History Of Tourism In Bhutan: PART IV of V

Privatization of Tourism Business

There were some truly significant and direct interventions by His Majesty the 4th Druk Gyalpo - in areas of business and trade. I recall that one of the most significant was the nationalization of cardamom plantation and timber trade, in 1979. The other was the de-monopolization of dealerships - a policy that was well intended - unfortunately, very poorly implemented by the Trade Ministry. But privatization of tourism business has got to be the most impactful. Unfortunately, yet again, the government hashed it up during implementation, although it self-corrected eventually.

Late Gaseb Dorji Gyeltshen of the DoT/BTC masterminded the privatization of Bhutan’s tourism business. He is credited as the brains and the moving force behind the tourism privatization initiative. It resulted in the emergence of the private sector monopoly that came to be known as Bhutan Tourism Corporation Limited (BTCL), in 1991. This entity exists to this day - with the same name.

In a sense the BTCL is the direct offshoot of the erstwhile BTC of the government, because it inherited all the business of the BTC. Like its predecessor the BTC, BTCL aspired to be a monopoly. And they did - for a very short while. Unfortunately, the floodgates were open and there was no stopping the spillage. As the inheritors of the monopoly that was the BTC, the BTCL took it upon themselves to be the sole player in the game. That wasn’t to be - other private operators, some of whom were playing the field as early as the early 80’s, were up in arms. They complained bitterly to the government against the monopolization of the business. The government relented. But true to character, they once again hashed it up.

Instead of de-monopolizing the business entirely, they limited the issue of tour operators’ license to just - 33.

The tourism business was emerging as one of the most lucrative businesses - but there were no licenses to be had. The government  had put a freeze on the issue of new licenses. There was a cap put in place - at 33 licenses. No new licenses were being issued - a situation ripe for manipulation by the immoral and the unethical. That is what happened - tour operators' licenses came to be sold in the black market, like the vehicle quotas, at premiums as high as 2 million Ngultrums per license. That ended when the government decided to remove the cap, as of 2000.

The major and initial promoters of the BTCL, during its formative years were:

1.  Late Gasep Dorji Gyeltshen

2.  Dasho Ugyen Dorji of Lhaki Group

3.  Late Yub Ugyen Dorji

4.  Late Lhenkey Gyeltshen

5.  Aum Namgey Om

6.  Aum Shekhar

7.  Pasang Dorji of Karma Steel

8.  Omtey Penjore of Yarkey Group

There were other investors in the company - but they were minor shareholders.

By 2001, a total of 116 tour operators were registered with the TCB. However, only 80 of them were active. Of these, the top 10 operators handled 67% of the business.