Road to Merak?

Breaking ground

On 7 January, Kuensel reported that:

A 28 km farm road will connect Merak to Radhi, the nearest semi-urban centre to the gewog. On January 5, a simple groundbreaking ceremony of the farm road was conducted, which was attended by villagers of Khardung, Tokshingmang and Merak. The road will begin in Khardung, pass through Tokshingmang and end in Merak.

The same article went on to quote Lyonpo Jigme Tshultim, who is the Speaker of the National Assembly and the MP of Radhi-Sakteng constituency, explaining that the new road would benefit many people and that “Merak is one place with potential for tourism and, with access to road, tourism can be promoted.”

Exactly two weeks later, on 21 January, Kuensel quoted the Prime Minister as saying that: “…Places like Laya, Lunana and Soe in the north-western part of the country and Merak and Sakteng in the east would not be linked by road.” And that: “A road connection to Merak and Sakteng … would bring the community less benefit.”

So will Merak get a farm road? Yes, they will. Kuensel’s photograph clearly shows that Lyonpo Jigme Tshultim will give them a road even if he has to dig it himself!

Starry-eyed plan

Almost all your comments on “Visiting tourists” expressed concern about the Prime Minister’s executive order to prepare a blueprint to do away with the minimum tourist tariff. The poll asking, “Should the minimum tariff for tourists be removed?” drew a similar response with 82% saying “No!”

Thank you for your comments. As promised, I’ll share your views with the government.

Today, I wish to draw attention to another blueprint that the Prime Minister has ordered. In the same executive order (of 13 November 2009), the Tourism Council of Bhutan was directed to constitute:

A cross sector implementation team consisting of the MoEA, MoF, TCB and ABTO to frame and present the blueprint for … Mandate all hotels catering to tourists to upgrade to at least 3 Star category.”

The idea, ostensibly, is to ensure “high value tourists” even after liberalizing the minimum tariffs by forcing them to stay in expensive hotels.

But how would we monitor that tourists, who will no longer be required to use tour operators, are actually staying in 3 Star hotels? How could we do so without becoming a police state?

Will all hotels currently catering to tourists be willing and able to upgrade to at least a 3 Star category? What will happen to those that are unable to upgrade?

And, what will happen to the guest houses in Bumthang? Where would tourists stay when they visit Bumthang? Where would tourists be allowed stay when they travel almost anywhere outside Thimphu and Paro?

Visiting tourists

Potential tourists

The bedrock of our successes in the tourism sector has been the “low volume, high value” policy.  This unique policy has served us exceedingly well ever since the first tourists started visiting our Kingdom in early 1970s. And today, Bhutan is both famous and envied the world over for its cautious tourism policies.

This policy has proven itself. We continue to enjoy the rewards of tourism (government revenue, jobs and international attention) without sacrificing our culture, our environment, and our way of life. Equally important, our tourists swear, time and time again, that their experience in Bhutan has been nothing short of pure magic.

All this may change. The Prime Minister’s executive order of 13 November 2009 directs the Tourism Council of Bhutan to constitute:

A cross sector implementation team consisting of the MoEA, MoF, TCB and ABTO to frame and present the blueprint for:

  1. Roll out of the integrated channel, price and supply policy that liberalizes the minimum package price and mandatory package via tour operator requirement; yet ensuring royalty revenue to the government;

The PM’s directives are a mouthful. But, the message is simple: draft a plan to lift the minimum tourist tariff.

If the tourist tariff is liberalized, it would be the government’s biggest policy decision so far: one that would affect our economy and our country significantly. So, we should debate this momentous policy change before it comes into effect – before the “cross sector implementation team” finalises their “blueprint”.

Give me your views, so that I can share them with the relevant authorities. And participate in the poll that asks whether you support removing the minimum tariff for tourists.

Investing in Bhutan

During Question Hour today, I asked the Minister for Economic Affairs:

Newspapers recently reported that 100% foreign ownership of hotels is allowed for foreign direct investments above US$ 200,000. Please explain why the minimum is fixed at US$ 200,000.

I was basically concerned that the minimum investment required to qualify for 100% foreign ownership of hotels was too low. I reported that many Bhutanese have already demonstrated that they can build and operate hotels that cost many times more than US$ 200,000. And that, while foreign investors should be encouraged, policies should ensure that opportunities are not taken away from Bhutanese investors.

Lyonpo Khandu Wangchuk’s reply was long. He talked the House through the history of FDI in Bhutan, economic growth, economic policies, employment, tourism, foreign currency, domestic airports, helicopter services, seasonal tourists, conference centers, infrastructure, credit cards, TAB, tourist visas, and hotels. He even mentioned McKinsey and Brazil!

It turns out that I was wrong. The minimum investment proposed for 100% FDI ownership is Nu 20 million, not US$ 200,000.

And it turns out that Lyonpo Khandu may not have known that I was wrong either. He didn’t correct me. Nor did he mention the figure Nu 20 million!

Hidden beauty

haa mountains from chelelaYesterday, on my way back from Haa, I stopped at Chelela (altitude about 3,900 meters) to see the sun set over our western mountain ranges. These mountains above the Haa valley offer some of the best, yet least known, treks in our country. They include a trek to the legendary lake Nub Tshonapatra, which I hope to revisit and write about in 2010.

UPDATE: Lampenda Chuup’s comment reminds me of the beauty that can be seen in and from those mountains. So I’ve changed the title from “Hidden treks” to the more appropriate “Hidden beauty”.

Farmhouse lunch

Sonam'sWe had lunch today at Aum Sonam’s house. Aum Sonam, who was a member of the last National Assembly before the introduction of parliamentary democracy, served us a sumptuous meal of kharang, sikam, aima datsi, mushrooms, farm eggs, cottage cheese and papaya.

I enjoyed Aum Sonam’s cooking thoroughly. It was clean, wholesome and traditional. So I asked her if she would be willing to make lunch for other travelers between Bumthang and Mongar or Trashigang. Her answer was “yes!” quickly qualified by “but they should call me first”.

Her farmhouse is located among Thidanbi’s bucolic paddy fields about five kilometres uphill from Lingmithang. It’s a natural lunch stop when traveling from Bumthang to Mongar, or from Trashigang to Bumthang. If you want to try Aum Sonam’s food, telephone her at 1770-1287 or her husband, Thinley Namgay, at 1764-4057.

I’m quite certain that tourists would also enjoy a visit to Aum Sonam’s. Besides cooking lunch and brewing tea, she could be easily be distilling ara, frying zao, or pounding tsip, all traditional activities that more of our tourists would want to see.

I already know where we’ll have lunch on our way back.

Consulting tourists

So the government has accepted and decided to implement McKinsey’s recommendations for the tourism sector. And it seems like we are paying a lot of money – almost 10 million dollars – to a consulting firm to tell us what we already know. Attracting high end visitors, promoting ecotourism, making Bhutan a destination for international meetings, easing ticketing, simplifying visa procedures, improving hotels, domestic air services, developing infrastructure, investing in marketing … these are more or less the same recommendations that a series of earlier consultants have made. More importantly, they are the same ones that ABTO and tour operators have repeatedly submitted to the government. Still, I’m hopeful. I’m very hopeful that these common recommendations will finally get some serious attention from the government. After all, they are now McKinsey’s recommendations.

But, the government has, thankfully, already decided to dump McKinsey’s main recommendation: i.e., to increase annual tourist arrivals to 250,000. The government now sees McKinsey’s projection as an “aspiration”, and has decided to stick with the Tenth Plan targets instead. An aspiration? Do we really mean it? Do we really think that 250,000 tourists a year is a goal to aspire for? Or our we being excessively polite? Do we actually mean that our consultants are wrong? That 250,000 tourists a year cannot be good for Bhutan?

In total darkness

We’ll be up by five tomorrow morning, to take in the total eclipse of the sun from Kuenselphodrang. Many of my neighbours – indeed, many Bhutanese – will also enjoy this very rare natural phenomenon when the moon completely blocks out the sun. Bhutan, after all, falls bang on the path of the total eclipse.

But you won’t find many tourists. We didn’t market the occasion. The heavens have blessed Bhutan with the longest total eclipse, of about three minutes, in the 21st century. And we have not used it to boost tourism.

The Finance Minister reported today that, in 2008, about 27,000 tourists visited Bhutan, and that the government would generate revenue of about Nu 490.1 million from tourism. But, that the government expects tourist arrivals to decrease in 2009, due to the global recession, and that, as such, the government estimates revenue of only Nu 417 million during the 2009 – 10 financial year.

Yes, tourism generates important revenue for the government. But, more importantly, it creates jobs. And, it distributes wealth. So, we should not sit on our hands, waiting out the recession. We must be imaginative and proactive in marketing our wonderful country as a preferred tourist destination.

Just imagine: totality packages to Bhutan. Many tourists would have flocked here, and paid good money, to view the total eclipse of the sun from Tashichhodzong. Or from Trongsa Dzong. Or from the Phajoding lakes. Or from Laya. Or from Merak, if it is open to tourists. Or from any other part of our blessed kingdom.

Saving industries

I applaud Lyonpo Khandu Wangchuk’s tour to Pasakha to assess the crisis gripping the steel factories. And factory owners welcomed his visit as signs of possible government support for an industry which is seriously affected by the global financial crisis.

The government should support the steel industry, but provided it is of strategic importance to our country. That is to say that the industry should be socially, politically or economically too important to our country to allow it to collapse. So if, due to a failure in the steel industry, many jobs for nationals would be lost, or national security or self sufficiency be compromised, or revenue would drop drastically, then, the government must intervene in full force. Otherwise, it should reconsider.

One strategically important industry that does need the government’s attention is tourism. Our tourism industry has endured the SARS epidemic, Asian financial crisis, avian flu outbreak, and other external shocks only to be seriously threatened now by the global financial crisis. And we cannot allow tourism to take a beating for three reasons: it generates jobs, it distributes money, and it generates foreign currency.

Tourism is a big employer. At last count there were 1,300 licensed guides. And this represents only a fraction of the jobs which are dependent on the tourism industry – thousands of cooks, waiters, housekeepers, drivers, craftsmen, retailers and entertainers depend, directly or indirectly, on tourism.

We all know that tourism is our country’s largest foreign currency earner. But we forget how effectively it circulates money through our economy. All the different types of workers I just mentioned, working in different parts of the country take home pay checks.

For example, consider this: Pem Tazi, about 43 years old, from Tshojo in Lunana, is a “yak contractor”; he organizes yaks for the famous Snowman Trek. This year, Yangphel used him on one trek – he worked 47 yaks for 14 trekkers for 14 days (Laya to Marothang) and charged Nu 500 per yak per day. So he recently collected almost Nu 330,000 for his services. He keeps 10% of this. The rest he divides among the other 18 yak owners. Yangphel also had to hire a similar number of horses and yaks for other segments of the same trek: Paro to Jangothang; Jangothang to Laya; and Marothang to Nikachu.

This is serious money circulating effectively through our economy. Strategically important stuff.

So our steel industries may or may not be strategically important, and the government may or may not help them. But tourism is strategically very important, and the government should address the possible impacts that the global financial crisis may soon have on this industry.

HTMT Institute

The construction of the Hospitality and Tourism Management Training Institute is finally making progress.

The institute, located in 16 acres of sprawling property in Motithang, is estimated to cost Nu 385 million. That’s a lot of money to convert what had earlier been used as the Youth Center and, before that, as a government hotel to a training institute.

And that’s a lot of money to train only 50 people a year.

The good news is that once the institute is in full operation it would offer two-year courses in tourism and hospitality leading to diplomas that may be offered jointly with the International Tourism and Hospitality School in Salzberg. We could, therefore, expect the graduates of the HTMTI to be equal to the best in the world. That is indeed very good news.

The tourism and hospitality sector – our country’s largest foreign currency earner and, more importantly, biggest employer outside agriculture – is growing rapidly and demands increasing numbers of skilled professionals. This demand is expected to be met though the HTMTI.

The bad news is I can’t see most of these graduates, well trained and armed with diplomas, employed in local hotels. Most of our hotels are self managed and the growing demand for workers is for skilled workers, not managers.

So unless are aim is to train people for export – to Austria, for example – we need to do a serious review of the institute’s proposed training program.

Start such a review by consulting hoteliers themselves: Ugyen Wangchuk, the proprietor of Jumolhari Boutique Hotel and Chairperson of the Hoteliers Association, says that he expects the current shortage of skilled workers in the hotel industry to reach serious proportions. However, he claims that most of the demand is for semi-skilled workers (receptionists, bell boys, waiters, housekeepers, cleaners, assistant cooks, etc., ) and not the managerial level people that would be produced by HTMTI.

Then consult the experts: my friend in the Tourism Council of Bhutan, a specialist in tourism and hospitality, is already concerned about the relevance of the proposed courses at HTMTI. My friend feels that short, focused training in a range of skill areas would be more effective and relevant for our country, not a two-year management course.

The institute was first proposed in 2001, construction began only in 2007 and I don’t see it being ready before 2010. We’ve waited too long. Let’s not create another white elephant.