In a decisive move yesterday, the National Assembly signaled its intent to halt the government’s subsidised airfare initiative for international visitors just six months into its roll-out. By a show of hands, 21 of the 40 MPs present endorsed the Economic and Finance Committee’s proposal to terminate the scheme, which was originally conceived to boost tourist arrivals.
Launched last year, the programme offered a 25 percent discount on airfares for dollar-paying travellers flying with Drukair and Bhutan Airlines during peak summer (June–August) and winter (December–February) seasons. The government earmarked Nu 49.5 million in the 2025–26 budget to underwrite these subsidies, aiming to spur the country towards its annual goal of 250,000 tourist arrivals.
However, the Economic and Finance Committee has questioned the subsidy’s effectiveness and alignment with Bhutan’s “high-value, low-volume” tourism strategy. “We have graduated from least developed country status,” stated Committee Chair Rinchen Wangdi. “It is contradictory for us to complain of budget constraints while subsidising a sector from which we should be generating revenue.”
Despite the committee’s reservations, the Ministry of Industry, Commerce and Employment maintains that the scheme has delivered a positive return on investment. Minister Namgyal Dorji highlighted that, between December and February, 4,236 Sustainable Development Fee (SDF)-paying tourists benefited from the subsidy. Of the Nu 49 million allocated, Nu 38 million was utilised, while the resultant SDF revenues exceeded Nu 1.4 billion.
“The programme has not led to any net loss for the government,” Minister Dorji affirmed, cautioning that it remains in its infancy and merits a full impact assessment before drawing final conclusions.
Nonetheless, MPs voiced concern that the modest subsidy was insufficient to draw high-spending tourists and risked sending mixed signals about Bhutan’s premium tourism model. The Assembly is set to formally adopt the committee’s recommendation at tomorrow’s session, effectively bringing the subsidy scheme to a close.
With the pending decision, stakeholders in Bhutan’s tourism sector now brace for adjustments to marketing strategies and fare structures as the nation reaffirms its commitment to attracting discerning travellers willing to invest in the country’s unique cultural and environmental offerings.
