revenue generated by tourism in bhutan 2022

Travel & Tourism - Bhutan

• In Bhutan, the revenue of the Travel & Tourism market is projected to reach US$8,871.00k by 2024.
• The market is expected to grow annually at a rate of 6.82%, resulting in a projected market volume of US$12,340.00k by 2029.
• The largest market in the market is the Package Holidays market, with a projected market volume of US$4,026.00k in 2024.
• By 2029, the number of users in the Package Holidays market is expected to amount to 49.61k users.
• In 2024, user penetration is expected to be 6.8% and is projected to hit 9.7% by 2029.
• The average revenue per user (ARPU) is expected to be US$164.00.
• By 2029, 76% of total revenue in the Travel & Tourism market will be generated through online sales.
• The United States will generate the most revenue in global comparison, with US$214bn in 2024.
• Bhutan's sustainable tourism policy, emphasizing on high-value, low-impact tourism, has attracted a niche market of mindful travelers.

Key regions: Malaysia , Europe , Singapore , Vietnam , United States

Definition:

The Travel & Tourism market encompasses a diverse range of accommodation services catering to the needs and preferences of travelers. This dynamic market includes package holidays, hotel accommodations, private vacation rentals, camping experiences, and cruises.

The market consists of five further markets.

• The Cruises market covers multi-day vacation trips on a cruise ship. The Cruises market encompasses exclusively passenger ticket revenues.
• The Vacation Rentals market comprises of private accommodation bookings which includes private holiday homes and houses as well as short-term rental of private rooms or flats.
• The Hotels market includes stays in hotels and professionally run guest houses.
• The Package Holidays market comprises of travel deals that normally contain travel and accommodation sold for one price, although optional further provisions can be included such as catering and tourist services.
• The Camping market includes bookings at camping sites for pitches using tents, campervans, or trailers. These can be associated with big chains or privately managed campsites.

Additional Information:

The main performance indicators of the Travel & Tourism market are revenues, average revenue per user (ARPU), users and user penetration rates. Additionally, online and offline sales channel shares display the distribution of online and offline bookings. The ARPU refers to the average revenue one user generates per year while the revenue represents the total booking volume. Revenues are generated through both online and offline sales channels and include exclusively B2C revenues and users for the above-mentioned markets. Users represent the aggregated number of guests. Each user is only counted once per year. Additional definitions for each market can be found within the respective market pages.

The booking volume includes all booked travels made by users from the selected region, independent of the departure and arrival. The scope includes domestic and outbound travel.

Prominent players in this sector include online travel agencies (OTAs) like Expedia and Opodo, as well as tour operators such as TUI. Specialized platforms like Hotels.com, Booking.com, and Airbnb facilitate the online booking of hotels and private accommodations, contributing significantly to the market's vibrancy.

For further information on the data displayed, refer to the info button right next to each box.

• Bookings directly via the website of the service provider, travel agencies, online travel agencies (OTAs) or telephone

out-of-scope

• Business trips
• Other forms of trips (e.g. excursions, etc.)

Travel & Tourism

• Vacation Rentals
• Package Holidays
• Analyst Opinion

Over the past few years, Bhutan has seen a steady growth in its Travel & Tourism market, with an increasing number of tourists visiting the country each year. Customer preferences: Tourists visiting Bhutan are increasingly looking for unique and authentic travel experiences, seeking to immerse themselves in the local culture and traditions. They are drawn to Bhutan's pristine natural landscapes, rich cultural heritage, and sustainable tourism practices. Additionally, there is a growing demand for adventure tourism activities such as trekking, hiking, and exploring Bhutan's remote regions. Trends in the market: One of the key trends in the Bhutanese Travel & Tourism market is the government's focus on high-value, low-impact tourism. This approach ensures that tourism development in Bhutan is sustainable and preserves the country's environment and culture. Furthermore, there is a rise in luxury tourism in Bhutan, with high-end accommodations and exclusive experiences catering to affluent travelers. The country is also witnessing an increase in niche tourism segments such as wellness tourism and spiritual retreats. Local special circumstances: Bhutan's unique policy of measuring Gross National Happiness (GNH) as a marker of progress sets it apart from other countries. This emphasis on holistic well-being and sustainable development aligns with the preferences of conscious travelers seeking meaningful experiences. The government's strict regulations on tourism, including the daily tariff for tourists and requirement of booking through authorized tour operators, help in controlling the number of visitors and maintaining the exclusivity of travel experiences in Bhutan. Underlying macroeconomic factors: The stable political environment in Bhutan, along with government initiatives to promote tourism as a key economic sector, has contributed to the growth of the Travel & Tourism market. Additionally, Bhutan's strategic location between India and China, two major emerging markets with growing outbound tourism, has increased the country's visibility as a unique travel destination. The improvement in infrastructure, such as the expansion of airports and roads, has also made it easier for tourists to access different parts of the country, further boosting the tourism sector.

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Data coverage:

Modeling approach:

Additional notes:

• Sales Channels
• Travel Behavior
• Global Comparison
• Key Market Indicators

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International tourism, receipts (current US$) - Bhutan

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World Tourism Day Celebrated

Bhutanese community in australia gears up for historic royal visit, dart – a new tool to streamline and strengthen biodiversity reporting, drukair expands horizons, trending now, revenue for bhutan expected to increase during fy 2022-2023.

• June 9, 2023
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Significant contributions anticipated from Mangdechhu Hydroelectric Project (MHP), dividends from the Druk Holding and Investments (DHI) and royalties from the tourism sector

In what is a positive development for Bhutan’s economy, the total revenue that can be generated for the fiscal year 2022-23 has been revised to Nu. 40,829 million ngultrums (mn), marking a significant increase of 12 percent from the initially budgeted amount of Nu. 36,368mn.

This upward revision is expected to have a favorable impact on the country’s financial health, according to the third quarter macroeconomic situation report released by ministry of finance (MoF).

Further as per the Constitutional mandate, recurrent budget has to be met from domestic revenue, which is estimated to be about Nu 43.24 billon (bn), apart from another Nu 9.82 bn as grants. The report also states that the revenue growth is driven by marginal increases in both direct and indirect taxes.

Notably, significant contributions are anticipated from profit transfers from the Mangdechhu Hydroelectric Project (MHP), dividends from the Druk Holding and Investments (DHI) and royalties from the tourism sector. These positive trends indicate a promising economic outlook for Bhutan, the report says.

Meanwhile, domestic revenue refers to the generation of government revenue from domestic resources, from tax or non-tax sources. As per the MoF, domestic revenue covers 19 % of Gross Domestic Product (GDP) and 122.52 % of recurrent expenditure of the government.

During the previous fiscal year, (FY) 2021-22, the country witnessed a total domestic revenue realization of Nu. 39,043.07 mn, reflecting an encouraging increase of 9.7 percent from the budgeted amount of Nu. 35,600 mn.

“The noteworthy revenue growth was primarily attributed to a surge in Corporate Income Tax (Nu. 2,822.07 million), Sales Tax (Nu. 1,498.07 million), and dividend receipts (Nu. 1,042.21 million),” the report states. However, taxes related to international trade and transactions, such as customs and other import duties, saw a decline.

The revenue generated in FY 2021-22 was sufficient to cover 56.46% of the total expenditure, marking an improvement from the previous fiscal year where it covered only 50.46 %. This increased coverage was primarily a result of a decrease in the percentage change of total expenditure and an increase in the percentage change of revenue. While revenue increased by 8.89 % from the previous year, total expenditure decreased by 2.72 %. The ratio of domestic revenue to current expenditure for FY 2021-22 stood at 113.4, demonstrating a positive trend compared to the previous fiscal year’s ratio of 112.4.

Additionally, the report states that at the end of the first quarter of the financial year 2022-23, the total amount of resources obtained was 22.12 % higher than what was initially estimated. This means that more resources than expected was generated.

Out of these resources, 65.02% came from domestic revenue. External grants, which are funds received from other countries or organizations, contributed 48.75% to the total resources.

Additionally, other receipts, such as fees or fines, accounted for 45.97% of the total resources obtained.

Furthermore, external borrowings made up 3.17 % of the total resources realized.  Recoveries, which represent the amount of money that was paid back, accounted for 0.98 % of the total resources obtained.

The report says that these financial indicators highlight the positive trajectory of Bhutan’s economy, with increased revenue surpassing initial budget expectations. The country’s reliance on diverse revenue streams and careful expenditure management have contributed to its economic stability and growth prospects for the coming fiscal year.

Tshering Pelden from Thimphu

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Bhutan Tourism Revenues

Tourism revenues in bhutan increased to 0.02 usd million in december from 0 usd million in november of 2021. tourism revenues in bhutan averaged 4.62 usd million from 2009 until 2021, reaching an all time high of 17.30 usd million in november of 2018 and a record low of 0.00 usd million in april of 2020. source: royal monetary authority of bhutan,   markets,   gdp,   labour,   prices,   money,   trade,   government,   business,   consumer,   taxes,   climate.

BHUTAN TODAY The New Perspective

• 𝐊𝐞𝐳𝐚𝐧𝐠 𝐓𝐬𝐡𝐞𝐫𝐢𝐧𝐠 𝐑𝐞𝐛𝐮𝐢𝐥𝐝𝐬 𝐋𝐢𝐟𝐞 𝐚𝐧𝐝 𝐑𝐞𝐥𝐚𝐭𝐢𝐨𝐧𝐬𝐡𝐢𝐩𝐬 𝐀𝐟𝐭𝐞𝐫 𝐎𝐯𝐞𝐫𝐜𝐨𝐦𝐢𝐧𝐠 𝐀𝐝𝐝𝐢𝐜𝐭𝐢𝐨𝐧
• 𝐃𝐫𝐞𝐩𝐨𝐧𝐠 𝐓𝐬𝐡𝐞𝐜𝐡𝐮 𝐅𝐚𝐜𝐞𝐬 𝐔𝐧𝐜𝐞𝐫𝐭𝐚𝐢𝐧 𝐅𝐮𝐭𝐮𝐫𝐞 𝐚𝐬 𝐘𝐨𝐮𝐭𝐡 𝐀𝐛𝐚𝐧𝐝𝐨𝐧 𝐒𝐚𝐜𝐫𝐞𝐝 𝐌𝐚𝐬𝐤 𝐃𝐚𝐧𝐜𝐞 𝐓𝐫𝐚𝐝𝐢𝐭𝐢𝐨𝐧
• 𝐀𝐧 𝐄𝐱𝐜𝐥𝐮𝐬𝐢𝐯𝐞 𝐰𝐢𝐭𝐡 𝐓𝐚𝐧𝐝𝐢𝐧 𝐁𝐢𝐝𝐡𝐚
• 𝐒𝐚𝐤𝐭𝐞𝐧𝐠 𝐂𝐨𝐦𝐦𝐮𝐧𝐢𝐭𝐲 𝐕𝐨𝐥𝐮𝐧𝐭𝐞𝐞𝐫𝐬 𝐔𝐧𝐢𝐭𝐞 𝐭𝐨 𝐂𝐥𝐞𝐚𝐧 𝐓𝐬𝐡𝐨𝐦𝐞𝐧 𝐆𝐲𝐞𝐦 𝐓𝐬𝐡𝐨 𝐟𝐨𝐫 𝐏𝐫𝐞𝐬𝐞𝐫𝐯𝐚𝐭𝐢𝐨𝐧 𝐚𝐧𝐝 𝐖𝐞𝐥𝐥-𝐛𝐞𝐢𝐧𝐠
• 𝐄𝐃𝐈𝐓𝐎𝐑𝐈𝐀𝐋- 𝐁𝐚𝐥𝐚𝐧𝐜𝐢𝐧𝐠 𝐁𝐡𝐮𝐭𝐚𝐧’𝐬 𝐄𝐜𝐨𝐧𝐨𝐦𝐢𝐜 𝐒𝐭𝐢𝐦𝐮𝐥𝐮𝐬 𝐏𝐫𝐨𝐠𝐫𝐚𝐦 𝐀𝐦𝐢𝐝 𝐇𝐮𝐫𝐝𝐥𝐞𝐬 𝐈𝐧 𝐀𝐜𝐜𝐞𝐬𝐬𝐢𝐛𝐢𝐥𝐢𝐭𝐲 𝐀𝐧𝐝 𝐀𝐜𝐜𝐨𝐮𝐧𝐭𝐚𝐛𝐢𝐥𝐢𝐭𝐲

Exceeds expectations with over 16,000 visitors since reopening, despite SDF increase

…𝑺𝒊𝒏𝒄𝒆 𝒕𝒉𝒆 𝒐𝒑𝒆𝒏𝒊𝒏𝒈 𝒐𝒇 𝒕𝒐𝒖𝒓𝒊𝒔𝒎 𝒊𝒏 𝑺𝒆𝒑𝒕𝒆𝒎𝒃𝒆𝒓 2022, 𝒕𝒉𝒆 𝒊𝒏𝒅𝒖𝒔𝒕𝒓𝒚 𝒉𝒂𝒔 𝒈𝒆𝒏𝒆𝒓𝒂𝒕𝒆𝒅 𝒂 𝒓𝒆𝒗𝒆𝒏𝒖𝒆 𝒐𝒇 𝒂𝒑𝒑𝒓𝒐𝒙𝒊𝒎𝒂𝒕𝒆𝒍𝒚 𝑼𝑺𝑫 7.06𝑴 𝒂𝒏𝒅 𝑵𝒖 46.68𝑴 (𝒂𝒓𝒐𝒖𝒏𝒅 𝑼𝑺𝑫 570,000) 𝒇𝒓𝒐𝒎 𝒕𝒉𝒆 𝑺𝑫𝑭

Tenzin Lhaden

Despite the drop in visitor numbers, 16,520 people have visited the country since it reopened in September 2022, which is better than what the tourism sector forecasted.

According to records from the Department of Immigration, of the total arrivals, 8,273 were Indian tourists who paid the Sustainable Development Fee (SDF) of Nu 1200 so far this year.

Similarly, around 3,431 tourists visited the country paying USD 200, and about 4,816 tourists visited paying the old SDF of USD 65 per night.

“The Tourism Levy Bill was founded on the principle of high value, low volume tourism and specifically relates to the revision of the SDF but is also part of the overall government transformation,” said Carissa, Chief Marketing Officer, Department of Tourism (DoT).

Despite the new SDF levy of USD 200 per person per night for visitors from all other countries except India, who must pay Ngultrum 1200 per person per day, visitors have continued to visit Bhutan, though the numbers are lower than before the pandemic.

Meanwhile, some of the tour operators said that if a tourist comes alone or in a pair, it is very difficult for them to manage resources for them. However, if tourists come in a group, they make minimal profit from it.

A few foreigners have said that the revised SDF has not stopped their dream of visiting Bhutan. “I actually feel okay with it. I think I am blessed because I can afford it,” said Paulson, a tourist from the US.

Similarly, a tourist from Canada said that he did not mind paying USD 200 per night since that would only add to the quality of tourism services offered and would eliminate the crowds.

“I don’t know whether USD 200 is right or wrong, but I agree that the principle of paying it has to be there because without it, people coming in and out would not benefit the government. Moreover, it destroys the local infrastructure, and somebody has to take care of the local environment too,” he asserted.

The proprietor of a tour agency in Paro said that the decision made by the government to increase the SDF was good because it supports the tourism policy of the country. Moreover, it is a source of income for the state, where the government can invest in the infrastructural development of the country and the well-being of the people.

Since the opening of tourism in late September 2022, the industry has generated revenue of approximately USD 7.06M and Nu 46.68M (around USD 570,000) from the SDF. In 2019, the total earnings were USD 23.42M from SDF.

At this rate, Carissa said the SDF earnings after year one would be slightly lower or equal to the SDF earnings in 2019. Article 14 of the sector’s constitution mandates that all taxes, fees, and levies, which include the SDF, be deposited into a Consolidated Account. By law, funds from this general account must cover government recurrent expenditure to ensure the stability and reliability of government operations. Residual revenue from this account is allocated to specific developmental activities, including building schools, providing free healthcare, skilling youth, maintaining forests and wildlife, providing fresh drinking water sources, renovating historical dzongs, and other initiatives.

In short, funds from this consolidated general account, including SDF contributions, are recurrent expenditures, which include salaries and interest payments on loans, to maintain stable and operational government services for the Bhutanese people and development projects selected by the government and outlined in Bhutan’s Twelfth Five Year Plan: 2018-2023 issued by The Royal Government of Bhutan’s Gross National Happiness Commission.

Carissa said that the implementation of the Tourism Levy Bill 2022 was a shock to the industry. “In the short term, the SDF will have an impact on the arrivals; however, the numbers will certainly bounce back,” she added.

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Tourism in Bhutan

Development of the tourism sector in bhutan from 1995 to 2020.

Revenues from tourism

All data for Bhutan in detail

Tourism Development: Looking beyond SDF

The last few weeks have been very unsettling for those engaged in the tourism business, caused in large part by the rumors that were doing the rounds that the government is contemplating policy changes at a structural level. Upon tabling the Tourism Levy Bill of Bhutan 2022 in the Parliament, on June 20, to the dismay of many, the rumors were proven to be true.

While much has already been written and spoken in various media channels surrounding the proposed changes, me and my colleagues at the Bhutan Sustainable Tourism Society (BSTS), a society consisting of voluntary members would also like to contribute to the discourse. It is hoped that doing so would contribute to a well-rounded and properly thought out transformation initiative that has been undertaken by the government in this most vitally important industry.

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?

At most, this is idealistic – in fact even improbable. And, by the way, this is not a new idea. Some years back the Tourism Council of Bhutan (TCB) deducted from the tour operators’ earnings a levy called the Tourism Development Fund (TDF). For the creation of this Fund, the TCB deducted US$10.00 per tourist per visit, including 20% of the FIT Surcharge. Over the years the amount of TDF collected was very, very substantial. Sadly, this Fund was never ploughed back into the industry. To this day we are clueless as to what happened to the Fund.

As a developing country, we have many other priority sectors such as agriculture, health, education etc., for which the government needs funds. As the past has proven, we do not believe that the government will deliver on their promise that they would plough back the SDF money into tourism – it is unlikely to happen.

To be fair it is not only the government of Bhutan that is in default – it happens in the most developed economies as well. To quote an example, when I was working with the US National Parks they had this constant battle with their government – over millions of dollars generated by the Parks that never got ploughed back into the upkeep of the Parks. In a similar vein, it is unbelievable that the Royal Government of Bhutan would invest the SDF fund into tourism – they have no past record of having done so. Thus offering the justification that they are increasing the SDF to such a high level so that they can plough it back into the industry will find no acceptance among the industry and the people of Bhutan.

The government further claims that the existing Minimum Daily Package Rate (MDPR) has outlived its usefulness and that it is now redundant – conveniently forgetting that the MDPR has been in place from the day the tourism policy of ‘High Value Low Volume’ was conceived and set into motion. There is no other country in the world that has done this. Basically it is a tool to support our private sector to improve our services and products. When we all know that we have not achieved these improvements to add high value to our products and services, how could we be so adamant to discard this tool, at this stage in our growth? No system is perfect and likewise the pricing system does have its flaws but the fact is that the pros far outweigh the cons. We need to work on addressing the loopholes in the system but not at the cost of dismantling it. We will all become losers as a consequence of this drastic and unimaginative move that is contemplated by the government. This tool makes us the masters of our own tourism growth. Do we want to now hand over the reins to the tourist – empowering them to dictate the price for our services? The MDPR is not written in stone and should be removed only when our products and services have achieved a certain level of quality. I am afraid that the time is not now.

Our visionary and benevolent monarchs have steered the country through thick and thin – the development and progress that we have seen is unprecedented. Their Majesties, the pride and treasure of our country, continue to strive tirelessly for the welfare of the Bhutanese people. Unfortunately, it is becoming a habit for every new government to test and experiment their ill-thought-out ideas and ill-conceived plans. For the size of our economy and population, we cannot afford to make mistakes, especially in areas where the consequences will be extremely damaging. Tourism is a dynamic industry and change is inevitable but we should not change for the sake of changing, and for the better.

How far are the proposed changes likely to address our current woes? Will they? Issues such as offsetting seasonality, taking tourism to the east and the south, promoting longer durations for trekking and bird watching, promoting our niche in ecotourism, and generating more revenue for our hotels and other service providers – these are at the core of our endeavors.

No one can contest that the government’s proposed policy changes are happening too fast, too early. Clearly, there is no depth and proper understanding of the dynamics of tourism – it is evident from the timing of the proposed change. We urge and plead with the Royal Government of Bhutan to please take the time to rethink and give due consideration to the concerns of the people.

Contributed by  

Karma Tshering (PhD)

Sustainable Tourism Specialist  

Founder – Bhutan Sustainable Tourism Society

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40,665 tourists have visited Bhutan from September 23, 2022 to April 15, 2023

staff 04/18/2023 LOCAL NEWS 2 Comments 17,847 Views

A total of 40,665 tourists have arrived in Bhutan from 23rd September 2022 until 15th April 2023. Out of this figure, 23,944 are Indian guests who have paid Nu. 1,200 per person, per night, while 16,721 are other international guests paying USD 200 per person, per night. Out of the 16,721, 8,945 guests have paid the old SDF rate of USD 65, while 7,776 have paid the new SDF rate of USD 200. The Department of Immigration has confirmed that this arrival data does not include those visitors who have come as official guests, or for meetings, conferences and exhibitions, or those invited by government agencies.

A total of 7,385 tourists arrived in the month of March 2023 which is slightly less than the number of arrivals in October,2022 the strongest month so far with 8,313 arrivals. From April 1 – 15,  7,072 guests have arrived in Bhutan.

Moreover, in the months of January, February and March 2023, more international guests came paying the new SDF rate as compared to the old rate. In January, 253 guests paid the old SDF, and 468 paid the new SDF; in February, 185 paid the old SDF while 574 paid the new SDF; and in March, 1,059 paid the old SDF and 1,689 paid the new SDF. 

From September 23, 2022 till April 15, 2023, Bhutan’s top ten source markets were India (23,944), America (4,216), Malaysia (1,843), the UK (1,288), Vietnam (922), Singapore (856), Germany (793), Australia (524), Canada (522), and France (503). 

“The numbers are looking encouraging and gradually picking up. Beginning this year, we have seen more tourists come in paying the new SDF rate as compared to the old rate. The Department of Tourism will continue our efforts to facilitate more positive global coverage on Bhutan and generate more tourist arrivals,” said Dorji Dhradhul, the Director General of the Department of Tourism.

“We also continue to work closely with tourism partners to create new, unique and creative products and itineraries and improve the guest experience. In particular, we know that an area of concern is the washroom amenities. Currently, there are several models of management in operation for the washrooms around the country. Four washrooms are managed by DoT directly, and we have also recently outsourced two restrooms on the Phajoding trail to a private organisation, but the majority are managed by the dzongkhags themselves. We know that many of these washrooms are not well maintained due to various reasons, and do not live up to the high expectations of the guests visiting our country. We are committed to working in partnership with the dzongkhags to find urgent solutions as we know that the current standards are not good enough,” he concluded.

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The tourists coming in paying the new US$200 per day will decrease as time passes and those who qualified for the US$65 rate run out: and the tourist industry, and therefore the Bhutan economy, will suffer.Maybe in the now is alright … but in the future … The US$200 per day rate is not sustainable.

I strongly urge that SDF concessions be made for large groups staying for extended time. I have brought 20+ high school students from Hawaii USA three times (2016, 2017, 2019) for three weeks of community service visits to include tree planting, trail maintenance, stupa whitewashing, trash pick-up, and making donations of goods and money at monasteries and an orphanage. With the new elevated SDF I will bring fewer students in 2023 and the program is in jeopardy in the coming years.

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It just got (much) cheaper to visit Bhutan – start planning that dream trip

Aug 31, 2023 • 10 min read

Bhutan is a destination only lightly touched by tourism © Mark Paulda/Getty Images

Since tentatively opening up to tourism in 1974, the Himalayan kingdom of Bhutan has earned a reputation as one of the most pristine – and expensive – places to visit on the planet.

Tight controls on tourism and high daily tourist fees have helped to preserve a traditional Buddhist culture that is rapidly vanishing from other parts of the Himalayas. And in 2022, those fees climbed even higher, as Bhutan opened its borders to travelers following the pandemic.

Now, almost a year after this sudden price hike, the Bhutanese government has announced another shake-up to the daily tourist fees – but this time, fees are coming down significantly. For travelers deterred from visiting Bhutan’s ancient fortress monasteries and immaculate mountain valleys by the high price tag, this is welcome news, but what exactly are the new rules, and how do they affect travelers?

If Bhutan has long been on your bucket list and you’re ready to go, here’s what you need to know about the new fees, including what you will be charged for and where the money ends up.

What was the old system for visiting Bhutan?

Until 2022, tourists to Bhutan were charged a daily tourist fee of $250 ($200 in the low season) for every day spent in the country. This might sound expensive, but the fee covered food, accommodation, transport, guide fees and most of the other essentials tourists needed for a once-in-a-lifetime trip. Also included in the daily charge was a $65 Sustainable Development Fee, funding far-reaching social programs in a nation famed for measuring progress in terms of Gross National Happiness rather than Gross National Product.

In September 2022, Bhutan reopened to un-quarantined tourists for the first time since the start of the pandemic – but the Sustainable Development Fee increased to $200 per day, with additional charges for accommodation, food, transport, entry to sights and guides. Lower fees applied for tourists from neighboring India , but for most other visitors, the cost of travel to Bhutan doubled from an already high baseline.

For some, Bhutan was no longer a once-in-a-lifetime destination tantalizingly within reach, but an unattainable dream, particularly with the soaring cost of flights and the post-COVID-19 cost-of-living crisis. For a while, it seemed that Bhutan’s unique experiences would be reserved for the high-flying elite; Himalaya fans with smaller budgets folded away their maps of alpine valleys and prayer-flag-draped monasteries and looked elsewhere for their dose of mountain magic.

In fact, the blow was soon softened by a series of discounts offered to travelers staying more than four nights in Bhutan, with additional days exempt from the daily fee once visitors reached a certain threshold. But as of September 2023, cheaper – if not exactly cheap – travel to Bhutan is back in the cards. Here are the changes, and what they mean for travelers dreaming of Bhutan's pure mountain air and timeless Buddhist architecture.

Getting the best out of your trip to Bhutan

What is the new system starting in September 2023?

After increasing by 200% in 2022, the daily Sustainable Development Fee will be cut in half from September 1, 2023 to a more affordable US$100 per day. Children ages six to 12 will pay $50 per day, and there’s no fee for children age five or under. This is a significant price drop – but travelers will still have to budget for meals, transport, guide fees, entry charges at dzongs (fortress-monasteries) and museums, and hotels – which can cost anything from $40 per night for a budget hotel in the capital, Thimphu , to nearly $2000 per night for the lavish, palace-like Amankora Paro Lodge in Paro .

Then there are flights, with the trip from New York to Paro coming in at around $2000, transferring in either India or Nepal to a Bhutan-bound flight with Bhutan Airlines or Druk Air – the only airlines licensed to fly into the international airport at Paro. You should budget a minimum of $300 per day for a trip to Bhutan, and considerably more to stay in superior classes of hotel, in addition to the cost of your flights.

However, this high price tag gets you access to a destination only lightly touched by tourism. Only around 40,000 tourists visited Bhutan in the first six months after the country reopened following the pandemic, with more than half of these visitors coming from India. For comparison, Nepal received nearly 500,000 visitors over the same period, and India saw more than four million arrivals.

With the low visitor numbers, sights in Bhutan – such as the majestic dzongs in Paro, Thimphu and Punakha and the gravity-defying monastery at Taktshang – only become truly crowded when locals are gathering for one of the country’s colorful Buddhist festivals. While the influence of the modern world is creeping into Bhutan, particularly in Thimphu, your prevailing memories will be of peace, silence and clear mountain air scented by the aromatic resin of blue pines. For travelers seeking Shangri-La in real life, the experience is priceless.

Are there any changes for travelers from India, Bangladesh and Maldives?

Visitors from India, Bangladesh and Maldives are subject to different rules. Travelers from India, who make up 73% of all visitors to Bhutan, can visit with a special permit – available through the Bhutanese government’s visa portal – paying a low daily fee of ₹1200 (about $15). Bangladeshi and Maldivian citizens must apply for a visa, on top of the same special daily fee. No changes have been announced to this system.

In Bhutan, a historic Himalayan route opens to hikers for the first time in 60 years

What if I want to go trekking?

With its lofty Himalayan valleys and remote monasteries, Bhutan is a spectacular trekking destination, but the daily Sustainable Development Fee still applies. The most practical way to trek is to make arrangements through a Bhutanese tour operator, who will provide guides, support staff, pack animals, tent accommodation and meals for the duration of your trek.

With a support team to transport your bags and put up your tent and a hot breakfast waiting for you when you wake up every morning, the experience is more like glamping than wild camping, and the trails are delightfully uncrowded – particularly if you attempt more ambitious routes such as the 28-day Trans-Bhutan Trail . You’ll also get to meet local people following a traditional way of life, far from the tourist bustle.

What about my visa?

Applying for a visa for Bhutan is a little different from applying for a visa for most other countries. Visas are not issued by embassies overseas but are stamped into your passport on arrival, on production of a pre-approval letter confirming you have paid the daily tourist fees and the $40 visa-processing fee. The easiest way to obtain this letter is to make arrangements through an approved Bhutanese tour operator; you can also apply online via the government's visa portal (you’ll also need mandatory travel insurance for the duration of your trip).

Be aware that you will have to pay the Sustainable Development Fee for every day of your stay at the same time as you apply for your visa. Many travelers feel more comfortable applying through a tour agency, rather than making a payment of hundreds or even thousands of dollars via an online form. Using an agency will also allow you to talk through your itinerary with an experienced local expert. It’s the best way to ensure that you get maximum value from the daily fee (for instance, you don't want to squander $100 days backtracking to places you have already visited).

Why has this decision been made now?

When the daily fee was increased in 2022, the government announced that funds raised would be used to offset the carbon footprint of tourism, reduce fossil-fuel dependency, improve carbon-neutral infrastructure and up-skill workers in Bhutan’s tourism sector, supporting Bhutan’s recovery from the pandemic.

However, in the first few months following the reopening, international visitor numbers fell markedly compared to before COVID-19, attributed to the new fee structure, worldwide inflation and economic uncertainty linked to the war in Ukraine. Nearly 60,000 people visited Bhutan from January to August 2023, compared to 315,600 travelers for the whole of 2019. The economic foundation of Bhutan’s “high value, low volume” tourism model no longer seemed quite so secure.

According to a government statement, the new fee reduction announced in 2023 reflects the “important role of the tourism sector in generating employment; earning foreign exchange; realizing the potential for spillover benefits for ancillary industries; and in boosting overall economic growth.”

Commenting on the change, Dorji Dhradhul, director general of the Department of Tourism Bhutan, said: “Amid the global recovery from the COVID-19 pandemic, ongoing European conflicts, and economic challenges affecting key markets, we’ve attentively considered feedback from our guests, industry peers and global travel partners."

"Consequently, we’ve decided to temporarily reduce our Sustainable Development Fee (SDF) to rejuvenate our tourism industry. This will not only make our nation more accessible to potential visitors but will also ensure sustained funding for the numerous projects supported by the SDF."

It’s a valid stance for the government to take. In 2019, the Sustainable Development Fee contributed nearly $89 million to the Bhutanese economy. During the eight months from January to August 2023, the Sustainable Development Fee delivered a more modest $13.5 million into the national coffers.

Another issue was the lack of warning provided by the authorities when Bhutan reopened to tourism after the pandemic. The government announced the doubling of the daily fee just weeks before the borders opened in September 2022 – for a destination where tourists typically spend up to six months planning a trip.

The current reduction in the daily fee has also been announced on short notice, but the lower rate will apply until August 31, 2027, giving tourists some certainty when planning ahead for a trip to Bhutan.

Escaping Thimphu: where to go to find Bhutan’s hidden treasures

Where will my money go?

Bhutan’s unique tourism model has delivered significant benefits for the people of this remote Himalayan kingdom. On top of free healthcare and education, the Sustainable Development Fee has funded everything from conservation to carbon-neutral infrastructure and organic farming. These projects have contributed to Bhutan becoming the first carbon-negative country on earth – actually absorbing more carbon dioxide than it produces.

What does sustainable development look like on the ground? With tourism reducing the pressure on agriculture to sustain the economy, Bhutan has managed to keep 71% of its territory under forest cover, compared to just 25% in Nepal and 11% in Bangladesh . Some 95% of Bhutan’s electricity is produced using hydropower, and almost 100% of the population has access to electricity and clean water.

In exchange for opening their mountain home to high-value, low-impact tourism, the Bhutanese have achieved a high standard of living compared to their neighbors. Bhutan spends nearly 40% more than Nepal on education, with half the unemployment rate and half as many people living under the poverty line. And the adult literacy rate is growing at 10% per year – not bad for a country where 61% of people live in remote mountain villages.

Bhutan is also famous for its Gross National Happiness – an innovative model for assessing the successes and achievements of Bhutan’s part-monarchy, part-clergy and part-elected government. Using such measures as job satisfaction, sense of community, psychological well-being and religious karma, Bhutan is rated as the happiest country in the world.

Know your gompas: a Lonely Planet guide to Tibetan Buddhist monasteries

So is Bhutan still worth visiting?

Of course! While visiting Bhutan will always be an expensive option, the lower daily fee makes travel here more affordable – just not quite as affordable as it was before the pandemic. In truth, Bhutan was always a plan-ahead-and-save-up kind of destination, and with the lower Sustainable Development Fee fixed until 2027, travelers have a clear target to aim for over the next four years.

Looking at things objectively, tourist fees are increasingly the future of travel. Barcelona has had a tourist tax since 2012, Thailand imposed a $9 tourist tax in 2022, Manchester introduced a daily tourist charge in 2023, and Venice and Valencia are poised to levy new tourist charges during the 2023–24 season. The primary difference in Bhutan is that you need slightly deeper pockets.

If the lower daily fee succeeds in luring more people to Bhutan, visitor numbers will still be small by international standards, and the government will have more funds for worthy social and environmental initiatives such as new hydropower projects and the electrification of public transport. In the future, that famously clean mountain air may become even cleaner and more keenly fragranced by the scent of glacial meltwater and blue pines.

This article was first published Aug 12, 2022 and updated Aug 31, 2023.

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