The Kingdom of Bhutan reopens to tourists on Friday with a hefty increase in its daily tourist tax.
Before the country closed its borders in March 2020 in response to the Covid-19 pandemic, travelers to Bhutan had to pay a minimum package price of $200-$250 per day, depending on the time of year. The price often included hotel, meal, transportation and guide expenses, as well as a mandatory $65 sustainable development fee.
But in late June, Bhutan passed a tourism tax law that scrapped the daily minimum fee in favor of increasing the sustainable development fee from $65 to $200 per person per day.
Travel expenses – for example for hotels and meals – are not covered by the fee.
The country offers fee reductions to families, said Raju Rai, CEO of Heavenly Bhutan Travels.
“For children between 6 and 12 years it is 50% [old] and … free for children under 5,” he said.
“An Active Contribution”
Bhutan and supporters of the new policy say the move is in line with the country’s ongoing goal of attracting high-value, low-volume tourism.
To experience the country – famous for offering travelers a rare glimpse of authenticity in a world full of tourist traps – visitors must “make an active contribution to Bhutan’s economic, social and cultural development,” according to the corporate website of the Bhutan Tourism Council .
The Tourism Council said the fees will be used to improve infrastructure, train travel industry workers, preserve cultural traditions, protect the environment and create jobs with fair wages and working conditions.
Bhutan markets itself as the only carbon negative country in the world.
Andrew Stranovsky Photography | moment | Getty Images
Sam Blyth, chairman of the Bhutan Canada Foundation and founder of the Trans Bhutan Trail, said the fees would directly benefit local communities.
“The money raised from [the] The government will then turn back to the communities and support health and education, which is free for all Bhutanese,” he said.
Will travelers benefit?
According to the Tourism Council, travelers also benefit from the increased fees. Standards and certifications for hotels and tour operators will be revised, which will improve traveler experiences, it said. It also said travelers would have more flexibility in planning and booking their own trips.
The Tourism Council notes that the minimum daily rate for package holidays “had its limits. Tourists, for example, often had to choose from package tours offered by tour operators who controlled the travel experience for them [it] … Tourists can hire their desired service providers directly and pay for their services accordingly.”
Tour guides are no longer mandatory for all trips, but they are required for travelers planning to trek or go beyond the cities of Thimphu and Paro, according to the council.
Travel agencies that can obtain visas for travelers also collect payment for sustainability fees, said Sarah-Leigh Shenton, director of marketing at travel agency Red Savannah. “All the administration is done by our team and our customers don’t have to make any on-site payments.”
Critics versus supporters
Critics argue that Bhutan’s increased tourist tax is “elitist” by further closing the door on budget travelers dreaming of visiting Bhutan.
Even more say the new policy will disproportionately hit travel agents that cater to budget travelers.
Others have criticized the timing, saying the new rules will discourage travelers from traveling at a time when the country’s tourism industry is being hit by a 2.5-year border closure.
However, Bhutan’s Tourism Council said the pandemic is the right time “to restart the sector”. It also hinted that it might welcome a slow return of travelers, stating, “The gradual return of tourists will allow for the gradual improvement of infrastructure and services.”
Sam Blyth said he has trekked extensively around Bhutan over the past 30 years. He is the founder of the Trans Bhutan Trail, a non-profit company that has helped revitalize a 250-mile ancient trail that traverses the center of the country.
Sam Blyth, Trans Bhutan Trail, Visit Bhutan, Trek Bhutan
Wendy Min, Trip.com’s head of government for Australia and New Zealand, said she felt a hefty fee was needed to “filter out travelers and keep things manageable”.
“It’s not going to be ideal for a small country to open up fully because you don’t want Punakha or any of those cities to become the next Kathmandu,” she said. “I totally understand why people are put off by the price tag, but everyone is different and looking for their own experiences and memories.”
She called increased fees “the new normal,” citing Venice, where Italian officials have said day-trippers will have to pay between 3 and 10 euros ($3 and $10) to enter the country from January 2023.
According to a report released by Bhutan in 2019, for the time being, the increased fees will not apply to Indian tourists, who made up around 73% of all travelers to Bhutan before the pandemic.
But even that can change. Bhutan’s Tourism Council said the $15 daily fee Indian travelers pay will remain in effect for two years, noting it “will be revised at a later date”.
Blyth, who began visiting Bhutan in 1988, said he doesn’t expect the new fee to negatively affect interest in Bhutan once travelers understand it.
“Tourism in Bhutan has been restructured so that travelers no longer need to book through tour operators and travel agencies and can directly contact suppliers such as hotels, restaurants, tour guides and transport companies,” he said. “These services are inexpensive and … result in reasonable overall costs even with the new tourist tax.”