Herding Tourists To The East

Every National Assembly session since the advent of Constitutional Monarchy in 2008, one subject that has been discussed with unerring regularity on the floor of Bhutan’s august National Assembly Hall, is the matter relating to promotion of tourism in the East of the country.

But this NA session saw one Member of Parliament – a Cabinet Member, no less – express a view that was in complete deviance to what has been consistently voiced by a string of MPs from the East - that the government needs to do more to promote tourism in the East. The Hon’ble MP under reference was explicit that it made no sense – that people should focus more on each Dzongkhag’s distinctive strong points – that tourism as an economic activity is not, cannot be, a fit for every Dzongkhag in the country.

The MP I am speaking of is His Excellency the Finance Minister Lyonpo Lekey Dorji.

Precisely the point I have been making through this very blog!!!! – that it makes better sense to fatten the cow with proven milk giving potential, than to lay bets on bulls that haven’t exhibited any visible attributes of promise.

Looks like only Khengpa’s are capable of thinking straight – or thinking at all.

Jokes aside, I accept that those who are relentless in their push for tourism in the East, they mean well and that they have the best interest of the people at heart. We cannot fault them on that account. However, they do have to bear in mind that good intentions are nothing more than a thin cloak in a thick winter. Understanding ground realities is important. They do have to understand that the road to good intentions is, most often, paved with dead bodies.

In the hope that people have a proper understanding of why the charming East has failed to appeal to tourists, let me present the following realities:

~  According to the latest figures released by the TCB/DoT, tourists spend no more than an

    average of 4-5 nights in Bhutan (2025 figures).

~  Round trip travel time to the east takes 4 days – minimum;

~  Clearly, time seems to be of essence - not money. Meaning that even if reduced

    SDF is offered, there may not be any takers – because of the travel time involved in

    journeying to the East;

~  Most importantly, what can the East offer that is different and distinct from that

    which the West can offer - within the same time frame?

To me, it seems like we need to be a bit more creative, rather than constantly harping on the need to reduce the SDF. For instance, if we care, perhaps the thing to do is to think of how to reduce travel time!

Now don’t tell me about Yonphula airport – taking a flight to Yonphula is like the roll of the dice – one could very well end up with a Joker instead of an Ace!

The Gigantic Poster At Dochu-La Pass

 

Thimphu; 01:26 PM; March 30, 2026

“Hi, Hi Rotarian VG ….. WOW!! To what do I owe this honor? How are you?”

“I am fine Thank You …. How are you? Actually, I called to confirm whether the large photograph of the Himalayan mountain range installed at the Dochu-La Pass is by you.”

Large Poster of the Eastern Himalayan Mountain Range installed at Dochu-La Pass: Next best thing to the real stuff!

“Indeed, it is by me. I put together the photographs – but the installation was carried out and paid for by the Tourism Council of Bhutan (TCB).

The thing is I realized that 90% of the tourists visiting Bhutan drive to Dochu-La Pass to view the snow-capped mountain range of the Eastern Himalayas visible from there on clear days. Sadly, 70% of the time the mountains are shrouded in cloud and mist …. So most often the tourists have to return terribly disappointed. So, I suggested to the TCB that next best thing we could do to improve the experience of the tourists is install a large poster of the mountain range so that during times when the view is obstructed, the tourists can view it on the poster. I offered to do the photography FREE as my contribution. So ….. ”

“Precisely!!! …. Right now I am standing in front of the gigantic poster at Dochu-La since the real thing is not visible ….. the mountains are all under the clouds. I say, that was a fantastic idea of yours …. Even if I cannot see the real stuff …. At least I can see what it would have looked like.”

“You are in Bhutan and not in Singapore? I thought you are calling from Singapore ….. I see the country code +65 ……”

“Yes I am in Bhutan …. I will be heading for Paro in a while to see the festival there. Are you coming to Paro by any chance? …. If you are, we could meet up. I already met President Karma and Secretary Lam.”

“No, No…. a free-loader friend wants me to give a talk to a bunch of trainees whom he is instructing .. so, I need to prepare for it. Anyway …. Thanks for the call and enjoy your trip ..... Bye and take care.”

My Penultimate Article on DrukAir

This will be my absolute last article on anything related to DrukAir - No More Honking!

The American poet and educator, Henry Wadsworth Longfellow believed that "If you only knock long enough and loud enough at the gate, you are sure to wake up somebody." Poor fellow – obviously he did not meet any Bhutanese in his life time --- otherwise he would have known that the Bhutanese don’t – and even if they do, they would be nothing more than walking zombies – clueless, sightless, heedless and mindless!!

More than a year back, late Draksho Tsering Wangda called me up from Gelephu and said;

“Yeshey --- I want to take up the issue of the DrukAir with the Royal government – will you find time to prepare a background paper for me on the issue so that I have an understanding of the issues in their entirety?”

Thus, on January 3, 2024 at 7:50 AM (going by the meta data embedded in the MS Word document I sent him) I began putting together the following article which ran into all of 11 pages!!!

I do not know if he ever took up the matter with the RGoB … he never told me … and now he is no more 😢.

Not wanting to preempt whatever Draksho Wangda was planning … I decided not to publish the article on this Blog, or any where else. But few days back … a short conversation with a friend convinced me that I should publish it – because, the friend and I both agreed that it is not necessary that one’s endeavors will actually wake the dead – but for sure posterity will bear witness that I knocked and knocked and knocked ---- 19 times!!!

https://yesheydorji.blogspot.com/search/label/On%20The%20Wings%20Of%20The%20Dragon

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When & Why

It is accepted that the essential attributes of a sovereign state are some of the following:

1. Defined Territory

2. Settled People

3. Standing Army

4. A Government with control over its territories

5. A National Flag Carrier

What Is A National Flag Carrier?

In the context of international law and relations, a national flag carrier is either an aircraft or ship that flies the national flag of a sovereign state.

It is universally accepted that all ports of call or landings in host countries extend to national flag carriers’ preferential treatment and access to certain routes and markets. 

Simply stated, the global community will endorse a national flag carrier only if it is floated by a state that is accepted as wholly owned and administered by a sovereign state.

Creation Of DrukAir – Our National Flag Carrier

I believe that it is in this context that His Majesty the IVth Druk Gyalpo worked tirelessly for more than three years to establish our National Flag Carrier - the DrukAir. The laborious journey began in 1981. By 1983, DrukAir was finally able to start commercial fights, having cleared the many hurdles placed in the path of its creation and launch. At last, the last of the missing spokes in the orb of our nationhood was put in place.

DrukAir debuted with one unpressurised 18-seats Dornier 228-200 turboprop aircraft. The country’s only usable airport, in Paro, had an airstrip measuring less than one-and-a-half miles long. It can be said with certainty that in creating DrukAir, His Majesty the IVth Druk Gyalpo could not have harbored any lofty commercial aspirations - I believe that it was his way of making a statement of nationhood, an assertion of independence, an announcement to the world that Druk Yuel was an independent nation with the necessary apparatus of nationhood in place.

Over the years, the national carrier began to grow, both in fleet size and in scope and scale of operation. Today, the airline boasts of the following fleet of aircrafts:

The Bhutanese people’s investment in the airline runs into tens of billions of Ngultrum – that is pretty substantial for a country whose annual GDP is less than Nu.280.00 billion.

National Flag Carriers Around The World

DrukAir’s singular history raises the question: Are there other national flag carries around the world that serve the national interest over narrow commercial interest? There are - to name a few:

Britain’s erstwhile Imperial Airways, formed in 1924, was specifically created to provide air links between Britain and its far-flung empire. No profit motives here. KLM followed suit, providing air links to the Dutch East Indies. Belgian’s SABENA Airlines serviced the Belgian Congo. Air France’s predecessor, Air Union, flew to French colonies in West Africa. Profit-making was furthest from the minds of these governments.

The Malaysian government considered Malaysia Airlines (MAS) “an essential instrument in the nation-building process”. The carrier’s primary focus was in servicing domestic routes rather than international ones. At the time, the Malaysian government’s focus was in integrating different regions as one nation. Here too, profit was nowhere in the scheme of things.

All of these airlines were established not as institutions of profit but as instruments aimed solely at providing control, prestige and national integration. Of course, some were also created as state apparatus for espionage. For instance, during the Cold War era, the US government used flight attendants of the now defunct PAN AM, its unofficial flag carrier, to perform espionage duties. Mossad regularly used El Al, Israel’s national flag carrier, for the same purpose. KGB agents infiltrated the state-owned airline Aeroflot to carry out intelligence and counterintelligence activities. South African Airways was used by the Bureau of State Security for espionage work.

As these examples attest, whether for espionage or for connectivity, it is clear that national flag carriers were created solely to serve a national interest. Narrow commercial interests seem to be the least concern to the states that owned these carriers.

Destiny’s Lost Child

From all the above, it is clear that a national flag carrier exists because it fulfills a social and national mandate - far above and beyond narrow commercial interests.

DrukAir cannot be an exception. Indeed, our national flag carrier has every reason to remain an apparatus in the service of the nation, because of all the airlines named above, DrukAir is the only airline that is financially unable to operate as an entity of profit. It is simply impossible, unless it does so at the cost of the nation and the people of Bhutan – which is what it is doing now - with impunity.

Somewhere along the line, DrukAir got its priorities confused and muddled. Even while it was clear, beyond any doubt, that the country’s operating conditions were extremely hostile, the airline began to pursue commercial aspirations - an ambition that was, and remains, untenable.

Today, the airline stands resolute and unbending - chasing an impossible dream, adamant that it will stand its ground, mindless and uncaring that it is causing jeopardy to the lives and livelihoods of a few hundred thousand of its principal shareholders: the Bhutanese people. The country’s vital tourism industry lies crumbling and helpless, at the mercy of a near-monopoly that no one seems to have the power to control or manage.

Now we are told that the DrukAir has lost 80% of its market share to operators from outside the country. Not that they care – because it is not money out of their pockets!

I have always held the view that the DrukAir is not a commercial entity, but an essential service apparatus - like the Food Corporation of Bhutan (FCB), the Bhutan Post (BP), the Royal Bhutan Army (RBA), the Royal Bhutan Police (RBP) etc. But strangely, the airline has been misled into believing that it is a commercial entity with profit at the core of its existence. Unfortunately, despite its self-assigned mandate to operate as a commercial entity, the airline forgot the fundamental objective of a commercial enterprise: to generate profit!

The airline may have been allowed to fail in its most fundamental duty, through neglect and lack of stewardship. It may have caused other institutions that depended upon it to fail. It may not have contributed in monetary terms to the national exchequer. But one must admit that DrukAir has contributed in other noteworthy ways. It has unshackled Bhutan from the country’s landlocked isolation. It has given wings to the Bhutanese people to traverse the world beyond. It has validated Bhutan as a sovereign state.

All things considered, however, we have to accept that DrukAir cannot be mandated to make a profit. There is simply no way it can, unless it does so, as it does now, at the cost of our national interest.

Challenges To The Airline

Paro airport is located in a narrow valley boxed in by steeply rising mountain peaks. Located in a geographically complicated site, it is classified as one of the most challenging airports of the world. Only a few dozen commercial airline pilots in the world are certified to fly into and out of Paro airport.

The operating conditions are difficult. Depending upon the season, dipping temperatures and windy conditions, coupled with high altitude, impose limitations on the operating hours of the aircrafts. At times aircraft are able to haul only half of their carrying capacity. Flight diversions and cancellations due to adverse weather conditions are common. The myth is that DrukAir has a monopoly in Bhutanese airline business. But the reality is that no international airline operators are willing to come to Bhutan. If that were not the case, under the bilateral ATA/ASA agreement with countries where DrukAir flies, airline operators from those countries have the right to fly the Bhutanese airspace. But they don’t, because the passenger flow is minuscule, the operating conditions are extremely difficult, and the operating costs are prohibitive.

Network Of Domestic Airports

The country has three additional domestic airports that DrukAir serves: Batpalathang, Gelephu and Yonphula. Here, too, the situation is no better. Given the restrictive length of the airstrips in these locations, only small airplanes with minimal carrying capacity can be operated. 

To aggravate the situation further, none of these three airports is equipped with bowsers - specially designed truck-mounted tankers that deliver jet fuel to the aircrafts. This is an essential service that every airport must be equipped with. Gelephu airport does not have one. Yonphula airport does not have one, either. Batpalathang does have one, but it is said to be a leaky apparatus. Because of the leaky tanks, it is said that the aircrafts captains refuse to accept fuel from it, for fear that the fuel may be contaminated - a safety measure that cannot be compromised.

Consequently, since the start of commercial services, Druk Air’s planes have been required to carry tons of extra jet fuel for the return flight, rather than carrying passengers. Add to that the fact that the load is already less than half its rated carrying capacity, due to high altitude and unpredictable weather conditions. The result: extremely high operating costs and a flight schedule that is akin to the roll of the dice.

Given these compelling circumstances, the way forward is clear for the government and for the airline company: focus on up-scaling carrying capacity; expand route coverage, service, safety and security; work toward creating the enabling conditions for others to generate jobs and income. In other words, support the government and the tourism industry by rationalizing fares. What the airline cannot earn, the tourism industry will augment a thousand-fold.

Sadly, more than four decades since its birth, DrukAir is like a lost and misguided child by the wayside. It cannot take pride in the fact that it has served a national cause, nor can it claim to have filled the national coffers with abundant profit.

Standing In The Way Of Bhutan’s Potential

Bhutan prides itself as a tourist destination of choice. We talk of the many tourism awards we have won in the international arena. We boast about our pristine environment. We advertise our unique cultures and the magnificent fortresses that adorn our hilltops and cliff faces. We revel in our colorful festivals that leave tourists breathless. Yet, after sounding the drum beat for close to half a century, our annual tourist arrivals is less than 8% of neighboring Sikkim with almost the same tourist appeal as Bhutan. Sikkim recorded a whopping 1,321,000 tourists in 2023 – as opposed to Bhutan’s 103,000 for the same period.

In large part, DrukAir is responsible for this failure. As a critical transport service provider for Bhutan’s vital tourism sector, DrukAir has had a ripple effect across the broad spectrum of the business chain. When tourism is hurt, the repercussions are felt by the government through reduced tax collection and a drop in foreign currency earning. Beyond that, its impact is immediately felt by the hotel and restaurant industry, the handicrafts sector, the transport industry, the farming community, pony drivers, roadside trinket sellers - even the wooden walking stick fashioners at the base of Taktsang. As we all know, the tourism industry provides employment to the highest number of Bhutanese people, earns the highest foreign exchange and is among the very few net gain industries in the country.

Sadly, DrukAir has been negligent in its responsibilities. Coupled with the ill-timed Tourism Levy Act of Bhutan 2022, it has caused serious damage to the country’s tourism industry. While the Tourism Levy Act has been partially rectified, DrukAir and its exorbitant airfare continues to cause mortal damage to our vitally important tourism industry.

DrukAir’s fares are simply too high - to the point that potential visitors believe that they are being taken advantage of, because of the near-monopoly prevailing in the Bhutanese air transport sector. Prospective tourists are forced to choose competing tourism destinations such as Sikkim, Darjeeling and Nepal for their annual holiday trips.

Because of DrukAir’s unreasonably exorbitant airfare, more than 80% of Bhutan-bound Indian tourist traffic is diverted to enter overland through neighboring Jaigaon. Add to that the recent rule that tourists are not required to be hosted by a local tour operator, and the situation is wide open for entrapment by the operators across the border. Given the enabling conditions that have been created by exorbitant Druk Air fares and tourist traffic being forced to enter through Jaigaon, the following situations have developed:

1. Jaigaon operators have taken over business which otherwise would have been handled by the Bhutanese operators.

2. Bhutanese tour operators have become secondary players, even acting as mere commission agents for foreign operators. It is rumored that in some cases, Bhutanese tour operators conduct their entire business - from quoting the land cost to preparing the daily itinerary - then ask their Jaigaon counterparts to act as the official tour operator. This way the local tour operators do not have to pay tax on the business because all transactions are conducted in cash in the name of the Jaigaon operators.

3. In this situation, all tour payments are collected/routed through the principal operators at Jaigaon. This means that Bhutan-bound Indian rupees terminate their journey inside the bank accounts of Jaigaon operators. Payments to service providers within Bhutan - such as transport operators, hotels, guides, restaurants etc. - are transected in local ngultrums. This explains why Bhutan has seen a dramatic drop in the inflow of precious Indian rupees.

4. Since the business is unregulated and mostly handled by the Jaigaon operators, taxable tourism business turnover goes undeclared - resulting in a substantial drop in tax collection by the DRC.

5. Over time, the Indian rupees earned by the Jaigaon operators from business usurped from Bhutanese tour operators, are sold to the Bhutanese at a premium ranging between 3-10%, thereby devaluing our ngultrum that is officially traded at par with the Indian rupee. Even worse, unofficially traded Indian rupees are used to under-invoice imports from India, further impeding tax collection.

6. Arising out of the introduction of new way of doing things under the recently introduced Tourism Levy Act of Bhutan 2022, the $$ inflow has experienced severe dip - to such a level that now the RMA and the DRC is said to pretend surprise – rather they feign ignorance - as to why the $$ earning from the tourism sector has gone down so drastically. They know very well that the reason is that under the new rule, only the SDF of US$100.00 is required to be deposited with the DoI – balance amount needed to cover the cost of hosting the tourists – IS NOT REQUIRED to be remitted officially. This has enabled many tour operators to seek cash payments from the tourists, or their foreign agents – resulting in reduced foreign exchange inflow – in addition to loss of tax collection as a result of a large amount of tourism business being conducted clandestinely – in CASH and without any official record of business transection.

7. It has ushered in an era of immorality – it has created enabling conditions for guides, drivers and even police personnel to siphon off hundreds of millions of the monument fees collected from the tourists.

Additionally, at the third-country level, DrukAir’s high fares have caused the following situations to develop:

1. Loss of company business to competing airlines in the region.

2. Loss of revenue to the company through loss of turnover, because what business that can be had is being taken up by competitors in the region.

3. Diversion of Bhutanese tour operators’ business to competition across the border, because inbound/outbound tourists find it cheaper to fly the Bagdogra route and employ operators in Jaigaon instead of the Bhutanese tour operators who are going out of business for want of work.

4. Loss of hundreds of millions in foreign exchange, including third-country currency such as dollars. Because dollar-paying potential visitors find the air fare too expensive, they choose competing destinations such as Sikkim, Darjeeling and Nepal for their annual holiday trips.

Need For Shift In Policy

To my mind, it would be simple to make DrukAir a respectable organization: categorize it as a service organization with a mandate to provide social/national service. This will require the government to subsidize its capital and operations costs to some extent. This is necessary because, on its own, DrukAir cannot survive, unless it exacts costs on others, which is what it is doing - on the country’s tourism sector.

Need For Subsidizing the DrukAir

DrukAir is a critical transport service provider for Bhutan’s vital tourism sector. The government should provide it subsidy - there should not be an iota of hesitation - so that the airline can help boost the country’s tourism business. It is the only way by which DrukAir can keep fares within the realm of sanity. Doing so will provide direct and indirect benefit to the country’s mortally maimed tourism industry and, consequently, to the society at large.

In this regard, Bhutan would not be a unique case. Such subsidies are specifically provided by governments around the world to provide a competitive edge to fledging local industries; to balance unfair competition from superior economies; to act as a counterweight to harsh and unyielding economic challenges; to heighten economic buoyancy; to prevent financial losses; to keep costs down so that ancillary industries can grow and prosper; and to ensure that critical services are not discouraged due to challenges outside their scope and competence.

In this sense, subsidies are not a loss but a responsibility of the government. Because DrukAir is a critical service provider, it deserves whatever subsidy is necessary to keep it afloat so that it can continue to serve an important national interest.

If subsidies were to be considered losses, we should forthwith close down our schools and hospitals and the civil service. They exist only because they receive 100% subsidy from the state.

Not all enterprises that the state creates are profit-centric. In 99% of the cases, they are service-oriented, either required to engage in areas that are sensitive or required to perform a service that no commercial entities are willing to undertake. 

A case in point is the Food Corporation of Bhutan (FCB) - another state-owned enterprise of the RGoB. This organization is not expected to make profit for the state. Its existence is solely for the delivery of essential foods to remote and underserved locations where enterprises of profit will not venture. Through government subsidies, the FCB is expected to ensure food security by delivering essential foods at affordable prices. Imagine FCB trying to make a profit!

We have to remember that even the most advanced economies of the world provide subsidies to selected industries - the transport sector being one of the highest-subsidized sectors. Every year, the European Union (EU) subsidizes its transport sector to the tune of €73 billion. Likewise, the transport sector in China receives a government subsidy in excess of US$130 billion a year. Germany is routinely accused by competing neighbors of continuing to operate its money-losing airports; it continues to subsidize them as a veiled way to gain competitive edge over others.

DrukAir’s Differential Pricing Policy

As if high airfare were not enough, DrukAir has adopted a strangely unfair differential pricing policy that discriminates between nationalities. It is not clear why this is beneficial. Given Bhutan’s strong ethical profile, it is important to treat every visitor as equal. We cannot be seen to prefer one nationality over the other.

Lower Fares For The Bhutanese

What is the logic behind lower fares for the Bhutanese nationals? It may be perceived to benefit the Bhutanese people. But as we can see, the Bhutanese flying the DrukAir are those who are rich and can afford to pay or, they are travelling bureaucrats on official business whose bills are paid for by the state. Needy Bhutanese people do not fly DrukAir - they take the bus. In my view, this is yet another example of the airline’s disservice to the country.

Preparing For Change

A direct initiative from the Throne, work on the upgrading of Gelephu airport has already started – slated to be ready within the next 4-5 years. The current airstrip is slated for massive expansion to accommodate larger aircraft.

This renovation opens up boundless opportunities for the DrukAir. Unfortunately, Gelephu International Airport is also likely to attract international competitors. Thus, DrukAir will need to dismount its high horse and prepare to beat the competition by being a step ahead to claim and retain market share. That forward-looking work cannot begin too soon.

Making A Case For Change

To summarize, I believe our leaders need to revisit the mandate of DrukAir in the clear light of day. Why has this national jewel been allowed to fade? How can we restore it to its original national purpose - and do so in the context of modern financial and commercial realities? How can DrukAir once again dedicate itself to a single and high-minded purpose: to serve the nation and people of Bhutan?

Let us begin the job NOW – before someone else steals our thunder – completely and irrevocably!

The National Flag Carrier Loses Out 80% Of Its Business Share To The Competition!

BREAKING NEWS!!!

The venerable Kuensel has finally found its voice - after suffering mumps for the past 60 years.

I am hugely encouraged! The following report by the Kuensel on the self-defeating foolishness of the DrukAir Corporation may be proof that the Kuensel is finally maturing into a responsible media house:

It is sad – and no less intriguing - that the Royal Government of Bhutan can continue to tolerate stupidity at this scale – in allowing the DrukAir to price themselves out of the market. Imagine, what commercial entity allows 80% of its market share to be usurped by the competition operating from outside their domain? And to think that they have a commanding position given that they are the country’s national flag carrier with advantages that their third country competitors do not have.

The country is ill-equipped to counter the long-term implications of DrukAir’s irresponsible behavior. The consequences of what they are doing goes far, far beyond loss of business; beyond the devastation they have already caused to the country’s vital tourism industry.

According to the Kuensel article, the DrukAir offers the reason that they are operating under conditions that are out of the normal. In other words, what they are saying is that they are justified in imperiling the lives and livelihoods of hundreds of thousands of Bhutanese people, as a consequence. That is a pathetic justification!

The benefit of tourism cuts across the entire spectrum of Bhutanese society. Some two years back, upon being invited to give a talk to the DeSuups who were being trained to be guides at the Phaduna Skilling Centre in Punakha, the following was one of the 33 PowerPoint slides I presented to the trainees:

ABTO puts the figure of licensed Tour Operators in the country at roughly 800. Sadly, a sizeable number of them have been driven to migrate to Australia and the US, in search of livelihood – one more is due to depart for Australia on coming Tuesday. The GAB puts the number of Licensed Tourism Guides at about 4,700. An official at the GAB tells me that today less than 700 of them have some semblance of employment.

If the superintendents and the management of the DrukAir has any conscience at all, they should know that they have played a major role in contributing to the bleak situation that is currently prevailing in the country’s tourism industry, in addition to the fact that their incompetence has resulted in rank outsiders to siphon away 80% of the market share that should have been rightfully theirs.

When it is clear that they are incapable of understanding the harm they are causing themselves ... it would be futile to expect that they would understand the consequences of their irresponsibility on the nation and the people of Bhutan.

Bhutan’s Hotel Industry in Crisis

Going by the following article appearing in the Kuensel of November 15, 2024, it appears that the crisis we had feared was being created is now a reality:

Even as the rumblings of the call for dismantling of the Minimum Daily Package Rate (MDPR) was gaining momentum, sometime during early 2022 a joint meeting was held between some select members of the Bhutan Sustainable Tourism Society (BSTS), Hotel & Restaurant Association of Bhutan (HRAB) and Association of Bhutanese Tour Operators (ABTO).

Voicing the collective concerns of the BSTS members, I was explicit in making the following point:

“Should the MDPR be dismantled, the hotel owners will stand to suffer the most”.

During a restricted gathering of select media personnel called for by the then Prime Minister Dr. Lotay Tshering, held at ThePema by Realm, on 18th June, 2022, I once again reiterated that the hotel industry would be the most impacted, should the Parliament go ahead and pass the tabled/proposed Tourism Levy Bill of Bhutan 2022.

The government took the stand that going into hotel business was purely a business decision that was outside the purview of the RGoB. I countered that while that would be true, the decision by the hoteliers would have been influenced solely by relevant policies in place, and that when those policies were altered, the government that did it has to bear onus for the ensuing crisis.

In our tireless effort to dissuade the government and the Parliament from enacting a grossly misconceived and poorly directed tourism policy that was foretold to be ruinous for the country, on 23rd June, 2022, some select members of the BSTS met the Members of the National Assembly’s Economic & Finance Committee. During the meeting, I minced no words in declaring:

“I am willing to give you in writing that the Government, the Tourism Council of Bhutan and the Department of Immigration were, not one of them, ready to implement the Tourism Levy Bill of Bhutan 2022.”

Even as the catastrophic Tourism Levy Bill of Bhutan 2022 was at the verge of being passed into law by the Parliament, Bhutan’s one and only Sustainable Tourism Specialist - Dr. Karma Tshering (PhD) - went on record, and wrote the following in the Kuensel issue of June 22, 2022:

“First and foremost, before any change or systemic overhaul is contemplated, it is critical to understand if a change is really necessary; the pertinent question to ask is: is something going wrong? Particularly when one is dealing with an industry that accounts for the highest foreign exchange inflow, and accrual of multifarious benefits that encompass the entire strata of the Bhutanese society, the government needs to exercise extreme caution – before it embarks on an exercise that could very well imperil a system that is perceived to be working. We need some serious thinking on the matter – what exactly is it that we are trying to fix?"

"Are we in a tourism crisis or are we creating one?”

So, are we finally in agreement that a crisis has indeed been created where none had existed? If yes, are we now finally going to Reset, Reboot and Restore?

Bhutan Bird Festival 2024

I just returned from attending the Bhutan Bird Festival 2024 held at Tingtibi, Zhemgang: 13th and 14th November, 2024. It was expected - and the Zhemgang Dzongkhag Administration did not disappoint - that after the less-than-flattering review of the poor show they put up last year, they would do a much better job this year - they did! The ebb and flow of activities was pulsating and the sparkle of the festival ground was palpable, to say the least.

And yet, there is where it all ended - the festival was akin to a bride - all dressed up in her Sunday best - but no takers and nowhere to go! The festival failed to draw in a single international bird watcher or a bird photographer. Meaning that the festival was a waste of time and waste of precious resources - for the purpose for which it was planned and hosted.

Who is to blame? The RGoB and the DoT!

Birdwatching is a long duration tourism activity. For a truly rewarding experience, the activity will require a birder to spend a minimum of 2-3 weeks to be able to cover the country’s various known birding hot spots. To be able to access bird-rich locations, they need to spend anywhere between 4 to 6 days - traveling back and forth.

It is for this reason that certain segments of the country’s tourism industry have been pleading with the government to consider long duration discounts for birdwatching and trekking and any other activities that require visitors to spend long durations in the country.

Zhemgang as a birding destination holds great promise - it is teaming with over 500 bird species - a substantial of them rare and critically endangered. One international resident bird photographer who attend the bird festival went hunting for his lifebird - the Rufous-necked Hornbill. Within less than two hours he sighted his “lifer” at Tama-La - barely 25 KMs away from the festival grounds in Tingtibi. Elsewhere he would have taken a lifetime to sight this rare bird.

Another unique bird photographer who is currently resident in Bhutan who was also at the festival chanced upon a flock of 10 flying Rufous-necked Hornbills - a truly rare, if not impossible, sighting elsewhere in the world.

For events such as Bhutan Bird Festival to be able to bring benefit to local communities and the tourism industry as a whole, we need to take ownership of our own initiatives.

It is sad - how long does the government intend to remain subservient to the rank outsiders and the clueless? It is not fair - please wake up and take control!

Scandal In The Holiest Of Places

I heard it from a friend nearly a week back …. I was told that it was being kept under wraps for the sheer shamefulness of it - but I was surprised to read about it on the front page of the Kuensel’s 27th July, 2024 issue.

The reported involvement of our men in Blue in the scandal that was recently unearthed at Taktsang is so terribly appalling. This is a manifestation of the rot that is setting in into our society - it cannot get any baser than this. When the custodians of law can be allured into turning into law breakers - the citizens have to start worrying.

What are we supposed to do? We can bundle these culprits inside sacks and throw them into the Wangchhu. But how many of them? And how often? That is not the solution to our problems.

We have to accept that such vile crimes become possible because we offer people the opportunity, and the reason, to carry them through. In other words, the onus must fall on the law makers - for their inability to design laws that help build a robust and law-abiding society. When laws begin to hinder lawful activities - citizens will resort to unlawful activities. That, sadly, is the way the cookie crumbles.

Think about it - monument fees have always been collected from tourists visiting Taktsang and other designated monuments elsewhere - it has been happening for decades. Then why is such scam happening now? Why did it not happen earlier - when the takings would have been many folds more than now because of the sheer superior numbers? Can we blame it on the sudden and abrupt decline in the morality and the ethical mores of the police, the guides and the drivers? And, if that is true, what is causing it?

Obviously, something has come to pass that is beginning to alter the very moral fiber of the Bhutanese people. Time may be at hand for us to realize the folly of our endeavors and make amends, before the opportunity is lost to us, irretrievably!

The case of Taktsang may be just the proverbial tip of the iceberg - it is a scary thought that this may be happening elsewhere. Consider the implications if this is happening at the Phuentsholing border gate!

Hollow Intergenerational Promises

Successive governments over the years have admitted that the private sector is the engine of growth and development. Sadly, the intergenerational promise of support for the private sector has remained nothing more than empty promises to be sung like a lullaby, every election year.

True to form, the PDP yet again promises to do so during their present tenure. According to Business Bhutan’s newspaper reporter Tashi Namgyal, the PDP is said to have said; “Tourism to remain as a key sector for growth”.

It would be unfair to believe that their pronouncements were ill-intended. No doubt the government knows that tourism industry generates the highest net-gain foreign exchange, it provides the highest number of employment and, beyond all doubt, its benefit is accrued to the broad spectrum of the Bhutanese society.

The government knows very well that the country can ill afford the collapse of the tourism industry because it has too many things riding on its back.

According to recent reports in the social media, I am told that Lyoenchen Tshering Tobgay has made a truly significant move – in an obvious attempt to help the tourism sector claw back to some semblance of life. He is said to have invited the managements of the two national airlines to speak to his government – to see how his government might help them bring some sanity in the fares charged by them.

To help His Excellency get a grip on WHY the most important private sector of the country is suffering, I would like to present the following image - it is a vivid testament, if any were needed, why the tourism industry has been bled to death:

I believe that no words are necessary - the picture tells the story.

Subsidizing The Wings Of The Dragon

The following is the state of affairs at the Druk Air’s ticketing counter in Thimphu yesterday: at the peak business hour of 11:08AM, of the ten service counters, only two of them are occupied. I can assure you that this is not a one-off happenstance – I was there day-before-yesterday as well – it was even worst – not even one counter was occupied.

Druk Air Thimphu's Ticketing/Reservation Counters

Any thinking person’s heart would bleed at such a wretched scene. Druk Air has near monopolistic grip over the air transport business in the country. By comparison, it has the largest fleet of aircrafts – it serves the widest network of domestic and international routes and, best of all, as the nation’s flag carrier, it has the assurance of the Kingdom of Bhutan’s sovereign guarantee backing it.

With all that going for it, why is the airline’s booking office looking like an abandoned wasteland (Sa Tong) in Trashiyangtse?

Simple: it got its priorities all missed up; the airline out priced itself out of the market. They drove their potential customers to their competing airlines in the region.

Druk Air is a national flag carrier - it has an obligation far greater than financial profit. Created as a symbol of nationhood, its roles and functions are distinct from those other run-of-the-mill public enterprises. Like the RBA was not created to fight a war but to secure our territorial boundaries, Druk Air was not created to make profit but to make a statement, and to give wings to liberate the Bhutanese people from the bondage of landlockedness. Sadly however, as time went by, the custodians of the organization got their priorities mixed up and the corporation became an organization that is akin to what the Indians have aptly described: Bandarong Ke Haath Mein Nariyal: Coconut In The Hands Of Monkeys.

But it seems like things are going to look up soon. Supposedly, His Excellency the Prime Minister Tshering Tobgay has invited the managements of the two national airlines to let him know how his government might help - if necessary - through subsidies - in order to help the airline companies keep their airfares within the bounds of sanity.

That is the way to go!

Finally, it would appear that realization is dawning on people who matter, that given the limitations imposed by the geographical make of our country, profitable operation of certain enterprises is not possible - unless the government provides them subsidy - in order that they can continue to provide certain critical services that is essential for the development of the country.

Government subsidies to the transport sector is not new - larger and more efficient economies around the world have been doing it, year after year. The European Union (EU) subsidizes its transport sector to the tune of €73 billion. Likewise, the transport sector in China receives a government subsidy in excess of US$130 billion a year. Germany is routinely accused by competing neighbors of continuing to operate its money-losing airports; it continues to subsidize them in a veiled way to gain competitive edge over others.

Remember, subsidizing critical sectors is not a cost to the government – in most cases it is a responsibility.

Druk Air is a critical service provider - on its back rides the all-important tourism industry. Bhutan's tourism industry's success, or failure, hinges on how responsibly the national flag carrier behaves. The government - the elected representatives of the owners of the airline - the Bhutanese public - have placed faith in their representatives to do their job. We are encouraged that the government is now attempting to  live up to its responsibilities.

The Burdensome Beasts

Social, cultural and religious traditions and practices are NOT God given – they are essentially necessitated or influenced by compulsions imposed by nature, climate, geography, and a number of other factors.

For many decades since I can remember, one of the practices I had noticed was that during the winter months, the mules and ponies from the Northern highlands would unfailingly migrate to low-lying places like Thimphu and Punakha where they would remain for a number of months. Then, come end February/early March, they would return to their homesteads spread across the alpine regions of Laya, Soi, Lingzhi, and Lunana. By mid-March, their winter grazing grounds would be completely void of these visitors from the freezing North.

Freed of all burden: Mules/ponies roaming listlessly around Thimphu Metropolitan areas

But this year I was surprised to see them still merrily loitering in and around Thimphu. This is early July – what the dang hell are they still doing here - impeding vehicular traffic and increasing workload for the workers of Thimphu Thromde (Thimphu Municipal Authority)?

A friend sitting by my side remarked:

“Wai Khengtala, are you suffering amnesia? Don’t you know this is PDP domain – mules and ponies are accorded primacy now”.

“Funny guy”.

But I was intrigued – they are supposed to have long gone to their alpine villages. What happened? Why are they still here?

Then it dawned on me:

Yet one more carcass by the wayside, resulting from the country’s failed tourism business!

First it was the Stray Dogs on the streets. Upon suspension of tourism – the strays on the streets began to suffer starvation – the situation got so bad that His Majesty had to institute a stray dog feeding program.

Then we heard wails of woe from the Walking Stick Fashioners at the base of Taktsang. They complained that they have been deprived of their employment and livelihood - there were no buyers for their wooden walking sticks.

Next, I got to hear of the sad demise of the wooden Phallus Carver from Lingzhi who use to plonk himself by the road side next to the Zangthopelri near the Vegetable Market - morning to night - every day. He supposedly died of withdrawal - because without the income from a stream of tourists who use to buy his wares, he had no income to finance his nightly quota of booze.

CONTEXT

Mules/Ponies are beasts of burden. During the pre-pandemic days when tourism flourished unabated, there was a continuous flow of trekkers who required the services of thousands of mules/ponies. The highlanders who owned these animals would earn huge sums of money every trekking season. To give you an idea, I use to pay a hire charge of Nu.1,700.00 per day, per pack pony, and Nu.2,500.00 per day for every ridding pony I required.

The business was so lucrative that my pony contractor in Laya would make an annual trip every year to Mongaar – to buy feed for his animals: a truck load of corn/maize. The areas where I used to trek had no grass for his animals – so he had to carry the feed from home.

Every trekking trip I would require a minimum of 15 ponies.

Now that the tourism business has been driven into the ground, these animals are no more the beasts of burden. Instead, they have now become BURDENSOME BEASTS. Thus, from all indications, it would appear that their owners have put them to pasture!

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.