is pleased to announce the Tourism Policy of the Kingdom of Bhutan
2021.
The policy envisions promoting Bhutan as a green, sustainable, inclusive, and high-value tourism destination guided by the policy of ‘High-value, Low volume’ tourism to contribute to the overall socioeconomic development of the country. The policy sets the agenda and direction for sustainable tourism development in the country through key reform measures and institutional strengthening.
Tourism has the potential to create greater benefits across its diverse value chain benefiting various sections of society. It is important that the type of tourism and the reforms thereof are in the larger interest and future benefits of the industry and country. Further, given the multi-sectoral nature of the tourism industry, it is important that engagement, partnerships, and collaborations at all levels are strengthened and tourism-friendly sector policies and plans are given the highest consideration by the sector stakeholders for tourism to grow and benefit all.
Tourism is a strategic and valuable asset like any other natural resource for the country and people and hence critically important to harness its benefits in a sustainable manner, acceptable to our society and strengthening rather than undermining our nature, culture, tradition religion, and more importantly to avoid short term quick material gains.
The current COVID-19 pandemic has created unprecedented impacts on people and economics with tourism being one of the most impacted. It has also given us the opportunity to rethink, review, and reset to become more robust and resilient as we strive toward recovery.
The promotion and development of sustainable tourism are even more relevant in the current context of the pandemic. It is now important for us to build on the foundation that we have with robust reforms that will bring greater benefits for all through sustainable and inclusive tourism.
It is my sincere hope that the Tourism Policy of the Kingdom of Bhutan, 2021 will guide and benefit the industry stakeholders and the country in promoting sustainable tourism.
Lyonpo Dr.Tandi Dorji,
Glossary
Tourism: Refers to the activity of a visitor and includes trips away from one’s usual environment (residence) for any purpose other than employment by a resident entity in the place visited. The duration of stay shall be as prescribed by the Immigration Act of the Kingdom of Bhutan.
Tourist: Refers to all visitor who travels to a country (inbound/outbound tourism) or place (domestic tourism) other than that in which he/she has his/ her usual residence, and whose purpose of the visit is other than employment by a resident entity in country/place visited. The duration of stay shall be as prescribed by the Immigration Act of the Kingdom of Bhutan.
Domestic Tourism: Comprises the tourism activities of a resident within the country of reference.
Inbound tourism: Comprise of tourism activities of non-resident visitors within the country of reference on an inbound tourism trip.
Outbound Tourism: Comprises the tourism activities of a resident of a country outside the country of reference.
Tourism Industry: Is a cluster of production units in different industries that provide consumer goods and services for visitors. Such industries are called tourism industries because visitor acquisition represents a significant share of their supply that, in the absence of visitors, their production of these would cease to exist in meaningful quantity. This includes accommodation, travel, food and beverage services, guiding services, national parks, museums, entertainment, etc.
Minimum Daily Package Rate (MDPR): Refers to the minimum rate paid by all leisure tourists for an all-inclusive package tour to Bhutan. This includes the Sustainable Development Fee component and payment for the all-inclusive service package (accommodation, meals, guides, and ground transport within Bhutan).
The current MDPR is USD 250 per person per night during the months of March, April, May, September, October, and November and USD 200 per person per night during other months of the year (December, January, February, June, July, and August). For both periods the SDF is fixed at $65 per person per night.
The MDPR will not apply to countries granted exemptions by the RGOB which currently includes nationals of Bangladesh, India, and Maldives. However, for this category of leisure tourists, an SDF will be applied. The SDF will be determined by the RGOB based on the need to manage the pressures on our society, culture, and environment.
Sustainable Development Fee (SDF): Refers to the tourism levy on all leisure tourists per person per night and is applicable throughout the year as a contribution towards sustainable development initiatives undertaken by the Government and to compensate for the negative environmental impacts associated with tourism.
The SDF is levied as per the Tourism Levy Act of Bhutan 2020.
Ecotourism: High value, Low impact travel that supports the protection of cultural and natural heritage; provides positive and enriching experiences for visitors and hosts; assures tangible benefits to local people; and contributes to the pillars of Gross National Happiness. (Ecotourism Development in the Protected Areas Network of Bhutan Guideline, 2012 Nature Recreation and Ecotourism Division, MoAF / Department of Tourism)
Green: Refers to activities that have a low carbon footprint are eco and energy efficient and contribute to the conservation and preservation of our environment.
Sustainable: Promoting tourism in a manner that will meet the needs of the present tourists, destinations, and citizens while protecting and enhancing their needs and opportunities for the future.
High-value destination: Creating good value for money, revenue and yield, quality infrastructure, tourism products and services, high-quality experiential tourism, and Brand Bhutan.
Inclusive: Refers to creating opportunities for participation in tourism and sharing of benefits for all Bhutanese and travelers including vulnerable sections of the society.
1 Introduction
Bhutan’s participation in the international tourism industry began with the first group of 287 tourists visiting Bhutan in 1974. This was preceded by the adoption of the first rules governing tourism in the country in 1972. Since then, Bhutan’s tourism industry has followed a uniquely sustainable approach of High Value, Low Volume, mindful of tourism’s contribution to socioeconomic development and the negative impacts associated with it.
The premise of our tourism policy is rooted in the overall development philosophy of Gross National Happiness and seeks to promote sustainable tourism that meets the needs of present visitors and destinations while enhancing and ensuring opportunities for the future. Bhutan has consistently sought to ensure a cautious tourism industry growth that is within the carrying capacity of our physical, socio-cultural, and natural environment.
Bhutan’s tourism industry continues to grow to become one of the major economic sectors contributing significantly towards the socioeconomic development of the country through revenue and foreign currency generation and employment creation amongst others. In 2019 Bhutan recorded a total of 315,599 visitors which is an increase of 15% over 2018.
While Bhutan has benefitted immensely from the growth in the tourism sector, it is also faced with challenges particularly associated with the substantial increase in the volume of tourists. The growth in the industry has also been accompanied by social, cultural, and environmental issues, which are anticipated to grow in the future. Further, the shift and sophistication in the demand and behavior of tourists for meaningful travel experiences also necessitate the need for growth and diversification of tourism products and destinations, including authenticity, contacts with local communities, and learning about culture, tradition, flora, and fauna, etc.
This calls for a sustainable approach to tourism development which requires the informed participation of all relevant stakeholders. It requires maintaining a high level of tourist satisfaction and ensuring a high-value experience for the tourists, raising awareness about sustainability issues, and promoting sustainable tourism practices amongst tourists, and the service providers. It is of utmost importance to undertake constant monitoring of impacts, introducing the necessary preventive and /or corrective measures where necessary. Hence a dynamic tourism policy to change and adjust to these changing demands of international travel and tourism has become necessary.
2 Rationale
The travel and tourism industry in Bhutan and around the world has undergone significant growth and changes particularly with the changing dynamics of traveler behavior and the travel markets. These developments and the absence of documented comprehensive policy framework have resulted in challenges relating to policy clarity, planning, and coordination for the development, promotion, and regulation of the tourism industry.
Bhutan recorded a total of 315,599 visitor arrivals in 2019, of which 72,199 consisted of arrivals from MDPR-paying countries while 242,947 constituted those from countries exempted from paying MDPR.
While the government has been undertaking initiatives to promote tourism in all regions of the country, the visitations are largely concentrated in the western region. Visitor arrivals trend over the past years shows that tourist visitation is mainly confined to the western region of Paro, Thimphu, and Punakha. More than 80 % of the total bed nights are spent in the Western region. This was followed by the central circuit while the Eastern and Southern Circuits received the least number of tourists and the least share of the total bed nights. This has been attributed to limited infrastructure and support facilities, a lack of awareness, and information on the tourism products available in other areas amongst tourists and service providers. For instance, 70 percent of the TCB-accredited tourist accommodations are located in the western region mainly in Thimphu, Paro,
Punakha and Wangduephodrang Dzongkhags. The 6 eastern districts have a minimal number of star-rated hotels. Similarly, the Southern circuit has the least number of tourist accommodations and the existing ones are all located in Phuntsholing/Chukha except for one in Tsirang. Other tourism services such as rental services for cars, trekking, cooks, and guides are also all concentrated in the western region.
While the issue of seasonality has been improving, efforts are still required to promote Bhutan as a year-round destination. The highest number of arrivals is in April, May, and October. The number of visitors drops to around 4% of the total arrivals during the months of February and July.
Tourists from the USA, China, Singapore, Thailand, Japan, the United Kingdom, and Germany continue to be the major contributors to the tourism industry among those who pay the MDPR. More than half of the international tourists were from Asia-Pacific followed by 24.8 percent from Europe and North America. In terms of volume, tourists from Bangladesh, India, and Maldives dominate the market.
The growing popularity of Bhutan as a travel destination has resulted in increasing arrivals mainly from the countries in the region. However, with our limited infrastructure and carrying capacity, it has become increasingly challenging to maintain our policy of High value, Low volume and ensure an authentic and quality experience for tourists. The increasing number of visitors has also resulted in the following emerging issues:
The efforts of the Government to address the above issues are constrained without a comprehensive policy. There is no clear direction on how to manage and regulate the unprecedented growth of visitors.
In the absence of a tourism policy, the Economic Development Policy (2016) guides the tourism industry development based on which the Fiscal Incentives (FI) 2017 was developed. The FI 2017 provides incentives to the tourism sector in terms of direct tax exemption in the form of income tax holidays for tourist standard hotels and farmhouses/homestay and indirect tax exemption in the form of sales tax and customs duty exemptions to tourist operators for buses, adventure and recreation equipment and furniture, kitchen equipment, and fittings for tourist standard hotels.
There is an urgent need for a Tourism Policy to set the agenda and direction for the development of the tourism industry and manage its intended and unintended consequences. The TCB shall develop rules, regulations, and guidelines including a comprehensive Strategic Development Plan for the implementation of this policy.
3 Title, Commencement, and Application Title
This Policy shall be known as the “Tourism Policy of the Kingdom of Bhutan 2021”.
Commencement
This Policy will come into force from the 22nd Day of the 11th Month of the Male Iron Rat Year of the Bhutanese calendar, corresponding to the 5th day of the first month of the year 2021, and remain in force until superseded or amended.
Application
All matters relating to tourism shall be governed by this Policy and the relevant laws of the Kingdom of Bhutan.
4 Guiding Principles
The guiding principles which underpin Bhutan’s vision for sustainable tourism are:
Refers to targeting mindful and responsible visitors, creating good value-for-money experiences, high revenue and yield, quality infrastructure and tourism products and services, and Brand Bhutan. While ensuring that the number of tourists Bhutan receives is consistent with the absorptive carrying capacity of our natural endowment, socio-cultural values, and infrastructure and does not exacerbate our vulnerabilities as a small nation.
5 Vision
A green, sustainable, inclusive, and a high-value tourism destination
6 Objectives
The objectives of the Tourism Policy of the Kingdom of Bhutan are:
7 Policy Statements
The Tourism Policy of the Kingdom of Bhutan seeks to achieve the vision and objective through the following policy statements. The policy statements are identified under different strategic domain areas of intervention.
7.1 Sustainable Tourism Development
a) AdoptionofappropriatepricingandothermechanismssuchasSDFand MDPR.
b) Allleisuretouristsexceptthosefromcountriesgrantedexemptionsbythe RGOB will have to pay the MDPR which includes the SDF component and payment for the all-inclusive service package which includes accommodation, meals, guides, and ground transport within Bhutan.
c) TheMDPRwillnotapplytocountriesgrantedexemptionsbytheRGOB which currently includes nationals of Bangladesh, India, and Maldives. However, for this category of leisure tourists, only SDF will be applied. The SDF is different from any other fees.
d) The SDF shall be a tourism levy to compensate for the negative environmental impacts associated with tourism. It will not cover the expenses related to the visits such as accommodation, food, travel, and other tourism-related services and SDF shall be different from any other fees.
e) TheSDFandMDPRwillberevisedanddeterminedbytheRGOBbasedon the need to manage the pressures on our society, culture, and environment.
f) The implementation of the SDF shall be guided by the Tourism Levy Act of Bhutan 2020.
7.2 Positioning Tourism in Development Policies and Programmes
1. The RGOB shall position tourism in the national development planning and strategies given its contribution to the economy.
2. The RGOB shall integrate requirements related to tourism into the sector policies and plans.
3. The RGOB shall strengthen the collection, storage, analysis, use, and dissemination of data and statistics related to tourism for purposes of the development of the industry.
7.3 Strengthen Tourism Governance and Institutional Setup
a) Develop and/or Strengthen legislation or regulatory frameworks for tourism.
b) Provideadequateresourcesandmanpowerincludingskillsenhancement and upgradation
c) Strengthenandexpandtourismrepresentationwithinthecountryandin major international markets through the Bhutan missions abroad.
7.4 Improvement of Tourism Products and Investment Environment
1. The RGOB shall create a conducive business environment to encourage tourism investment through the following interventions:
a) Targeted performance-based incentives and facilitate land leases for tourism infrastructure.
b) Enhanceandimprovetravelfacilitationservicesbystreamliningprocesses and improving efficiency in the delivery of services.
c) Streamlinealltourismbusinessesandservicesestablishment, operations, and regulatory compliance through the TCB.
d) Streamline and simplify processes for tourism businesses.
e) Collaborate with relevant stakeholders to leverage information and communication technology through the implementation of a tourism ICT Master Plan to promote tourism, service delivery, and visitor experience enhancement such as online payment facilities.
f) Improve access to and within Bhutan by improving and expanding air and road connectivity which may include opening an alternate international airport.
2. TCB in collaboration with relevant stakeholders shall improve tourism products and offerings to enhance the visitor experience through the following mechanisms:
a. Diversify tourism products with special emphasis on unique offerings and comparative advantage taking into consideration needs for geographical spread and year-round tourism. This shall include but not be limited to:
a. Develop and implement Brand Bhutan strategies to differentiate Bhutan from the competing destinations.
b. Strengthen the promotion of Bhutan as an exclusive destination through innovative marketing and communication strategies.
7.5 Seasonal and Geographical Spread of Tourism
1. The RGOB shall undertake the following measures to promote tourism as a year-round activity:
2. The RGOB shall undertake the following measures to encourage the spread of tourism activities in tourism-deficient regions of Bhutan:
7.6 Standard and Quality
7.7 Human Resource Development
7.8 Partnerships and Collaborations
7.9 Inclusive and Integrated Tourism
1. The TCB in collaboration with relevant stakeholders shall promote inclusive and integrated tourism through:
1.
2.
8 Role of Stakeholders
A responsible collaborative approach will enable the promotion of tourism that is economically viable, environmentally sustainable, and culturally acceptable. The implementation of the policy will be a shared responsibility. Every stakeholder including the visitor, comprising of the following but not limited to:
The policy of ‘High-value, Low volume’ tourism in Bhutan envisions promoting the country as a green, sustainable, inclusive, and high-value tourism destination. It aims to contribute to the overall socioeconomic development of the country by setting the agenda and direction for sustainable tourism development through key reform measures and institutional strengthening. The policy is focused on promoting tourism that is sustainable, inclusive, and of high value, with a low impact on the environment and culture of the country.
Bhutan promotes sustainable tourism by setting a minimum daily package rate (MDPR) for all leisure tourists, which includes the Sustainable Development Fee (SDF) component and payment for the all-inclusive service package, such as accommodation, meals, guides, and ground transport within Bhutan. The SDF is a tourism levy on all leisure tourists, which is applicable throughout the year as a contribution towards sustainable development initiatives undertaken by the Government and to compensate for the negative environmental impacts associated with tourism. The country also practices ecotourism, which is high value, low impact travel that supports the protection of cultural and natural heritage, provides positive and enriching experiences for visitors and hosts, assures tangible benefits to local people, and contributes to the pillars of Gross National Happiness.
The minimum daily package rate (MDPR) for leisure tourists in Bhutan is USD 250 per person per night during the months of March, April, May, September, October, and November and USD 200 per person per night during other months of the year (December, January, February, June, July, and August). This rate includes the Sustainable Development Fee (SDF) component and payment for the all-inclusive service package, such as accommodation, meals, guides, and ground transport within Bhutan.
The Sustainable Development Fee (SDF) in Bhutan is levied as per the Tourism Levy Act of Bhutan 2020. The fee is determined by the Royal Government of Bhutan (RGOB) based on the need to manage the pressures on society, culture, and environment. The SDF is a tourism levy on all leisure tourists, which is applicable throughout the year as a contribution towards sustainable development initiatives undertaken by the Government and to compensate for the negative environmental impacts associated with tourism.
The current COVID-19 pandemic has had unprecedented impacts on people and economics with tourism being one of the most impacted. The pandemic has led to a significant decline in the number of tourists visiting Bhutan, which has affected the country’s tourism industry and its socioeconomic development. However, the pandemic has also given Bhutan the opportunity to rethink, review, and reset its tourism policies and practices to become more robust and resilient as it strives towards recovery. In this context, the promotion and development of sustainable tourism are even more relevant, and it is important to build on the foundation that exists with robust reforms that will bring greater benefits for all through sustainable and inclusive tourism.
| Stakeholder Type | Role in delivering Sustainable Tourism |
| Role of Government | Position tourism in the country’s development agenda and government priorities Facilitate and encourage the inclusion of tourism in sector policies and plans Create enabling conditions to facilitate tourism development; consistent with the national security priorities and policies Consider enactment of tourism legislation to implement policy; Provide adequate budget provisions and human resource for tourism development and promotion. Uphold High-value Low volume tourism policy |
| Role of Central Agencies | Facilitate and support tourism development initiatives. Consider tourism in policies and development plans Facilitate in providing services related to tourism. Support infrastructure planning and development. Regulate tourism in line with existing laws, rules and regulations |
| Role of the Private Sector | Invest in the tourism and hospitality industry Ensure safety, security, and health of all visitors Operate business according to appropriate standards and code of ethics Involve local communities in the tourism industry by establishing partnership venture integrated economic, social, cultural, and environmental sustainability issues in business development and operation |
| Role of Local Government | Support integration of tourism initiatives in the LG plans. Undertake tourism plans and programs in consultation with TCB. Facilitate in providing services related to tourism Facilitate and support monitoring of tourism facilities and services |
| Role of Communities | Organize and take active participation in tourism Promote sustainable tourism development which enhances the local environment and culture of the area. Represent and communicate local community interests. Enter into partnerships with investors in tourism businesses and facilities |
| Role of CSOs | Facilitate the development and implementation of tourism-related plans and programs in partnerships and collaboration with TCB. Support strategic planning and development Capacity building and provision of expertise |
| Role of Tourists / Visitors | Act in a manner that respects the local culture, values, laws, traditions, and protection of nature. Support our local economy. Be a responsible guest |
| Role of Individual Bhutanese | Respect and support the national tourism policy Be a brand ambassador for Tourism Bhutan and uphold the objectives of the national tourism goals. |
| Role of Media | Tourism awareness program to the population at large. Promotion of domestic tourism through familiarization trips and press reports on different places of tourist attractions. Provide an important link to national public relations efforts Portray a positive image of Bhutan as a tourism destination |
| Education and Training Institutes | Knowledge gathering and dissemination Capacity building and training Create awareness of Tourism Policy |
| Tourism Sector Associations | Facilitate the development and implementation of tourism-related plans and programs in partnerships and collaboration with TCB. Engaging in strategic planning and development Facilitate in providing services related to tourism. Monitoring |
| Tour operators | Support implementation of the policy, plans, and programs. Uphold High-value Low volume tourism policy Operate business according to appropriate standards and code of ethics Ensure safety, security, and health of all visitors Involve local communities in the tourism industry by establishing partnership venture integrated economic, social, cultural, and environmental sustainability issues in business development and operation Promote and conduct ethical business practices |
| Hoteliers | Support implementation of the policy, plans, and programs. Uphold High-value Low volume tourism policy Operate business according to appropriate standards and code of ethics Ensure safety, security, and health of all visitors Involve local communities in the tourism industry by establishing partnership ventures integrated economic, social, cultural, and environmental sustainability issues in business development and operation Promote and conduct ethical business practices |
| Guides | Support implementation of the policy, plans, and programs. Uphold High-value Low volume tourism policy Ensure the safety, security, and health of all visitors Conduct oneself according to appropriate standards and code of ethics Promote and conduct ethical business practices |
| Other Tourism Service Providers | Support implementation of the policy, plans, and programs. Uphold High-value Low volume tourism policy Operate business according to appropriate standards and code of ethics Ensure safety, security, and health of all visitors Involve local communities in the tourism industry by establishing partnership ventures integrated economic, social, cultural, and environmental sustainability issues in business development and operation Promote and conduct ethical business practices |
9 Formulation, coordination, and implementation
10 Monitoring and Evaluation
11 Amendment