The Opposition Leader called on the Minister of Economic Affairs, His Excellency Lyonpo Khandu Wangchuk, yesterday to express the Opposition Party’s concerns on the Royal Government’s recent policy decisions on tourism. The Opposition Leader reported that, after studying the Royal Government’s Executive Order of 13 November 2009 and consulting a wide range of people, representing a cross section of society, the Opposition Party has concluded that:

On the Royal Government’s decision to “Roll out of the integrated channel, price and supply policy that liberalizes the minimum package price and mandatory package via tour operator requirement…”

  1. Liberalizing the tourist tariff will undermine the positive brand image that our country has carefully cultivated and enjoyed over the last three decades. Most foreigners, including those who have never visited Bhutan, perceive Bhutan as a high end, exclusive destination. They consistently applaud the existing tariff policy as responsible and sustainable measures that are also in line with the principles of Gross National Happiness. Liberalizing the tourist tariff, even if it actually amounts to increased tourist spending, will harm Bhutan’s brand image.
  2. Liberalizing the tourist tariff will eventually result in unsustainably large inflows of budget travelers causing social problems like drug abuse, prostitution, begging and stealing. Large inflows of tourists will also threaten Bhutan’s unique culture and traditions, and the country’s fragile environment. A target of 100,000 tourists per year by 2012 may be unsustainable and undesirable, given the country’s existing absorptive capacity and small population base of barely 600,000 people, most of who still live in scattered communities.
  3. Liberalizing the tourist tariff will not necessarily guarantee increased numbers of jobs as no one seems to have a detailed understanding of the current employment scenario in the tourism sector. Most of the workers in the tourism industry are “under employed” and immediate priority should be to generate more productive work for them;
  4. Liberalizing the tourist tariff could decrease the Government’s direct foreign currency earnings, as tourists would be required to deposit only the “royalty” to the government; and
  5. Increasing tourist numbers in a responsible and sustainable manner is possible, without liberalizing the tourist tariff, by spreading tourist arrivals throughout the year. In 2008, the months of March, April, October and November accounted for more than 61% of that year’s total arrivals. If, on average, each of the remaining months performed equally well, total arrivals for that year would have more than doubled. Tourist arrivals for those months are low because of poor marketing efforts, not existing tourist tariffs;

On the Royal Government’s decision to mandate “…all hotels catering to tourists to upgrade to at least 3 Star category”:

  1. By this policy, all tourists would be required to stay at hotels that have a minimum of 3 Stars. If this is the case, the actual minimum daily expenditure of a tourists amounts to royalty + 3 Star hotel + food + guide + transport. Even at very conservative prices, this would exceed USD 230 per night, and this would represent an increase in tourist tariff, not a liberalization of the tariff.
  2. Most hotels currently catering to tourists will not be able to upgrade to 3 Star levels. Investments required for the upgrade will be high, and most hoteliers will not be able to develop the financial and managerial capacities to recover the additional investments. Hoteliers outside Thimphu and Paro will find it particularly difficult and risky to upgrade their hotels, thereby depriving other parts of the country, especially the Eastern region, of the benefits of tourism.
  3. While it will be almost impossible to ensure that tourists actually stay at 3 Star hotels, this policy also undermines the development of lodges and farmhouses.

On the Royal Government’s decision to “…re-allocate the proceeds collected in the Tourism Development Fund by November 2009 to support Destination marketing budget requirement (of Nu. 26 million) for the year 2009-2010.”

  1. Though the TDF is owned, in equally parts, by TCB and ABTO, the Government has so far not matched the contributions of the tour operators as was intended during the establishment of the Fund.
  2. The use of the Fund’s proceeds should not be decided unilaterally. Instead, after the Government has made its “matching contributions”, the Fund should be operated jointly by TCB and ABTO and used to promote marketing, develop products and enhance innovation in the tourism sector.

The Opposition Leader reported that the Opposition Party is prepared to participate in discussions aimed at reviewing, revising and formulating policies for the tourism sector, and assured the Royal Government of its fullest support to protect Bhutan’s image as a high end, exclusive tourist destination.

The Opposition Leader submitted the following proposals to the Minister for Economic Affairs for the Royal Government’s consideration:

  1. That the Royal Government rescind its order of 13 November, 2009 to liberalize the tourist tariff;
  2. That the Royal Government increase the tourist tariff to USD 250 per person per night in accordance with TCB’s Announcement of 1 August 2008, the implementation of which was “differed till further notice” by TCB on 9 January 2009 to ensure that the global recession would not affect the tourism industry;
  3. That the Royal Government repeal its order of 13 November, 2009 requiring all hotels catering to tourists to upgrade to at least 3 Star level;
  4. That the Royal Government repeal its order of 13 November, 2009 reallocating proceeds of the Tourism Development Fund; that the Government make good its “matching contributions”; and that measures be introduced to ensure that the proceeds of the TDF are used effectively for the purposes, and in accordance with procedures, enshrined in the Tourism Development Fund Management Committee Constitution;
  5. That the Royal Government review its “aspiration” of achieving 100,000 tourist arrivals per year by the end of 2012, given that a 62% annual increase in tourist arrivals compounded over the next three years may not be sustainable or desirable;
  6. That the Royal Government introduce immediate measures to spread tourist arrivals throughout the year, and increase tourist arrivals significantly during the eight months (excluding March, April, October and November) which together account for barely 40% of the total arrivals each year;


Facebook Comments:


  1. Everyone we know are in support of the opposition party. Is the government’s decision based on any acceptance by certain section that I am unaware of. Is the government allowed to make such decisions without any popularity for it’s credence and is there a mechanism for inquiry and prosecution if the such decisions fail?

  2. I am with you on this one. I also think that the govt. should cut down the royalty from 30 percent (it is a BIG chunk to take from these businesses) and I also think that the 40 percent charged on individual travellers, instead of groups, is stupid.

    I hope this goes through. Good luck

  3. Thinley Penjore says

    I support OL fully on this particular issue. After carefully studying the argument/reasonings of both the government side and the points raised by OL on the issue of liberalising tourism tarrif, I find the points raised by OL highly relevant and therefore I join OL to request government to rescind their decision. Otherwise, I am afraid it will be a big failure. The DPT government seems to be rushing too fast with decisions not supported by proper research & analysis. It is a risky business and may cause irreversible damage to the nation. Not only this issue, but other issues related to over exploitation of hydro power resources is also a cause of concern which not many people may not be aware of at this point of time.

  4. Bravo, bravo. I truly believe you are right on the money with each point here. I can only hope that with your leadership, the RG’s plan is steered in this direction.

    I don’t think $250/day is too much to ask for a daily rate if the tourist arrival numbers increase at the present rate and as long as Bhutan can maintain its uniqueness and authenticity.

    As for the seasonality of tourist visits, there is a major misconception about when foreigners can visit. In planning my own trip, I was under the impression that bad weather prevented tourist groups travelling within Bhutan outside of March, April, October and November. The TCB needs to improve the information available to potential tourists in order to better distribute numbers throughout the year.

  5. Dear OL and other writers,
    Thank you for sharing the valuable information. I share similar thoughts as Thinley penjore. I am but deeply saddened by the decision the DPT government has taken. It appears to me that the government is heading towards a dangerous zone. I am studen of social science and learnt a great deal on the impacts of tourism. My professors of sustaiable tourism applaud Bhutan as a “wise” country and my fellow mates are amazed at the policy which is non-exixtant anywhere.

    I think a time will come when we will cry over the spilt milk just because of the decision taken by our wise “leaders” of the first generation Bhutanese democracy. We are still at the cross road, things can be different by changing our minds. The road not taken will bear the best fruits and time will not come where we have to repent and curse ouselves. I am really concerned so are many Bhutanse. We are happy with what we are now. We dont want more. We have potential in hydro power, so why are we looking at tourism. I am apprehensive of it.

    In nutshell, call off the decision. “Sampa ngyen la tang na khepa dang, Guedpa shu lay ke na ‘dud do’ kugpa in”.

    A concerned citizen

  6. My 100% support with OL and I don’t buy DPT’s idea to liberalize tourist tariff. I read an article on kuenselonline “liberalise tourist tariff + highend tourism” I don’t get the logic. So, if we want to bring the cost down to produce more, the quality shouldn’t matter, I mean seriously they need to study business 101, econ 101. I agree with Thinley Penjore that DPT government need to do some research and really find out why people love to visit Bhutan. I know lot of passionate travelers and everyone believes that we are risking longterm for a short term benefits. Forget about job creation, many small tour companies will bleed and only the major overseas budget travel companies will gain from this. The negative implications are infinite, SAD!

  7. For once I support what the government is doing. Till now, what the restricted tourism did is prevent new tour operators from entering the market. It made Etho
    Metho’s and BTCLs the kind. Even the hotels and tourists does not have any say in customer satisfaction because the tour operators decide where the tourist should be staying. It all depends if you want the old tourism company to control tourism in Bhutan forever.
    With liberalised tourism policy , everyone has the opportunity have a share of the pie. The hotels and other tourism related business can improve their service while the tourist can decide who they want to give their business to.
    All the impact on culture and environment are nothing but fear tactics by those who want to maintain status-quo. If they are really concerned about culture and tradition those big players would donate some of their profits to places they degrade.
    Besides lots of countries have managed to attract a lot of tourist through liberalised tourism while successfully preserving their culture and tradition.

    • Even with the new policy. If all hotels are to be 3Stars for tourists. We will have only rich people’s lodges and hotels. no common man and woman can build and operate 3Star hotels..

    • I respectfully disagree with you. The present tourism policy is the best policy for small tour operators and ordinary entrepreneurs. Under the existing policy, it’s very easy to start a tourism business. Look at how many guides have started their own tour companies.

      With the new policy of mass tourism based mainly on price competition, it will not only make it difficult for ordinary people to start a tourism business it will also drive most of the existing small tour operators out of business. And eventually the whole tourism industry will be owned by few rich people who directly or indirectly owns a network of 3-star hotels and fleet of buses and tourist vans, and other infrastructure etc.. How can a small tour operator compete with companies owned by rich people? That’s why most tour operators except few big ones like Norbu Bhutan, Tashi Tours, and Intertrek, are against the new policy.

      This is good politics but bad policy for the nation in the long run.

  8. I am glad that many of the posts here ttalk against liberalizing tourism in Bhutan. I am also of the same thought that Liberalizing will jepoardize Bhutan by attracting mass tourism which will erode our culture, tradition, environment etc etc.



  9. After reading the comment of Truth my mind is kept open for points in favour of liberalisation as well. Earlier I was totally against liberalisation. It is important to get a true picture of both risks and benefits. I certainly agree on the point about why services do not improve…no customer choice. I heard that even a tourist car driver and guide can influence a lot in deciding to which hotel to take and eventually the success or failure of business. Therefore, the real driver of business. We all know from public transport drivers who decide and stop at the hotel they feel confortable for various reasons. Could a similar reason be the cause why some small handicrafts shops cannot survive in the market? I heard that some hotels make good money because they are able to convince the guide and driver. Others may to agree or disagree on the above seemingly-true rumours. BTC might look at these small but certainly relevant points.

  10. I am glad that the OL leader brought this issue on light. I would like to directly respond to “Truth” because what he said was absolutely untrue. I thought all the fear tactics and status quo words were overly recycled during the US election and it looks like “Truth” really followed what was going on in the US not in Bhutan. Otherwise, it is quite irrelevant when we discuss about the current issue. I am sure most will agree that the first privatization initiative about the tourism and the changes to tourist tariff were perhaps necessary and an excellent approach. The direct consequence of such initiatives gave birth to the existing tour companies in the nation. They vigorously compete on their product differentiation and customer services ( almost all tour companies websites talk about why they are different). What “Truth” said about tour operator decides and tourist have nothing to say, again this is not true. Let me say why, most tour operators when they first initiate the itinerary, they discuss about hotels, places, and everything, they will inform guests about the accommodations as well as the contingency plans. The bottom line is they will try to fulfill the clients interest and provide the best trip possible. Definitely, drivers and guides can influence to some degree but not to often though. I think “Truth” is trying to portray tour operators as an evil and the liberalize tourist tariff or should say budget tourist tariff as the savior. Also, the notion that mass tourism will not affect environment, culture and society, it only makes me laugh. Does it makes sense to promote GNH and on the other hand to lobby for mass tourism in the country. Anyways, I am neither tour operators nor anti-DPT, I am just a concerned citizen and only want good things happening for us and to our country that we all dearly love.

    • Dear Chhophyel,
      You might have some truth in what you write, but the fact of the matter is you cannot stop change. Change is inevitable in most things in life, the only thing we need to make sure is we change for good. You keep on saying GNH, the definition of GNH itself if gross national happiness, not product, if that is the case why are we charging such high tourist tariff, or are we contradidicting outselves. In current situation, we are saying GNH is only accessible to people who can afford it. GNH is accessfible only to people who can pay $200 a day.
      I am sure the tour operators will try their best to fulfil their customer needs, but you cannot deny the fact that they offer only certain package and they have to choose one hotel per group. You also cannot deny the fact that if some tourist wants to stay alone and eat whereever they like, they do not necessarily have the choice to do so. I have read various tourist say that they are treated to same buffet crap everyday.
      You also cannot deny the fact that hoteliers have to suck up to tour operators to get business, instead of customers.
      One more thing $200 a day can be cheap of expensive depending on what country the tourist comes from. If they are from US, Europe and Japan, $200 a day might be peanuts to them. In most countries just the hotel charge is more than that. So if we let them have their choice most might spend more than $200 a day.
      You also cannot deny the fact that most tourist would like to try out local restaurents , bars, etc given the choice, which mean the spill over benefit is really high.
      They might use our taxi’s interact with locals, etc instead of just guided tours they might like the freedom of finding out first hand.
      Going by your thoughts imagine what our country would be like if our third king, decided we should remain secluded from the rest of the world, fearing it might erode out tradition and culture. We wouldn’t be where we are at right now. We would be living under a rock in 15th century.
      So in the end if the benefits outweighs the rick, there is no reason not to go ahead with change.
      Evryone keeps on pointing out Nepal, but we are not Nepal. We don’t have to copy what they do, instead copy coutries like Switzerland, Bahamas, Hawaii in US, so we can share our beautiful country while spreading the benefit to all Bhutanese and keeping tourist happy.

      • The two most important pillars of GNH are our unique culture and our rich environment. You just look at Nepal to see what mass tourism does to the nation’s culture and environment. The impact will be much bigger in our case, as we are a small country with such a small population. Moreover I don’t think our people will be happy in a society where rich people become richer and poor remains poor, and where economic opportunity and government policies benefit only a lucky few at the top.

        You are right “Change” is inevitable. But we must manage Change and not let Change manage us. Otherwise we may blindly move in the wrong direction and by the time we realize it will be too late. The existing tourism policy once changed will be irreversible. The damage done will be forever. Bhutan’s image as an exclusive, special destination will be gone for forever. And whatever we have achieved so far in pursuing a visionary tourism policy and putting a system in place will be undone.

        Yes, we are not Nepal. But if introducing mass tourism isn’t following Nepal, what is?

  11. Some interesting discussions are taking place here and I surely appreciate the efforts of our LYONPO OL in analyzing the situation about liberalization of tourism in our country. The Issue “It is easy to see why BHUTAN is fast becoming one of the most popular tourist destination in South Asia. Visually stunning, it sums up quixotic images of every man’s Himalayan wonder: gilded temples, lush paddy fields, exotic foods and gracious, smiling people. Land of Smiles is a common description of Bhutan”. Bhutan has much to offer – from beautiful untouched mountains in the north for trekking among the mountain tribes to unexplored jungle safaris in the south to offer in the near future. The very fact that we charge a high minimum fixed tariff has led to travellers becoming curious about this landlocked country and has gradually led to a major increase in the number of tourists over the years.

    However, if we were to liberalize tourism and promote mass tourism, then the negative environmental, cultural, and biological impact of tourism will increase without a doubt.

    BHUTAN is a country with a population of roughly just 600,000 people and a land size of barely 37000 square-kilometers, or the equivalent of Switzerland. With liberalization, we may attract more tourists but at the same time,Bhutan will suffer from many of the negative aspects of tourism, including “prostitution, drug addiction, AIDS, erosion of traditional values, increases in the cost of living, unequal income distribution, rapid increases in land prices in some locations, pollution, and environmental degradation” all the effects of mass tourism. We will have From the destruction of our landscape and serenity due to waste dumping by hotels and restaurants, as well as the uncontrolled building of tourist facilities into remote villages, there will be deterioration of local culture in the hill tribes of the North, to the slavery of young children and women in the DRAYANGS with its own ill effects that can be seen as fast approaching a crisis situation and many positive aspects of current high end tourism will be overlooked for economic reasons. This notion will eventually lead to very intense exploitation of the resources even within protected regions. Most of the development will be neither carefully planned nor monitored, so that within ten years the beautiful mountains and picturesque villages of the nation will be overrun by concrete bungalows and hotels, video and ‘girlie’ bars etc. Come a time like this – the tourism boom that we currently enjoy due to the high end BHUTAN brand will eventually end.
    Also, with liberalization and proposed government tourism policy of allowing 100%FDI to 4 star hotels, it is just a matter of time when most tourism business owners will be outsiders who will move in and become residents when tourism starts booming but sadly once the environment & culture is degraded and when the country is destroyed and profits decline – the business will suffer and they will just leave.

    Our country and the tourism industry is very important to us Bhutanese. Thus, to promote tourism into the future, greater efforts must be made to implement environmentally sustainable tourist policies and programs and not just free tourism to attract mass tourism to attaijn some short term gains.

  12. Talking about GDP, we cannot put all our eggs in one basket, with almost 90% of our GDP coming from hydro, we need to look as a lot of what-ifs. what is India decided they do not want to import our power, where do we get money from. we need to think about diversifying our income generators.
    A country cannot rely just one industry.

    • But do you think that open tourism policy like the one that they have in Thailand and Nepal is better for GDP?
      90% of the income might come from Hydro. But if its time to fail, even tourism fails and it fails miserably. Thailand has several occasions of tourism downturn during the SARS, strike against the government and the recession now. Its not a sure gotey as well..

      • Who said we have to copy the failed policies, we can copy the successful ones. Stop trying to look at a glass as half empty.
        As much as there is failed policies, there is equally successful ones.
        If the world is filled with people who do not want to try new ideas, then there will be no scientific, cultural, economic , advancement. There is risk associated with anything we do, but as Michael Jordan said, you miss 100% of the shots that you don’t attempt.

      • But what if the shots that you do take, lands you in a shithole?

      • But the question is do we really need to rush towards “scientific, cultural and economic” advancement. Who are we trying to ape? Whatever happened to our Buddhist and GNH values of restraint, cautiousness and moderation?
        Our recent obsession with economic growth conceals the fact that we as a unique society, a society which have challenged the very notion of development and progress of the contemporary world, which have placed spiritual well being above everything else, are accepting defeat. In accepting defeat we are also diminishing ouselves as a human being.

        It will be sorry to see my country, which might probably be the last in world to be untouched by the wave of consumerism, slowly being engulfed. We might lead more comfortable lives but we will be drifting further from the principles of our enlightened sages and forefathers.

  13. I thought our country was about giving more importance to GNH than GDP. It’s quite obvious that removing this tourist tariff would only benefit numbered people, while the overall happiness of our populace is at jeopardy. I thought GNH was about a balance between materialistic and non-materialistic components of happiness. So why the hell is the government tending to policies that only lead to increment of GDP (and income of a few people) when everyone knows that our population is not prepared for the influx of tourists that may occur once this obscure policy is implemented. I mean, this is really not healthy for GNH and Bhutan’s economic cycle in the long-run. We cannot afford the extreme ups and downs in our economic cycle.. we’re still a freaking developing nation! It’s detrimental!!! The whole “only hotels with 3 starts are allowed to keep international tourists”. How the hell is that going to make more people happy when people are getting economically discriminated? And think about our culture! As it is, we’ve pretty much succeeded in steering Bhutanese teenagers into the western culture and littering pilgrimage paths that were once pristine. There are just too many externalities under the shadows of this idea!
    If lifting the tourism ban is promising us a happier nation, then how do you explain it disappointing all the 4 pillars of GNH????
    Even I, a high school student, can see the height of stupidity this tariff-lifting decision has reached.
    I really hope the Opposition Leader can knock some sense into the government.

  14. Good job everyone.. I am so proud of my fellow citizens… i think this is exactly what we need and these are values we need to cultivate.. being able to analyze, question and argue… I think the DPT should consider both arguments and then come up with best possible tourism policy that will not only flourish tourism in Bhutan but also allow the niche to remain …. How do you do that? I think if they care to listen and read … there are some very good alternatives in this discussion forums. It might be very good to consult with other stakeholders too…. and ask the public what they want in the eastern Dzongkhag..they might not want hundreds of foreigners flocking thier villages ..i think that’s fair…

    I saw an article about the Guides Association of Bhutan… they are the once who work directly with the clients…. and so they have the knowledge that Mc KInsey or the TCB doesn’t have… it might be a good idea to see what sort of feedbacks they get from the tourists…. .as i speak to people …most of them believe liberalizing tourism in Bhutan might just not be a good idea… today or at any times in the future…. people pay 200 dollars because they find it is worth to pay that amount of money in Bhutan… i think its okay not to meet international standards for hotels at all places in bhutan.. that I believe is also one of the charms…what they want is to feel Bhutan not get Americanized or European version of Bhutan….. i hope Mckinsey doesn’t suggest Starbucks or Mcdonalds in bhutan as the next toruism attraction because some people in the west also happen to love coffee…

  15. Truth! I don’t think I have the time in the entire world to disagree with you. I am sure you maybe intellectually strong but on this current issue you are darn wrong. You mentioned about half empty glass, putting eggs in one basket or diversifying the products and lot of yada yada, lots of yapy yapy from you.Well, last I checked ABTO did an excellent job so far, Tourism was right behind Hydro and even today government tries to explore in other industries such as IT. I wonder where you have been all this time. Also, we all know who Michael Jordan is and what he can achieve,so your quotes metaphorically appropriate to motivate someone, but we are not talking about winning and losing game. The current issue has a lot more on stake and we don’t have right to take future generation for granted. Even the majority of tour operators and guides association disaproves this idea, so I am sure their knowledge ins and out about the tourism industry is unequivocal. The proposal talks about categorizing hotels such as 3 stars, 4 stars, I think the avid travelers doesn’t really care what stars of hotel are in Bhutan. They like to visit Bhutan for so many reasons and wants to experience it, so techiically we are selling experience for them. I hope our learned cabinet members and policy makers will listen to the voices of many and not to McKinley who are able to put a rhetorical proposal based on their wishful thinking!

  16. Dremten Drukpa says

    Liberalizing the tourist tariff will happen. It is only a matter of time. This cannot be stopped. If it does not happen now it will happen few years down the line. This is the natural road. Anything against it is only a temporary measure.

    Tourists guides and some tourists operators may opinion that “liberalizing the tourist tariff” is no good. It is only because they are used to the status quo. Rememeber, one time in history, the almost all Germans thought Jews deserved to be ostricized.

    At this age in time, all the countries have open tour policy (except for North Korean and the likes). Our country will not go down because we have the same ploicy as rest of the world. So I support liberalizing the tourist tariff. It is time that we shift from being “exotic” to being “normal” like everyone else.

  17. Based on the recent media report, if ABTO (which represents the tour operators), believe that the government’s objective can be achieved by increasing the tariff to US$250 per day with the existing visionary policy of the K4’s government, which has earned worldwide admiration, why is it that the government is once again so determined to bulldoze this new policy:

    a) Are they too afraid to oppose Mc Kinsey’s proposal, even if it doesn’t make sense?
    b) Are they trying to fulfill the greed of some big tour operators like Norbu Bhutan, Tashi Tours, Intrek, etc.?
    c) Do they want to change the existing policy just for the sake of changing the policy?
    d) Is it just plain politics that we do not understand? Why 2012?

    I also find it difficult to understand why the government did not consult the stakeholders before serving the Executive Order. If the government has already made up their mind, is Lyonpo Khandu’s meeting with Tour Operators and PM’s forthcoming consultation meeting with the stakeholders just a damage control measure or politics? There are so many questions with no answers from the government.

    The government says that more employment will be generated. But unless we first survey the existing employment in Tourism sector, no one will be able to believe the government when they say that they have generated additional employment in 2012. There will be no credibility and no basis.

    Most important, why is government hiding the Mc Kinsey report? Why are they not making it public? Even our draft constitution was posted online for the whole world to see and to share ideas and comments.

  18. Dremten Drukpa,

    Thoughts like yours will do more damage than good to the country in the long run. Probably you are someone to profit from the McKinsey’s proposal. Do you really think the quality of life will be better for us Bhutanese when we are outnumbered by hordes of tourists in our own land? Why is it that we always tend to identify progress with the amount of money we make? Isn’t LJYT contradicting his own talks about GNH and blah blah. It now appears as if the whole GNH thing is a sham.

    If you look at most third world countries which are shamelessly trying to imitate western society, they are losing their individuality in the process. Material preoccupation, which forms the very basis of current world civilization, will override any other higher aspiration such as the need to be in harmoney with ourselves and with the environment.
    So I sincerely hope and wish that the government, before deciding to jump on the bandwagon, give a lot of thought and involve a whole lot of people in the consultation process. Liberalization may not be a good idea.

    • Talking about material preoccupation, I think we are already catching up with the west. It’s already entrenched in the mindset of our people. Take for example myself, I drive a rather old maruti car, not because I cannot afford nicer cars but just out of preference. When I drive around the town nobody would even glance at my direction. Occasionaly I get to drive my uncle’s big shiny toyota. And lo! I am a head turner. The looks of envy and admiration seem to come from all directions. It was so funny i couldn’t help giggling to myself.
      Anyway coming to the main point, I feel change like this is inevitable. And it would be a hopeless attempt on our part to resist the overwhelming force of globalization.

  19. Can OL tell us whether or not the tour operators are already practicing the proposed policy changes by engaging in undercutting the tarrif or not? It is an open secret and one that ought to be brought up in discussions such as this. Why don’t so called “brave” journalets like Tenzing Lamsang do an investigative article on this issue. If undercutting is in fact taking place, then the proposed policy is only helping to make it transparent so that all trevel agents have a level playing field. Tourism should not be equated to tour operators – it is a sector that cuts across all other sectors and the new policy definitely recognises this aspect. It takes in to account the transport, communication, hospitality, environment, agriculture, energy, culture and social sectors. From the taxi driver waiting at Paro Airport to the small eatery in Thimphu to the yak herder in Lunana, tourism stands to benefit if planned and managed properly. Right now, this is not the case and the whole industry is dominated by a few large travel agencies.

  20. Mr. Viewer says

    Dear OL,
    We are glad that at least we have some one at the virtue to stand for the nation and its people not like the govt. policies right now with out any discussions with the public taking decisions. Remember we are no communist country but a democratic nation. Would be rather beneficiary if the royalty is reduced rather then hampering the structure of the tourism industry with unnecessary decision.
    Dear friends lets be proud that we at least have a approachable O.P though the community is extremely small. Lets be lucky if at the next election that O.L takes over for some positive changes rather then the rush and ramp of the ruling party now.

  21. Dear guests,
    I don’t cosider myself to be smart of dumb, but I did some research related to tourism and I do know few things about tourism.
    Ofcourse the tour operators and guides are not going to like it, because they will be forced to compete , no more automatic tourist for them.
    All I am saying is in order for there to be good service, there needs to be competition.
    I already gave example of Hawaii in US. They still maintain their culture and tradition while making lots of tourist dollars.

    • All your argument in this post gives a good indication of the quality of your research.

      Please stop comparing apples to oranges.

    • I stand fully behind the governments decision to liberalize the tourist tariff. In a democracy what is required is a level playing field which the DPT government is providing in this case. Also, like someone said Bhutan needs to be treated as a normal place instead of some museum piece. So we need to allow more normal people to come and enjoy our culture and traditions instead of only rich people. I also find it strange when the OL says that he is not sure how this new policy will guarantee the creation of more jobs. You don’t have to be a rocket scientist to see that with this deregulation in the tariff, more visitors will come which will obviously translate into more jobs, that too across a wider cross section of our society.

      In regard to the fear that social problems may arrive with a greater number of visitor arrivals, in all probability it just may happen that our bad habits may actually influence them instead. The message is that we get our house in order before accusing others of bringing social problems into our country.

      As for people who equate tourist tariff liberalization with GNH, they all just want to sound politically correct. My take is that this plicy will actually contribute to GNH.

  22. i am tried of Mckinsey. who the hell he is. everyone talks about him, newspaper,and blogger. is he DPT’s MP? or one of the cabinet members of DPT government? this is because he is powerful and his decision were executed and accepted wholeheartedly-
    i did not see mr Mckinsey’s photo on voting machine in 2008 and i did not hear his manifesto. i am tried of Mckinsesim.
    liberalizing tourism in bhutan was started by him… paid by DPT. i absolutely disagree with it. why should bhutan? enough tourist visit bhutan making tourism second revenue generating engine after hydro-power.
    aims for 100000 tourist is an ambitious plan when bhutan has just 634794 people…
    what is idea of it…. increase population of bhutan to 734794, so that more country could donate money— happy for us and good to DPT… many promised fulfilled.
    before they pay Mckinsey to write their manifesto.

  23. Wow, Its great to learn so many view points. Let me give you a true scenario of the tourism industry in Bhutan.
    1. Yes, we have a handful of big tour companies that take the major chunk of the business. This had been possible because they were started by those office bearers and staff of erstwhile BTC(RGOB undertaking)and they had the right link to all the tour agents abroad. However of lately we the small tour operators(new comers to this business) have managed to compete in terms of services and a lot of agents were dislodged from these bigger companies and have joined the smaller companies. In fact there had been movement of agents back and forth for several reasons(accommodations,food, cars, guides,etc). But this trend was more or less killed by undercutting of tariff by some companies which still remain unchecked. Have you heard of TCB penalizing any tour company despite rampant undercutting practices? If anybody wants competition in this business, TCB would have to make sure that there is no undercutting. I would appreciate it if Mackisy could come up with a software system that could curve undercutting. Without a systematic monitoring, no human officials can penalize the defaulters because, by virtue of being in a small society we are all related either through friendship, blood or marriage. Ultimately, we all become corrupt.

    2. I think our government taking away $ 65 from the tariff is a fair deal as this had been the case since long ago. I personally wouldn’t mind even if the government raised the tariff. It will be even more attractive for the visitors.

    3.In regard to Tour operators making easy money in the present system, It is not justified. Just do your simple calculations; After deducting the royalty we are left with Just $ 135 from which we have to meet the expenses for accommodation ($55), food($21), transport ($32), guides($21), tds ($2.7) etc and there are other unforeseen expenses such as gifts, treats etc. So, approximately $ 132 is spent on the services of the visitors and we may be left with just $ 3 per person per night and this will have to be spent on administrative costs such as rent, salary, utility bills and profits. So, I don’t think we make much money, particularly if the group sizes are small. Therefore, I also disagree with the writing off of the surcharge of $ 40 per person for individual travelers. This would help us a lot even if the government takes away 20% of it.

    5. Liberalized tariff would attract all our fellow citizens into tourism sector and that would be like putting all our eggs in one basket.

    6. I can understand our govt. needs money and Tourism sector is looked upon as the resource but I don’t think liberalization is the solution. Rather increasing the tariff and royalty, safe guarding tour operator’s share of profits by monitoring undercutting practices, would eventually help our financial status.

    7. There is no need for our visitors to stay in 3 star hotels. Those who prefer luxury can go into high end hotels by paying over and above the normal tariff.
    Actually they do not mind experiencing a night or two in various farm houses. But it is important to inform them in advance of what to expect.

    Lets hope and wish Liberalization of tariff does take effect.

  24. Lily Wangchhuk says

    Been out of the country for a while and missed all the recent discussions on the tariff liberalization. But thank you Lyonpo for taking up this very important issue on tariff liberalization with the government. I am in full agreement with you and many others who have expressed concerns on the adverse impact of such short-sighted policy recommended by some foreign consultant who has neither engaged in stakeholder consultation or unaware of situation in our country. We place so much trust in foreign expertise when we have adequate expertise in our country. Why do we need a foreign consultant to tell us what to do which is in direct contravention with the visionary policies of our monarchs for which we have won much appreciation! The list of negative impact is long and I hope the pros and cons will be carefully weighed before consideration of such an option!

  25. I will not be surprised if foreigners visit our country taking us for some primitive objects or some animals in a zoo. Which are all the countries that are rich in culture and others poor? The tourists will not visit our country to chop down our trees, not even come with garbage to litter around, nor will they force monks in the monastries to come in jeans. Costa Rica is one country rich in ecology and biodiversity, people in there are one of the happiest and rely heavily on tourism. About 1/3rd of people in small country like Singapore is tourists any time of the year. They have high income per capita and they are happy people too. Lets give ourselves a chance to live better lives too by opening up.

    • Opening up the country to mass tourism will only kill the industry in the long run. And you cannot blindly compare Bhutan to Costa Rica, Hawaii, etc.. We operate in totally different conditions. People visit Bhutan for totally different reason vis-à-vis Costa Rica.

      The only country we can reasonably compare to is Nepal, even though it is bigger than Bhutan in both size and population. And now look at what “Mass Tourism” has done to that country in the long run. Do you think people in Nepal are living better lives because of opening up their country to mass tourism?

      You are right; no tourists will come to Bhutan to chop down our trees and to dump their garbage or to force the monks to wear jeans. But you never know what kind of influence some greedy and irresponsible tourists could bring to our people and our politicians. Just look at how McKinsey is dangerously influencing our policy makers. McKinsey has no long term interest in the future well being of this country.

      • I agree with you Karma 1 in regards to mass tourism, I will add though that there is no such thing as automated tourist, everything accounts due to sweat equity. I also thought it was a slap on the face for many of us who oppose the prosposed idea after reading the kuenselonline article ‘Tourism policy already happening’. Why distraction if they alrady decide on doing something redicule as the current idea. I don’t understand why we need an outside firm, what do they care about Bhutanese sentiments, they are business oriented firms and more $$$ they can get better it is for them. The ‘who cares’approach from the government and the way everything is so secretive will do more damage than any good for the ruling party. Come election time, someone like me will vote for any parties NOT DPT. Also, the 26 million allocation fund for marketing Bhutan, I won’t be surprise to see some ugly looking billboards in some major cities and passing out flyers in some street corners. Considering the ruling party’s interest with outside firms and what we are seeing so far, I highly doubt that they’d do any concept based marketing, and may opt for some cliché promotions. 🙂

  26. If we cannot compare us to Costa Rica and Hawaii, we can’t compare to Nepal either. Nepal does not really have a legitimate government and the country is one of the most corrupted country in the world not to mention that they have been battling Maoist forever.
    Just like Bhutan has been example for many others countries in the world due to our Kings, I see why we cannot do that. We can be leaders of good policy instead of fearing it might turn into another Nepal.
    As I said earlier if out Third King feared that opening our country to the world would degrade our culture and traditions, we wouldn’t be where we are right now.
    Besides we can still control visa application procedures and get royalty.

  27. I support several good policy initiatives of the present Government, but the policy on increasing tourist number by reducing tariff, and developing separate tourist centers in different parts of the country is one that i totally disagree because:

    1. Bhutan is basically an agarian country where majority are engaged in small scale self sustaining farming. This system is beautiful, sustainable, less polluting, environmentally friendly, and is resilent against any regional or international crisis. Allowing mass inflow of foreigners will spoil these fundamentally and ecologically sound system we presently have.

    2. Bhutan has several beautiful temples, monasteries and Dzongs. These are places for worship, reverence and are symbols of our enduring culture and religious institutions. Allowing uncontrolled number 0f tourists to these sacred places will definitly have adverse impact. It will dilute the importance and pollute these very important heritage sites. we should only allow tourists who strongly beleive in the Mahayana Buddhist culture to visit these places or even develop some meditation centers where interested visitors can stay for sometime for meditation.

    3. Mass tourism will inevitably lead to cheap prostitution of culture, and some vulnerable sections of our society will even resort to selling their flesh for cheap tourist dollar. Those cheap tourists will be source for deadly human diseases such as AIDS, TB, and other STDs.

    4. Government giving more importance to tourism will divert the minds of youth to cheap, less intellectually demanding jobs in hotels, spars and bars. In other words, Bhutanese youth will aspire for easy and cheap profession.

    Add more???

  28. Truth: You keep mentioning about how our K3 opened the doors of Bhutan to the outside world, as though whatever we have achieved so far automatically happened just because we opened our doors to the outside world. K3 did what he did out of necessity but with a lot of “CAUTION” in the long term interest of our national security. If it wasn’t for the farsighted and selfless vision of our enlightened Kings, Bhutan could have been another Sikkim or another Tibet. I think whatever success we have achieved so far is because of our K3 and K4’s “Cautious,” thoughtful, and long term development policies. It wasn’t based on McKinsey’s radical “here and now” short sighted unsustainable development strategy.

    Anyway, here’s the most important thing. As the government seems to have already made up their mind before even consulting the stakeholders, I sincerely hope that you are right. Even though most people in this forum don’t agree with you, I respect your passion in arguing your point of view. And I hope you have a selfless reason for that and that you are not irresponsibly arguing just for the fun of it. I hope you are being responsible and sincere, and that your arguments are based on facts and first-hand knowledge, and that you know things that we do not know and see. I hope you are right 500% and more. That you understand that so many people’s livelihood and one of our nation’s most important source of income is at stake, if we go wrong.

  29. OL
    do you read all the comments made by the blogger…or you just glance on it? just want to know…

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