Why Bhutan hopes tourists will put a smile back on its face

The "kingdom of happiness" is feeling sad as it faces unprecedented emigration and rocketing youth unemployment alongside other economic challenges.

As Bhutan tries to restore its fortunes, "tourism is seen as a major lever to pull", said Bangkok Post (BP), so there's "good reason" to visit the tiny Himalayan nation now, "before bigger crowds descend", added Bloomberg UK.

Major lever

When he was running for office last year, Tshering Tobgay, now prime minister, pointed to an average economic growth rate of just 1.7% over five years and said Bhutan's economy was "on the brink of collapse".

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There are now high levels of youth unemployment, dwindling foreign currency reserves and one in eight Bhutanese lives in poverty, according to a report from the World Bank. This has led to many residents trying their luck elsewhere: "last year, 1.5% of the population moved to Australia to work and study", wrote The Guardian.

As more people leave, fewer arrive. Bhutan welcomed 103,000 visitors in 2023, about two-thirds below its pre-pandemic record reached in 2019, so tourism is considered vital to address the economic problems. The new target is to return to 300,000 visitors annually, but with a "more diverse consumer base", said BP, including at least 50% from non-Asian markets.

Since Bhutan started welcoming tourists in 1974, it has focused on "low-volume crowds and high-paying guests" who are drawn to panoramas of "sweeping Himalayan mountain vistas and Buddhist monasteries perched on cliffs", but it has also "earned a reputation" for being "inaccessible to the average tourist".

So to "incentivise the growth of travel", Bhutan is addressing "roadblocks, real or perceived", around "access and cost". Its sustainable development fee – or tourist levy – which was as high as US$200 per person a day in 2022, has been halved.

Twice weekly flights are now taking off from Dubai to Paro, connecting Bhutan directly to the Middle East for the first time. An online directory and booking portal has also been launched, allowing "a la carte planning", so the "independent-minded traveller" can browse, compare and directly book tour guide services and accommodation, offering "the tools to shape their own trip at potentially lower costs".

Like lemmings

Kinley Gyeltshen, chairman of the Association of Bhutanese Tour Operators , said the new portal is "a game-changer". Arrivals rose 97% in the first quarter of 2024, compared with the same period a year ago, with gains from China, Germany, Singapore, the UK and the US.

But "marketing the destination more broadly has its risks", said Bloomberg, and as it appears more frequently on social media feeds, "travel influencers" are starting to take note.

This means the government and tour operators are "caught with that dilemma" of wanting to boost numbers, but paying "the penalty" with the effects, Brent Olson, founder of Ethos Bhutan, told the publication. Once that content spreads and "hooks millions of people", they are "like lemmings and they follow the same path". It becomes a "tricky balancing act" and would not take a lot to "overwhelm" Bhutan's small towns and cultural sites.

The "cultural appeal" of the country, including "prayer flags, 4K colour and a deep spirituality" is "bound up with its serious embrace of environmental stewardship", said The Independent, and extensive tourism would "seriously threaten all of this".

Togbay said that the country recognises both "the opportunities" the bid for more visitors brings and "the responsibilities we hold to manage it wisely". If demand begins to outstrip the 300,000 visitor target, the sustainability fee may yet go up again.

All of this means there's "no time like now", said Bloomberg, to avoid the crowds who are "thinking about visiting the Land of the Thunder Dragon".