As the world grappled with the upheavals brought by the Covid-19 pandemic, Bhutan found itself at a crossroads in the realm of tourism. This Himalayan kingdom had long aspired to be an exclusive destination, focusing on high-value tourism rather than mass influxes of visitors. However, the lure of money had initially steered Bhutan away from its vision. It was only in the midst of the pandemic that the nation realized the importance of preserving its unique charm, leading to the revision of the Sustainable Development Fee (SDF) and a renewed commitment to its “High-Value Low-Volume” policy.
During the tumultuous period that followed the outbreak of Covid-19, stakeholders in the tourism industry came face to face with a harsh reality. The influx of tourists had reached a point where the once-pristine landscapes and cultural sites were becoming crowded. Visitors began to complain about the overpopulation of tourists at popular spots, prompting Bhutan to take action.
The solution was to revise the SDF, a sustainable development fee that tourists pay to visit the country. This move was not without risks and opposition from various quarters, but it was essential to restrict the flow of tourists and maintain the integrity of Bhutan’s natural and cultural heritage. The revised fee, although it came at a higher cost for travelers, aimed to create a more exclusive experience and discourage mass tourism.
The results were astounding. Bhutan recorded record revenue from the SDF, totaling around USD 26 million in the previous year. More than 103,000 tourists visited the country, surpassing the projected tourism arrival targets and exceeding the revenue generated in both pre-pandemic and SDF revision years.
These numbers validate the effectiveness of Bhutan’s reforms. They demonstrate the potential of evidence-based decision-making and signify a promising start toward achieving the nation’s goal of being an exclusive destination. These reforms are not intended to stifle tourism or business opportunities but to firmly position Bhutan as a unique and high-value destination.
It’s essential to note that the reduced SDF rate, which is currently at USD 100, is a promotional rate set to expire in August 2027 unless changed. Regular evaluations and policy adjustments are crucial to adapt to changing circumstances. However, the commitment to the High-Value Low-Volume policy, conceived decades ago, remains unwavering.
Looking ahead, Bhutan has set an ambitious target of attracting 300,000 tourists this year, nearly half the country’s population. This goal signifies that, despite the increased costs, Bhutan continues to be a favorite among travelers. The nation is well-prepared to accommodate such numbers while preserving the quality of the visitor experience.
In addition to these developments, Bhutan is considering a special approach for regional tourists from bordering towns such as Guwahati, Siliguri, Kalimpong, and Darjeeling. These visitors may be allowed to enter Bhutan’s border towns without the SDF, providing a boost to the local economy and fostering friendly relations with neighboring communities. The SDF could still be levied for tourists venturing beyond specific points like Dewathang in Samdrupjongkhar, Rinchending in Phuentsholing, or Sarpang in Gelephu.