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Tourism
Industry in Bhutan
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Thimphu's
growth raises environmental concerns
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Bhutan Tourism |
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Bhutan Information |
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Tourism
2001: Growth or Stagnation?
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| Bhutan:
An exotic tourist destination |
If
there was a beauty contest for the exotic tourist destinations (not considering
the number of arrivals), Bhutan would be definitely one of the potential
contestants to wear the crown. If not, at least, it is sure to win Miss
Exotic Beautiful Smile. Bhutan has an assembly-line of beauties - cultural
and religious heritage, friendly people, the lure of the Himalayas - enough
to win the crown year after year. But is winning a crown enough? . |
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There
are many Bhutanese, mostly tourism entrepreneurs, who are beginning to
wonder if we have constricted our thinking to only controlled tourism policy
that we are forgetting to tap the maximum - without undermining our culture
and environment. Of course, it must be pointed out that it is mainly the
present tourism policy that has given the country an image of exclusivity,
one of the main attracting factors for tourists
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In
the Eighth Plan the government's policy toward tourism is to "increase
revenue and foreign exchange earnings, while at the same time focusing
on quality so as to strike a healthy balance between economic gains and
the protection and preservation of the country's rich cultural, religious
and natural heritage". But, is Bhutan fully using its tourism potential
as a catalyst to generate employment, earn foreign exchange and to spur
the country's economic growth? If Bhutan can attract more tourists without
any negative impacts, why not? Most tourism entrepreneurs believe that
Bhutan has the potential. In a draft report on the export strategy of Bhutan,
a consultant, Mr. Sunil Sinha, noted that even with 25,000 to 30,000 visitors
a year, tourism density and penetration ratios for Bhutan would be much
less than any of the small islands of the Caribbean and the South Pacific.
The comparatively large land area of the country should ensure that the
tourists can be accommodated without concentrating numbers in any one given
place. He also found out that in 1997, the estimated 560 hotel rooms in
the country allowed 204,000 room nights to be sold per annum. As against
this, 5,363 tourists spent an average of seven nights each, resulting in
37,000 nights maximum, assuming that each tourists stayed in a separate
room. Even with this unrealistic assumption, occupancy levels were below
20 percent against a benchmark for the industry of 60 percent occupancy.
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| Tour
operators: Room for growth |
"I
fully support and appreciate the government's policy of controlled tourism,
but within that parameters there's room for growth," said Ugyen Rinzin
of Yangphel Tours and Treks. Almost all the travel operators support the
statement. In the year 2000, in the six months of the high season, about
36 tourists visited Bhutan in a day but only about six a day during the
off-seasons. The high season of March, April, October and November alone
brought in about 70 percent of the total tourists, averaging about 43 a
day. In the last six years, an average of about 15 percent of the yearly
arrivals were during the off-seasons.
The annual growth rate of the tourism
industry in the last 10 years was about 11 percent in average. The year
2000 saw a boom in the world tourism which grew by an estimated 7.4 percent.
Though Europe was a star performer, South Asia was another success story
with a growth of nine percent. According to the key trends so far, there
is enough reason to believe that the industry has reached a stagnation
point, if the tourist attractions are not diversified and if no new products
are created. An important move, identified both by the department of tourism
and the travel agents, was to attract visitors during the low seasons.
Bhutan is one of the least visited destinations in the world and the hand-full
that visited in the last 10 years show an increase in cultural tours with
high concentration of arrivals during the three tshechus of Paro, Thimphu
and Jambay Lhakhang which have always roped in about 50 percent in average.
According to Ugyen Rinzin, the Paro and Thimphu tshechus are "over-sold
and will still be the biggest draw for many years to come".
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| A
destination for heritage and cultural tourism - Trekkings: Nepal is much
cheaper |
Over
the last few years, Bhutan's image in the world tourism arena as a destination
for heritage and cultural tourism has been augmented. Meanwhile, the trekkers
have come down to about 12 percent of the total arrivals in 2000 from about
30 percent in the late 1980s. But paradoxically, this decline have put
more pressure on the cultural tours, apparently on the three tshechus,
which given the present infrastructure have absolutely no capacity to absorb
more. Even by the pattern of treks, about 40 percent of the total trekkers
have used Jhomolhari trek out of the existing 13 routes.
The proprietor
of Snow Leopard, Singye Dorji, blamed the poor equipment used by the Bhutanese
travel operators, irresponsible trekking guides and poor services for the
decrease in trekkers. To take the focus away from the Jomolhari trek, he
said that the new trekking routes must be opened. The impact of tourism
on the Jomolhari route is already visible with many toilet pits dug around
the camping sites. During the low seasons, he suggested opening of new
routes in the low altitude areas where there are no problems. "There are
some repeat clients who have done the Jomolhari trek for five times," he
explained. "Give them a new route and they will definitely come."
The managing
director of Etho Metho, Dago Bidha said that the number of trekkers had
decreased because the tourists go to Nepal where it's much cheaper with
similar mountains and vegetation and with an added bonus of easy accessibility.
Notably, the Bhutanese tourism industry sold only about four products.
The vulnerability of these products to the negative impacts of tourism
have increased over the years. If the trend continues, the concentration
will be further magnified as the travel operators will try to sale the
"easiest products" and could end up compromising the quality of the services.
The concentration will also pose difficulty in the preservation of the
products which attracted the tourists in the first place. Eventually, the
whole tourism industry will receive the flak. This trend of extreme seasonal
business also contributed to the poor economics of the hotel industry.
The diversification of tourism products and development of basic infrastructure
have become very important to the growth of the industry.
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| Huge
potential for eco-tourism |
To
diversify the attractions Bhutan has a huge potential for eco-tourism,
mountain biking, various botanical tours, river rafting, kayaking and bird
watching. The travel operators emphasised that the government must create
a conducive environment for investment into the development of infrastructure.
"There is a need for co-ordination between the department of tourism and
the travel operators to try and create more attractions, to work out some
solutions whereby we can attract the tourists all year round," said Yeshey
Norbu, the managing director of the Bhutan Tourism Corporation Limited.
"To take away the traffic of tourists from the festivals it will depend
on the willingness of the government to open areas," said Ugyen Rinzin.
"Since the tourism began, no new trekking routes were opened." Dago Bidha
said that there's virtually no tourism in the eastern part of the country.
"Building big hotels must be avoided and the community of the area must
be involved if the benefits are to be equally distributed," she added.
"The government must develop new products, and leave the marketing to us."
There are 13 trekking routes in the western part of the country but none
in the east.
Last year, the six hotels of Trashigang, Mongar and Samdrup
Jongkhar constituted only 3.27 percent of the country's total bed-nights
while Druk Hotel in Paro alone received about 26 percent. The tourism entrepreneurs
mentioned that to develop the infrastructure the government must allot
lands, give tax holidays and help the potential investors to acquire loans
from the financial institutions. Another characteristic of the Bhutanese
tourism industry was the lack of promotion and advertisement in other countries.
The Bhutanese travel agents do not have the money needed to advertise and
promote in the western media. So till now, this part of the business was
done by their counterpart agents in other countries. "Most of the Bhutanese
travel operators have none or little say over the marketing tools overseas,"
said Ugyen Rinzin. Yeshey Norbu said that the travel agents abroad do not
gain any profit by advertising but some do it just for the love of Bhutan
or for being associated with Bhutan.
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| Increase
of tour operators |
The
liberalisation of tourism policy in 1998 saw an increase of tour operators
to 80 from 33. However, the top five companies still continue to bring
about 50 percent of the tourists. The number of arrivals have not dramatically
increased though the number of travel agents more than doubled. "Instead
of expanding the pie (market), everyone is cutting from the same pie,"
asserted Yeshey Norbu. "The only way to increase the revenue is to bring
in high value - low volume tourists which has to be done by increasing
the duration of stay in Bhutan for which again the infrastructure in the
eastern part of the country must be developed."
The tariff for the tourists
who go beyond Bumthang must be reduced to facilitate longer duration of
stay. Discount in tariff alone won't be attractive. For low seasons the
royalty must be reduced while the discount on the Druk Air fare is a must.
The other deterrent is the air fare of Druk Air which is considered very
expensive. Druk Air charges about US$ 720 for a round trip from Bangkok-Paro-Bangkok
whereas a round trip from USA-Bangkok-USA costs only about US$ 400.
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Mr.
Sunil Sinha, in his draft report, also noted that Bhutan needs to pursue
a policy of developing a wide range of niche markets, each attracting a
limited number of up-market tourists. Such a strategy would address concerns
over seasonality and, most importantly, would spread tourism numbers throughout
the country. Meanwhile, the tour operators have tried to strengthen their
internal cooperation. The Association of Bhutanese Tour Operators (ABTO)
was established as a forum to air views and to unite, supervise and coordinate
the activities of the members. The Tourist Development Fund had been created
collecting US$ 10 each per visit per person.
The fund, now totaling about
Nu 6.5 million, will be used for various activities that will have general
benefits like maintenance of trekking routes. Many tourism entrepreneurs
feel that the government should plough back some percentage of the royalty
to the industry to develop the infrastructure and its support facilities.
They said that they do not have an inkling where the tourism industry stands
in the priority list of the government.
The tourism industry not only keep
the arts and crafts alive but the people employed are fully nationals.
"The benefits of the industry stretches from farmers from Lunana to hotel
owners to airlines," said one tour operator. "If we guide and support the
tourism industry carefully, it has huge potential to generate employment
for our educated youth." Is there a "middle path" for the industry, a perfect
balance of maximum dollar with zilch impact on the culture and environment
of the country? Bhutan is definitely not in a race with other countries
as far as tourist attractions are concerned. But there ought to be a "middle
path".
| Contributed
by Kinga Dema for KUENSEL, Bhutan's national newspaper, 2001 |
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