The government brought down the Sustainable Development Fee to 100 dollars three years ago, in 2023, providing a 50 per cent discount for international tourists. This revised rate is valid until August next year. Tour operators and hoteliers are now awaiting the government’s announcement on the fee, beyond the current sunset period.
Today, international tourists pay 100 dollars per person per night. Tourist numbers gradually picked up, and industry players say international visitors have now accepted the 100-dollar fee.
“I think in the beginning, when the policy was first implemented, there was a lot of discontentment, not only within the country but also among our partners outside. It was very difficult to sell. But now, slowly, as the years go by, I think the present new policy has more or less stabilised,” said Kinley Gyeltshen, Proprietor, Gangri Tour Operators.
However, with just eleven months left, tour operators say the government needs to act soon.
“I feel it’s more important that we should now come up with a decision. Because the faster we have a decision, the more important it is for us, because the sunset period, like you rightly mentioned, is just one year,” added Kinley Gyeltshen, Proprietor, Gangri Tours and Travels.
“If you look at the European destinations and other areas, they sell five years in advance, six years in advance. They plan so well from that time only. So, I was surprised to see their 2029 and 2030 deposits already up. And they were asking me, “ Where is Bhutan? We were not able to give the costing for this long,” said Raju Rai, CEO, Heavenly Bhutan.
The industry needs at least two years’ notice before any changes are introduced, giving operators enough time to communicate the changes to their clients.
“The SDF of USD 100 is set to be revised on the 31st of August 2027, which is a little less than a year from now. Especially for Bhutan, being a long-haul destination, packages are sold way ahead of time, say two to three years ahead of the actual travel period. Any revision on the SDF should be communicated sufficiently in advance, which will help our tour operators as well as the international partners to promote Bhutan effectively,” said Thuji Pem, Executive Director, ABTO.
The Sustainable Development Fee is a key component when tour operators work out their packages. They have been able to finalise packages only up to summer of 2027 for now.
BBS contacted the Department of Tourism a month ago, but to no avail.
And now other hoteliers are also hoping for a review of the Nu 1,200 fee for regional tourists. A 2022 notification said the rate would remain in effect for two years, after which it could be reviewed and revised.
The country has around 300 three-star and lower category hotels, many of which mainly cater to regional tourists.
The figures show an increase in the number of tourists. However, three-star and lower-category hotels continue to struggle with limited guests and cash flow.
“For three-star hotels and below, 90 per cent of our guests are regional tourists. They are all Indian. The 100 dollar-paying tourists are those who are staying at four-star and five-star hotels. We have heard that the business for those hotels has been going well and that the guests are also coming. For three-star hotels and below, the number of guests coming in is also low,” said Ugyen Dorji, Proprietor, Hotel Ugyen.
The Hotel and Restaurant Association of Bhutan says the revised fee implemented after the pandemic has brought in more responsible and quality tourists, helping to fulfil the goal of the high-value, low-volume tourism policy.
The Business Regulatory Review Report 2026 also recommends a more flexible SDF system. Tourists could pay lower fees or get discounts for visiting less-popular destinations beyond Thimphu, Paro and Punakha.
The report also calls for the SDF policy to be finalised, to provide greater certainty for tourism operators and international markets.
The tourism industry is now looking for clarity on what comes after August 2027. An early decision would allow them to plan, price and market Bhutan well in advance.
Sonam Yuden
Edited by Tandin Phuntsho
