The Kingdom of Bhutan reopens to tourists on Friday with a hefty increase to its daily tourist tax.
Before the country closed its borders in March 2020 in response to the Covid-19 pandemic, travelers to Bhutan were required to pay a minimum daily package price of $200-$250 – depending on the season. The price often included hotel, food, transport and tour guide costs as well as a mandatory USD 65 sustainable development fee.
But in late June, Bhutan passed a tourism tax law that eliminated the minimum price for daily package travel in favor of increasing the sustainable development fee from $65 to $200 per person per day.
Travel costs — for example for hotels and food — are not covered by the fee.
The country provides a fee discount for families, said Raju Rai, CEO of Heavenly Bhutan Travels.
“It is 50% for children between 6-12 years of age [old] and … free for children 5 and under,” he said.
“An active contribution”
Bhutan, and supporters of the new policy, say the move is in line with the country’s continued goal of attracting “high-value, low-volume” tourism.
To experience the country — known 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 Bhutan Tourism Council’s corporate website.
The Tourism Council said the fees will go towards upgrading infrastructure, training tourism workers, preserving cultural traditions, protecting the environment and creating jobs that provide 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, head of The Bhutan Canada Foundation and founder of the Trans Bhutan Trail, said the fees will go directly to helping local communities.
“The money raised by [the] The government will then be directed back to the communities and to support health and education, which are free for all Bhutanese,” he said.
Will travelers benefit?
Travelers will also benefit from the increased fees, according to the Norwegian Tourism Council. Standards and certifications for hotels and tour operators will be revised, which will improve travelers’ experiences, it said. In addition, travelers will have more flexibility when it comes to planning and booking their own trips, it says.
The Tourism Council notes that the minimum daily package price “had its limitations. For example, tourists often had to choose between package tours offered by tour operators, who controlled the travel experience for them. By doing away with [it] … tourists will be able to engage their desired service providers directly, and pay for their services accordingly.”
Tour guides are no longer mandatory for all tours, but they are required for travelers who plan to trek or go beyond the cities of Thimphu and Paro, according to the council.
Travel agencies, which can obtain visas for travellers, also require payment of sustainability fees, said Sarah-Leigh Shenton, marketing director at travel agency Red Savannah. “All administration is handled by our team, and our customers don’t have to pay locally.”
Critics versus supporters
Critics argue that Bhutan’s increased tourist tax is “elitist”, further closing the door to budget travelers who dream of visiting Bhutan.
Even more say the new policy will disproportionately affect travel agencies that cater to budget-friendly travelers.
Others are critical of the timing, saying the new rules will discourage travelers from visiting at a time when the country’s tourism industry is struggling after a 2.5-year border closure.
However, the Bhutan Tourism Board said the pandemic provided the right time “to reset the sector.” It also suggested it may welcome a slow return of travelers, saying: “The gradual return of tourists will allow for a progressive upgrade of infrastructure and services.”
Sam Blyth said he has trekked extensively through Bhutan over the past 30 years. He is the founder of the Trans Bhutan Trail, a not-for-profit company that helped revitalize a 250-mile-old trail that crosses the center of the country.
Sam Blyth, Trans Bhutan Trail, Visiting Bhutan, Trekking Bhutan
Wendy Min, Trip.com’s head of government affairs for Australia and New Zealand, said she felt a high fee was needed to “filter out travelers and keep things manageable.”
“For a small country, it won’t be ideal for them to open completely as you don’t want Punakha, or any of these cities, to be the next Kathmandu,” she said. “I can 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,” referring to Venice, where Italian officials have indicated that day-trippers will have to pay between 3 and 10 euros ($3 and $10) to enter from January 2023.
For now, the increased fees will not apply to Indian tourists, who before the pandemic made up about 73% of all travelers to Bhutan, according to a report published by Bhutan in 2019.
But that can also change. The Bhutan Tourism Board said the $15 daily fee paid by Indian travelers will remain in effect for two years, noting that it “will be revised at a later date.”
Blyth, who began visiting Bhutan in 1988, said he does not expect the new tax 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 deal directly with suppliers such as hotels, restaurants, guides and transport companies,” he said. “These services are affordable and … result in a total cost, even with the new tourist tax, that remains affordable.”