Liberalised tariff highend tourism

January 28 – The Tourism Council of Bhutan says that the new liberalised tariff system is meant to not only increase the number of tourists to 100,000 in the next three years but also have more high-end tourists.

TCB officials said that the current USD 200 dollars was supposed to be a minimum price introduced in 1989 but in reality most tour operators provided everything within or lower than the package.

According to TCB this ‘minimum glass ceiling’ has become a ‘glass trap’ with no incentives and competition for tour operators or hotels to improve and tourists had no say in where they would stay, how they would travel or even eat as everything was pre decided by most operators within that package.

Under the new system apart from the liberalised tariff tourists will have a say in the packages. “The government is very clear and will remain with high value and low volume tourism as all tourists will have to stay in three star hotels and have a guide,” said the director general of TCB, Kesang Wangdi.

He also said that Bhutan currently had the lowest tourism density of 0.06 in comparison to 22 other similar countries and even with 100,000 tourists it would still have 55 times lower density then the next lowest density country.

He said that the main aim of the government was to create 25,000 jobs and more revenue by spreading the tourists across Bhutan through all seasons offering multiple packages compared to the 96 percent culture package right now.

“Liberalised tariff is just one of the many initiatives like destination marketing, improving aviation, more supply of hotels, upgrading of hotels to meet the objectives,” said the joint director of TCB, Thuji D Nadik. He said that Bhutan was already open to the outside world with around 40 TV channels and any increase in tourist’s number would not have an impact. He also said that monitoring would be strengthened especially once the tourism bill becomes an act.

Meanwhile the hotels have had a mixed reaction with many supporting a liberalized tariff but few others objecting to the move. The president of the Hotel Association of Bhutan, Ugyen Wangchuk said, “a major concern is that all tourist hotels have to upgrade to a three star which would mean around Nu 4 million in investment and so we are asking for easy loans and tax breaks”.

However, the Association of Bhutanese Tour Operators (ABTO) have submitted in writing to the Prime Minister their objections on liberalising the tourist tariff.

ABTO says that there has been a 35 percent growth in tourist arrivals since 2004, which will lead to around 91,793 tourist arrivals from the current 27,636 by 2013 at the same tariff.

ABTO also says that there would be an influx of budget travelers, local culture and behaviors would be impacted through the “Demonstration Effect”, infrastructure would be challenged and there could be unhealthy price competition bringing lower yield from tourism and decrease in quality despite increase in volume.

It has instead submitted that other current measures like development of domestic airports for example would help meet objectives if properly implemented. It suggests a tax breaks for tour operators so that the money can be reinvested in tourism. It also suggests strengthening linkages between tourists and villagers for better resource distribution, more awareness among all stakeholders and better monitoring to be put in place before liberalization as currently requirement like proper office space for tour operators and equipment for trekking are not enforced well.

source: kuensel