Despite the fact that undercutting is thought to be rampant in the tourism sector, the Tourism Council of Bhutan (TCB) has, so far, investigated only one case. TCB cancelled the tour operator’s license in November.
Undercutting in the tourism sector refers to the practice of tour operators selling tour packages below the government set minimum tariff of US$ 200 for off season and US$250 during peak season per person per day.
At the 16th session of the National Council in December last year, the Economic Affairs Committee of the house reported that some Bhutanese tour operators sell tour packages at a rate as low as US$ 136 to US$ 146.
The committee’s review report on the country’s tourism policy states the practice could undermine the government’s High Value, Low Impact policy among others.
At Meet the Press session yesterday, Prime Minister, in response to a journalist’s question on tourism policy on curbing the practice of undercutting, said the current tourism policy is robust enough to prevent undercutting. “Our system is robust enough to prevent undercutting, but those who transgress, we need to catch them and who better can catch them than tour operators themselves,” the Prime Minister.
“I think there needs to be some sort of peer to peer oversight within the tourism industry so that they can report anybody who breaks the rules, breaks the laws in terms of undercutting. We take this very seriously. Even if you receive any complaints without evidence, at least, you can try to investigate. But better still if we have evidence based complaints.”
