A Funeral for Bhutanese Tourism

The following appeared in Bhutan's national newspaper, the KUENSEL, on their weekend issue of June 29, 2024. I am posting it here once again - for my international readers.

Exactly half a century back, for the first time ever, Bhutan opened its doors to commercial tourism. On 2nd October, 1974, a multinational group of 12 tourists set their feet on Bhutanese soil. It was perhaps an act of divine intervention that Bhutan’s first tour group happened to be organized by the much revered and selfless Jesuit Father - Fr Richard McDonald, then based in Darjeeling, India.

This dramatic pivot occurred after careful consideration by our leaders. Under an Act approved by the 36th National Assembly of Bhutan on 7th June, 1972, the following resolution was passed:

22. Matter relating to Tourism Act

In view of the likelihood that, despite being in its initial stage of development, Bhutan would attract a large number of tourists, the Cabinet had prepared a draft of rules governing tourism in the country. After due consideration of the same, the Assembly accorded its approval.

Over the years, tourism became the country’s single-largest employer and highest net-gain foreign exchange generator. The country’s biggest and the brightest commercial houses - such as Tashi and Lhaki Groups – could not resist the allure of the tourism enterprise, so much so that they remain active players to this day. The business appealed to the highest echelons, to the lowest, and to everyone in-between. For this reason, the tourism business was Bhutan’s most diligently monitored and tightly regulated commercial activity, resulting in bountiful revenue for the government and generous income for every player across the broad spectrum of the business chain.

Under a business regime that was nothing short of generous, known as the Minimum Daily Package Rate (MDPR), there was no leakage of government revenue and the country received 100% of the foreign exchange generated by the tourism business, not merely the Sustainable Development Fee (SDF). Today, under the new rule, less than 10% of the foreign exchange is realized. Even worse, there is massive tax evasion. We are told that the Royal Monetary Authority and the Department of Revenue and Customs are perplexed as to why, despite a huge increase in tourist arrivals, the foreign exchange inflow remains stagnant and tax collection dismal. But this grim state of affairs should hardly be perplexing: we created it with the introduction of the ill-informed Tourism Levy Act of Bhutan 2022.

I had hoped that in 2024, with the pandemic well behind us, the people of Bhutan would come together to put on a show to beat all shows, to celebrate 50 years of tourism that has touched and improved nearly every life in this country. I had hoped that the pioneers and trailblazers of the industry – the earliest surviving head of the Department of Tourism (Lyonpo Jigme Tshultim), the earliest cultural guide (Gandhi Nawang Dorji), the earliest trekking guide (Karchung Wangchuk), the earliest private-sector tour operator (BTCL), and even the earliest lunch boy (Karma Sonam) who carried a pack meal to be served to the first-ever tour group lead by Lars-Eric Lindblad – would congregate at the Clock Tower to celebrate the occasion and reminiscence about the stupendous journey to which they bore witness.

Alas, that hope has been dashed. No celebratory mood could possibly prevail when the industry is maimed and bleeding. I am told that DoT made do with a somber, low-key event, apparently lighting a few butter lamps at the Kuensel Phodrang early this month. Some believe that ritual was really intended to mourn the death of a once-thriving industry.

Where do we go from here? Can we reclaim the tourism business from the clutches of the outsiders who now rule the roost? Is it conceivable that the government may realize the folly of their plans and make amends? According to recent news reports, those may be empty reveries. The current government’s GDP projections tell a tale of even more dire times to come for the industry:

In the above official chart, tourism does even not feature as an economic sector nor as a contributor to the nation’s GDP. Is our tourism industry nothing more than a mirage? Are we supposed to forget or dismiss tourism’s past role in the nation’s growth? According to these numbers, the government does not foresee any future contribution from the industry.

How can Bhutan – a country that repeatedly turns up on “Best Places to Visit” tallies, a destination reliably found on sophisticated traveler’s “bucket lists” - starve the very industry that has brought us so much wealth and respect in the past? I believe it’s time for a national discussion - and the sooner, the better.