Bhutan halves tourist fee to $100 per night in bid to boost economy

Bhutan, the world’s first carbon-negative country, is slashing the tourist fee to boost its economy by attracting as many visitors as possible. It is all set to halve the $200 daily fee from September this year, in a bid to revive the country’s tourism sector still reeling after COVID-19.

Bhutan ended its Covid restrictions two years ago but introduced a tourist fee of $200 per visitor per night under its "Sustainable Development Fee" programme. It justified the increase by saying that the money would go to offset the carbon generated by visitors.

New tourist fee model in Bhutan

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As reported by Reuters, the new rate of $100 per night would come into effect from September and last for four years.

A government statement issued Friday (August 25) said, “This is in view of the important role of the tourism sector in generating employment, earning foreign exchange ... and in boosting overall economic growth."

Bhutan’s long-term goals

Bhutan is working to completely overhaul its tourism sector. It wants to increase the contribution of tourism to its $3 billion economy to 20 per cent from the current 5 per cent.

Dorji Dhradhul, director general of the Department of Tourism, said the halving of the fee could boost arrivals in the September-December peak tourist period, which includes many religious and cultural events in the mainly Buddhist country.

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In June, the government relaxed regulations for tourists seeking to stay longer in the country, yet there has not been a rapid increase in arrivals.

According to Dhradhul, Bhutan has welcomed over 56,000 tourists since January. However, around 42,000 of them are Indian nationals, subject to a fee of just 1,200 Indian rupees ($14.5) per day.

The tourism sector in Bhutan employs approximately 50,000 locals. It used to generate about $84 million annually in foreign exchange before the pandemic struck.

Why Bhutan charges tourist fee?

In an effort to protect the integrity of its mountains, Bhutan has refrained from permitting mountain climbing, underscoring its long-standing concern about the consequences of mass tourism.

Consequently, the tourist fee has restricted the influx of visitors to those willing to spend more, thus forming only a small fraction of the volume seen in neighbouring Nepal.

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