During the fourth sitting today, the Economic Affairs Committee (EAC) presented its review report on the State of Tourism in Bhutan to the House for deliberation. Chairperson of the EAC, Hon’ble Tshewang Rinchen, shared the report, which encompassed its background, objectives, methodology, findings and observations, and recommendations.

He informed the House that the review was conducted to assess the efficacy of existing tourism policies and legislation, evaluate its economic contributions, examine regional and seasonal disparities, analyse product diversification and community engagement, and review the utilisation of digital technology within the sector.

He reported that while tourism contributed approximately 10 percent to Bhutan’s Gross Domestic Product (GDP) in 2019 and supported over 52,000 jobs, the sector remains heavily concentrated in the western Dzongkhags, with nearly 90 percent of tourists visiting Paro, Thimphu, and Punakha. He underscored that eastern and southern regions continue to receive minimal tourist inflow due to limited accessibility and inadequate services. In 2024, total tourist arrivals amounted to 127,115, reflecting partial recovery from pre-pandemic levels. Revenue generated from the Sustainable Development Fee (SDF) reached Nu. 2,331.83 million in 2023-24, the highest in the past decade, demonstrating the efficacy of the revised SDF policy.

He further emphasised critical challenges faced by the tourism industry, including regional and seasonal imbalances, a lack of product diversification, limited infrastructure, and ongoing recovery difficulties in the hotel industry following the COVID-19 pandemic.

To address these challenges, the Committee recommended implementing a duration-based SDF waiver, enhancing domestic connectivity, restructuring hotel loans, bolstering tourism product development, digitising tax systems, discontinuing the airfare subsidy, and strengthening regulations to combat fronting and illicit foreign investment. 

Following the presentation, Members requested clarifications on the report and provided valuable feedback.

Tomorrow, the House will continue deliberating on the recommendations proposed by the Economic and Social Council (EAC) on the State of Tourism.