Hotels rated four-star and below, certified by the Department of Tourism, will soon receive a five per cent interest subsidy on their existing loans for one year. The government has set aside Nu 850 M from the Economic Stimulus Programme. The Royal Monetary Authority (RMA) is working with banks to implement the subsidy. According to the Industry, Commerce and Employment Minister, this is to support businesses affected by the COVID-19 pandemic.
The government will provide a four per cent interest subsidy, while banks, in coordination with the RMA, will offer an additional minimum one per cent reduction.
Industry, Commerce and Employment Minister Namgyal Dorji said that the scheme does not involve new government loans.
“This is not a loan being provided by the government to hotels. The hotels are already paying interest on loans they have secured. The government is now supporting them with a four per cent subsidy on their loan interest.”
He added that the RMA is working with banks to ensure the additional reduction.
“The RMA is working with banks, which are taking responsibility for a minimum of one per cent reduction. For hotels with existing loans, the government provides a four per cent interest subsidy, and with banks contributing one per cent, the total relief comes to about five per cent,” added the minister.
The minister said hotels are expected to reinvest the savings to improve services and create additional employment, contributing to the recovery of the tourism sector.
According to the 2024 Labour Force Survey, accommodation and food service activities employed more than 17,000 people nationwide.
There are about 240 Department of Tourism–certified hotels rated four-star and below across the country. However, not all hotels qualify for the subsidy. Those with Fixed Equated Instalment Facility accounts, non-performing or charged-off loans, bridge or concessional COVID-19 loans, and loans under litigation are excluded.
The minister said authorities may assess some cases individually, provided borrowers have continued loan repayments.
Five- and six-star hotels are also excluded from the scheme, as they are considered more financially resilient and have better access to commercial financing.
As of September last year, hoteliers owed nearly Nu 12bn to financial institutions.
BBS is yet to receive a response from the Hotel and Restaurant Association of Bhutan on the matter.
Kelzang Chhophyel
Edited by Sangay Chezom
