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Budget hoteliers beg for help

Hotel and Restaurant Association of Bhutan (HRAB) is still waiting to get a response from Prime Minister Dasho Tshering Tobgay or the Prime Minister’s Office over the recent proposal made by the Tourism Council of Bhutan (TCB) on Sustainable Development Fee (SDF) for regional tourists and e-permit system rolled out for them.

HRAB, on behalf of the budget hotel owners that expressed deep concern over the proposal made by TCB on SDF and e-permit system for regional tourists, had submitted their petition to Lyonchhen a month ago.

According to an official from HRAB, though HRAB supports the introduction of the SDF and the enabling of e-permit, which is a pass for regional tourists that can be applied online, however they request that permit on arrival and advance e-permit be operated on parallel basis initially.

The hoteliers say that arrival permit can be removed once the e-permit system is 100% reliable and make e-permit the only way to enter the country for regional tourists.

HRAB fears that Nu 500 per person per day will result in addition to entry fees at monuments, which is only charged to regional tourist, and compulsory requirement of a car and guides will make it very expensive for regional tourist, which will result in a large drop in the number of regional tourists and this will hurt the hotel industry and especially the budget hoteliers in a significant way.

“We have requested Lyonchhen that SDF should be introduced but with a fee of Nu 500 per person per trip initially and depending on the impact of the regional tourist be adjusted up or down as required,” said the HRAB official.

Instead of having a static fee which is not responsive to the changing market environment, HRAB suggested that the SDF should be used as a flexible tool to regulate the flow of the tourists into the country – lower in the lean season and higher in the peak season to reduce or increase the number as the need may be.

They have also requested budget hotels, (non-star hotels) which meet B+ or two stars hotel rating, must also been given access to the e-permit system to ensure that their business are not affected negatively.

According to TCB’s proposed regulation which is yet to be approved by the cabinet, regional tourists will be allowed to stay in only those hotels which are certified by the TCB.

“All the certified hotels are three stars and above, so it will be huge loss for budget hotels,” said a representative of budget hotels, Cigay Dorji.

Meanwhile, HRAB was informed by the ministry of economic affairs that the budget hotels (non-star hotels) will be granted two years to upgrade their hotel to meet the B+ requirements, but the recently the TCB decided to implement the new regulation from January 1next year, which leaves a little over a month for budget hotels to be ready and to be certified to meet the B+ requirement.

“We feel it is too little time to upgrade the hotels and it is impossible to inspect and certify the 100 plus budget hotels in the country,” said HRAB’s official.

Though HRAB supports in the desire to regulate the fast growing regional tourism and its objective to regulate and moderate the rapid increase in the numbers over the last few years, they fear that the multiple actions taken by different agencies in the government with multiple initiatives may led to a large drop in the number of regional tourists and would have severe negative impacts to the economy of the country and specifically to the hotel industry.

For the last 10 months from January to October 2017, the regional tourist arrivals have reached 152,896.

Ugyen Wangmo, the owner of Hotel Season in Paro, said she has started losing her customers after her regular guests have already started enquiring about the new regulation. Two groups of regional tourist who are supposed to come next month cancelled their booking.

According to the HRAB official, they have also mentioned in the petition about the E-permit system to be introduced to all entry points – Gelephu and Samdrup Jongkhar simultaneously and not only in Phuentsholing and Paro.

“If this is not done then the hotels in the south and eastern Bhutan will be for all practical purpose condemned to failure and will be forced to shut down due to this regulatory changes,” said the official.

The official further stated that next year marks 50 years of formal diplomatic relationship between Bhutan and India.

“While for every other nation we have reduced or relaxed the requirement during our friendship offers, we would like to point out that increasing our regulation for the Indians could be seen as not in alignment with the spirit of 50 years of diplomatic celebration,” the official added.

HRAB also asserted that the introduction of the requirement of a hotel booking voucher in April this year has already impacted the walk-in business of the budget hotels. The budget hoteliers’ business is down significantly. The hoteliers fear that with the implementation of Nu 500 per person per day SDF along with the mandatory requirement of passport, car and trained Bhutanese guides with license is expected to further significantly drop the number of regional tourists.

The representative of budget hotels, Cigay Dorji, who also own Hotel New Grand in Thimphu said that only 20 to 30% Indians would have passport since most of them use voter identity cards to travel. “It will hamper our business and sooner or later we might have to shut down our hotels,” he said.

The HRAB official is also concerned that the new regulation will have a negative effect on their business severely, along with those of restaurants and taxi operators who rely largely on regional tourists for their sustenance.

The TCB’s proposal of new regulation was submitted to the cabinet for approval. Prime Minister Dasho Thering Tobgay said the cabinet is studying the proposal.

Pema Seldon from Thimphu