Bhutan has an enviable reputation as the premium version of the Himalayas. Magnificent mountains, deeply traditional Buddhist culture, air so clean you can smell the glacial meltwater – all this can be had for the price of the daily fee that forms the core of the Bhutanese model for high-value, low-impact tourism.
And until recently, it was a price discerning tourists were happy to pay. For a daily charge of US$200 to US$250 per person pre-pandemic, visitors had access to one of the most unspoiled corners of the Himalayas – an immaculate Buddhist kingdom hailed as the closest thing on earth to Shangri-La.
Bhutan is radically revamping its tourism model – instead of paying a daily fee of US$200-250 for an all-inclusive package, tourists will now be charged a daily Sustainable Development Fee of US$200, with extra costs for food, accommodation, transport and everything else that used to be part of the package. Visitors will no longer have to join an organized tour, but travel to Bhutan just got a lot more expensive.
How did the old daily fee structure for Bhutan work?
In the pre-pandemic world, visitors to Bhutan paid a daily fee of US$250 per person to be in the country – enough to make budget travelers to the Himalayas weep! On top of this, a US$30–40 daily surcharge is applied for single travelers and couples, placing Bhutan up there with the most expensive destinations on earth.
Though there was a cheaper way to access Bhutan, depending on what time of year you visited. The daily fee dropped to US$200 from December to February and June to August, coinciding with periods when the weather was either too cold or too cloudy to get the best from the Himalayan setting.
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Paro Taktsang, a sacred Vajrayana Himalayan Buddhist temple in Paro, Bhutan © narvikk / Getty Images
What did tourists get for US$250 per day?
In reality, the headline figure of ‘US$250 per day’ was always misleading. The daily fee mandated by the Tourism Council of Bhutan was actually the fixed minimum charge for an impressive all-inclusive package, including accommodation, meals, transport, admission to monasteries, shrines and museums and the services of an expert guide. In the world of all-inclusive tourism, the daily fee for Bhutan was actually a bargain.
Having paid this daily charge, visitors were free to plan out an itinerary with a Bhutanese tour agency, stringing together such legendary sights as the medieval dzongs (fortress monasteries) at Paro, Thimphu and Punakha and the Tiger’s Nest monastery at Taktshang, reached via a half-day trek on a trail north of Paro.
The average trip packaged together a bit of monastery-hopping, a bit of trekking, a bit of gazing in awe at mountain views, a bit of spectating at archery tournaments, a bit of wildlife spotting and a daily dose of ema datse (chilies stewed with cheese) and other Bhutanese delicacies – typically served with bonus dried chilis on the side.
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Terraced rice farming in Punakha, Bhutan © Getty Images / iStockphoto
How has the daily fee benefited Bhutan?
At the core of the daily fee model was a US$65 per day sustainable development charge, which went directly to the Bhutanese government to fund projects from community education to conservation, carbon-neutral infrastructure and organic farming. These measures contributed to Bhutan becoming the first carbon-negative country on earth in 2017 – actually absorbing more carbon dioxide than it produces.
The model delivered dividends for the Bhutanese exchequer. In 2019, the last year before the pandemic, Bhutan welcomed 315,599 high-value tourists, contributing US$345.88 million to the national coffers, but leaving a minimal footprint on Bhutan’s culture and environment.
What does sustainable development look like on the ground? Well, with tourism relieving 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, and some 95% of Bhutan’s electricity is produced using hydropower.
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Has the daily fee helped ordinary Bhutanese people?
In exchange for opening their mountain home to high-value, low-impact tourism, the Bhutanese have achieved a high standard of living by regional standards. Compared to neighboring Nepal, Bhutan spends nearly 40% more on education, with half the unemployment rate and half as many people living under the poverty line. Impressively, almost 100% of the population has access to electricity and clean water.
As well as untouched nature and encounters with landscapes and cultures that make mountaineers and anthropologists go weak at the knees, 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 system of government.
Using measures such as job satisfaction, sense of community, psychological well-being and religious karma, Bhutan is considered to be the happiest country in the world. Bhutan’s tour-only tourism model – with visitors supervised by a guide at all times – has also protected Bhutan’s Buddhist culture from the worst excesses of mass tourism. Indeed, compassion, spirituality and a clean environment are still valued as highly as material possessions.
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Centenary farmers market in Thimphu, Bhutan © Caroline Pang / Alamy Stock Photo
What does the new daily fee structure for Bhutan look like when it reopens in September?
There is little doubt that the daily fee model for tourism played a big role in boosting Bhutan’s famous levels of national satisfaction. And when Bhutan reopens for unquarantined tourism on September 23, 2022, the sustainable development charge will rise from US$65 per day to US$200 per day for most visitors, pushing even more revenue to Bhutan’s development projects.
The government has already confirmed that the increased development charge will be used to offset the carbon footprint of tourism, improve carbon-neutral infrastructure and upskill workers in Bhutan’s tourism sector, supporting Bhutan’s recovery from the Covid-19 pandemic.
So why now? Here’s what Dr Tandi Dorji, Chairperson of the Tourism Council of Bhutan had to say: “Covid-19 has allowed us to reset – to rethink how the sector can best be structured and operated so that it not only benefits Bhutan economically but socially as well while keeping carbon footprints low. In the long run, our goal is to create high-value experiences for visitors, and well-paying and professional jobs for our citizens.”
However, the US$200 daily fee will be on top of charges for accommodation, food, transport, entry to sights and fees for guides. If the Bhutanese tourism model was high-value, low-impact before, the new model takes the idea and supercharges it – in the future, Bhutan will be reserved for visitors with big budgets who are happy to spend big for the perks of low-carbon travel and not have to share these wonders with a crowd.
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Jomolhari Base Camp in Thimphu, Bhutan © DUCOIN DAVID / Getty
Are there any changes for travelers from India, Bangladesh and Maldives?
Under the old tourism model, visitors from neighboring India, Bangladesh and Maldives were exempt from both the sustainable development fee and the need to join an organized tour. This generous tourism policy – and a shared land border – contributed to Indian travelers making up 73% of visitors to Bhutan.
During the pandemic, however, a new daily fee equivalent to US$16 was introduced for travelers from previously exempt countries. The government has indicated that this is likely to rise in the near future, changing the travel dynamic for South Asian travelers significantly.
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Sunrise at Chele La, the highest pass of Bhutan © Getty Images / iStockphoto
So is Bhutan still worth traveling to?
Of course! – though with the higher daily fees, the experience will be more expensive and more exclusive, than ever. Bhutan was always a once-in-a-lifetime, save-up-for-years kind of destination, so all that has really changed is the need to save up for longer before coming. The wonders that you’ll see on arrival – the eye-stretching mountains, the magnificently ornamented monasteries, the deeply traditional Buddhist culture – haven’t changed at all.
And tourist fees are the future of travel – Thailand imposed a US$9 tourist tax in 2022, Venice is poised to levy a €10 entry fee from 2023 and a raft of tourist taxes and surcharges are already in place across the EU. The difference in Bhutan is that you just need deeper pockets.
In exchange for the new higher costs, visitors will be able to see Bhutan in a much more impulsive way than in the past, freed from the obligation to make all arrangements through a Bhutanese tour operator. The new model may also help reduce the small but tangible divide between locals and visitors chaperoned on organized tours.
Our positive take for the future? With the sustainable development fee funding new projects from increased hydropower to the electrification of public transport, that famously clean mountain air maybe even cleaner and fragranced even more keenly with the scent of glacial meltwater and blue pines.