The loan deferment period for hotels is set to end in June. According to the Hotel and Restaurant Association, nearly 70 per cent of hotels are still not in a position to begin repaying their loans. The association is now urging the government to provide Economic Stimulus Programme (ESP) loans to affected hotels and to grant an additional one-year deferment on existing loan repayments.
Years after COVID-19 impacted the tourism sector, hotels across the country continue to struggle. Many, especially those three-star rated, are seeing only a few guests, leading to less income. There are currently around 400 three-star-rated hotels.
Now that the loan deferment period is coming to an end, the hoteliers are worried.
The hotel industry’s outstanding loan stands at Nu 13.5bn, borrowed by over 500 hotels.
To support recovery and revive businesses to pre-pandemic levels, the Hotel and Restaurant Association requests that the government make ESP loan available to the affected hotels.
Ugyen Tenzin, the chairman of Hotel and Restaurant Association of Bhutan said, “Regarding the ESP, what we have discussed is that the government could examine the system more closely. HRAB could assist by providing data on how much interest each hotelier owes. That way, the ESP loan could be paid directly to the banks to cover interest, instead of giving the funds to hotel owners.”
The association is also calling for an additional one-year loan deferment.
Hoteliers say the Sustainable Development Fee (SDF) of Nu 1,200 levied on regional tourists is hurting the industry.
They say the fee is deterring regional tourists from visiting Bhutan, prompting them to choose alternative destinations such as Darjeeling and Sikkim in India.
The chairman added, “Dollar-paying tourists receive a 50 per cent discount. We are hoping that, following our appeal, regional tourists will be offered a similar concession. At the moment, it’s too expensive for Indian families to visit Bhutan; one person ends up paying for the entire group.”
Currently, there are almost nine hundred hotels and restaurants in the country.
Additionally, the Royal Monetary Authority has suspended approving new loans for the construction of hotels in 2023.
Kinzang Lhadon
Edited by Sangay Chezom
