to the country since the 1980s, warns of the potential strain on Bhutan’s small towns and cultural sites. “Visiting during peak festival months can be overwhelming,” Olson noted.
Social media has added a new dimension to Bhutan’s tourism strategy. The government and tour operators are leveraging influencers to showcase the country’s stunning landscapes and unique culture. But this has its risks. “Once social media hooks millions of people, they follow the same path,” Olson said, describing it as a “tricky balancing act.”
Prime Minister Tobgay has acknowledged that if demand surpasses the 300,000-visitor threshold, the sustainable development fee could be increased again. “As Bhutan gains international visibility, especially through social media and influencers,” Dorji added, “we recognize both the opportunities and the responsibilities.”
For now, though, travelers seeking an authentic experience in the Land of the Thunder Dragon may find this the perfect time to visit—before Bhutan’s new wave of tourism reaches full stride.
