Bhutan, the Himalayan kingdom, has decided to reduce the daily fee charged to tourists by half, aiming to revitalize its struggling tourism sector, which continues to face challenges even a year after the end of Covid-19 restrictions, CNN reports.
Bhutan had increased its "Sustainable Development Fee" to $200 per visitor per night, up from $65, when it lifted two years of Covid restrictions in September of the previous year. The rationale behind the fee increase was to offset the carbon footprint resulting from visitor activities.
According to an official statement released on Friday, the new rate of $100 per night will take effect from September and will be applicable for a four-year period. The government's decision stems from recognizing the tourism sector's significance in terms of generating employment, earning foreign exchange, and contributing to overall economic growth.
Having been secluded for generations, Bhutan embraced tourism in 1974 with just 300 visitors. The tourist influx surged to 315,600 in 2019, marking a 15.1% increase from the previous year, as per official data. Bhutan, however, has been cautious about the potential negative impacts of mass tourism and has even banned mountain climbing to preserve its peaks' sanctity. The higher tourist fee has acted as a deterrent for mass arrivals, allowing for a more selective inflow of visitors who tend to spend more, in contrast to the neighboring Nepal.
Despite this cautious approach, Bhutan aspires to elevate the tourism sector's contribution to its $3bn economy from around 5% to 20%.
Dorji Dhradhul, the director-general of the Department of Tourism, expressed optimism that the reduction in the fee could attract more visitors during the peak tourist season from September to December, which encompasses numerous religious and cultural events in the predominantly Buddhist nation.
In an effort to stimulate tourism, the government had relaxed regulations on stay durations and fees for tourists in June. However, the expected increase in tourist numbers has not materialized.
Dhradhul noted that over 56,000 tourists had visited Bhutan since January, but a significant portion (about 42,000) comprised Indian nationals who pay a reduced fee of 1,200 Indian rupees ($14.5) per day.
Tourism supports approximately 50,000 jobs in Bhutan and used to contribute around $84mn annually to the economy through foreign exchange in the three years preceding the pandemic.
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