Bhutan making it easier to visit to revive economy

FOR a country that’s long prioritised a balanced lifestyle and good governance over economic gain, Bhutan is doing something it’s never done before: embrace more independent, cost-conscious travellers in an urgent bid to revive its faltering economy.

Tshering Tobgay, now prime minister, characterised Bhutan’s economy as “on the brink of collapse” in a November 2023 election manifesto for his People’s Democratic Party, citing an average economic growth rate of just 1.7 per cent over five years. As a result, Bhutan is seeing high levels of youth unemployment and dwindling foreign currency reserves. Tourism is seen as a major lever to pull.

Bhutan welcomed 103,000 visitors in 2023, about two-thirds below its pre-pandemic record reached in 2019. The new goal is to return as quickly as possible to just over 300,000 visitors annually, but with a more diverse consumer base. Bhutan would like to get at least half its visitors from non-Asian markets, specifically the US, Europe and Australia; Indian travellers accounted for more than 73 per cent of total arrivals in the last full year before the 2020 Covid lockdowns.

“We can grow in a manner that is balanced and true to the principles of gross national happiness (GNH),” said Togbay, when asked about proposed plans to turn the economy around. Its GNH index measures the well-being of its residents–from living standards to health to cultural and environmental preservation.

Since Bhutan started welcoming tourists in 1974, it has built its reputation on low-volume crowds and high-paying guests, drawn to sweeping Himalayan mountain vistas and Buddhist monasteries perched on cliffs. As a result, it also earned a reputation as being inaccessible to the average tourist.

Now to incentivise the growth of travel, Bhutan is addressing those roadblocks real or perceived around access and cost. 

Twice-weekly flights from Dubai to Paro on Drukair Royal Bhutan Airlines kicked off in October, connecting Bhutan to the Middle East for the first time. Previously, international travellers had to connect through major Asian hubs like Singapore or Bangkok, or transit through India. 

In August, a first-ever online directory and booking portal started allowing for à la carte planning by letting travellers easily filter vetted and licensed Bhutanese providers, which previously would have been impossible to sort through without the help of a local travel agency or tour operator. 

Independent-minded traveller can browse, compare and directly book tour guide services–still mandatory when visiting Bhutan–and accommodations, giving them the tools to shape their own trip at potentially lower costs. In the past, choices in tour operators would be limited to just a handful of companies, making it harder to compare and shave off added costs. 

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The portal currently lists more than 1,000 guides, 471 tour operators, over 100 hotels, 29 homestays and 9 restaurants. Forthcoming is a section featuring licensed car rentals, Bhutan’s tourism board says, as well as shops. In a release, Kinley Gyeltshen, chairman of the Bhutanese Tour Operators Association, called the new portal “a game-changer for tourists visiting Bhutan.”

In addition to potential savings through self-booked trips, the mandatory daily sustainable development fee per adult has been slashed from US$200 to US$100 through August 31, 2027. (There are additional discounts for travellers from neighbouring India and children under 12.)

The fee funds health care and education for residents, as well as sustainability and infrastructure projects. The government lowered it in September 2023, after tour operators voiced concerns that it was driving up travellers’ costs at a time when global market conditions saw fewer tourists heading to Asia compared to the rest of the world (except for Japan).

This initial effort helped the small country increase its arrivals by 97 per cent in the first quarter of 2024, compared with the same period a year ago. The pickup in numbers reflects a more diverse crowd, too, with gains from the China, Germany, Singapore, the UK and the US.

Namgyal Dorji, Bhutan’s minister of commerce, industry and employment, confirms the government’s vision for Bhutan’s tourism remains “firmly rooted in a commitment to a high-value, low-volume approach that honours and preserves the country’s unique cultural and environmental heritage.”

In anticipation of a potential growth in visitor numbers beyond pre-pandemic numbers, he adds, the government has “adopted a balanced approach that prioritizes sustainable infrastructure enhancements, immersive experiences reflecting Bhutan’s core values, and consistently high-quality visitor experiences.” 

Brent Olson, founder of Ethos Bhutan, says the growth of tourism to Bhutan over the years is evident. Olson, who plans customised trips and leads small group journeys to Bhutan, has been visiting the country since the late 1980s.  

“It doesn’t take much to overwhelm such small towns and cultural sites,” he adds. This means visiting the country during peak festival months–October, November, April and May–“can be a bit of a scrum,” he says. That has always been true, but it’s more of a factor as tourism grows each year, even with fewer arrivals since the pandemic.

Marketing the destination more broadly has its risks: Bhutan has been appearing more frequently on social media feeds as the government and tour operators tap into travel influencers to promote the country. 

“They’re caught with that dilemma of [wanting] to increase numbers, but then you pay the penalty for that with the effect of influencers,” Olsen says. “Once that social media gets out there and hooks millions of people, they all are like lemmings and they follow the same path–it’s a tricky balancing act.”

Bhutan’s prime minister Togbay has said that if demand outstrips the 300,000 visitor threshold, the sustainability fee may go up. Dorji confirms a state of alertness. “As Bhutan gains international visibility, especially through social media and influencers,” he says, “we recognise both the opportunities this brings and the responsibilities we hold to manage it wisely.”

Which means there’s no time like now to beat the crowds who are thinking about visiting the Land of the Thunder Dragon.  

Most travellers look to visit the golden triangle of Paro, the gateway to Bhutan and home to the iconic Buddhist monastery, Tiger’s Nest; Thimphu, the capital city, a modern hub with plentiful shopping for local handicrafts; and Punakha, the ancient capital, with its lush river valley scenery. These can be squeezed into a week’s stay, but having at least 8 to 10 days would mean you could also venture farther east into central Bhutan’s Bumthang Valley, considered the cultural heart of the country and home to Buddhist temples dating back to the 8th century CE.

You could research and book your entire trip à la carte, using the new online portal–finding guides and accommodations on your own. But it’s still challenging to parse the options and know what’s the best value for your money. Your best bet remains delegating the planning. BLOOMBERG