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Impacts of SDF in Bhutan: A Report

sdf, Impacts of SDF in Bhutan: A Report, eTurboNews | eTN
Bhutanese landscape – Photo © Rita Payne
Written by Binayak Karki

With increased SDF rate in Bhutan, the number of visitors seem to slow down. 78,000 tourists visited Bhutan in a year after tourism reopened.

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Over 78,000 tourists visited Bhutan since the reopening of tourism on September 23 last year. However, the number of visitors is still lower than what the government had anticipated. Bhutan expected to welcome 95,000 tourists with a year when it reopened tourism. Tour operators complain increased SDF to be a factor of decreased visitors.

The landlocked Himalayan country aims to hit the pre-pandemic level by 2025.

Bhutan raised their Sustainable Development Fees (SDF) to USD 200 from USD 65. According to the Department of Tourism, only 24 thousand USD-paying tourists have visited the country. Out of which, 10,549 of them paid the old SDF rate of USD 65.

Around 13,717 tourists visited paying the revised SDF of USD 200 per day from September 23 last year until the end of August 2023.

Similarly, 54,613 Indian tourists visited paying SDF Nu 1,200 per day. 

Industry, Commerce and Employment Minister Karma Dorji outlined how difficult it was to meet the target set for tourist arrivals in a year.

“It would be very difficult to reach tourist arrivals at the pre-pandemic level by 2025 going by the current trend of arrivals.”

Dorji mentioned that the government had to implement a 50 percent reduction in the Sustainable Development Fee (SDF) for tourists paying in dollars in order to stimulate growth in the tourism industry.

Last week, the government announced a 50 percent discount on the prevailing SDF of USD 200 for US dollar-paying tourists visiting the country. 

Another modification involves offering a 50 percent reduction in the Sustainable Development Fee (SDF) rates for children aged 6 to 12 years who are visiting as tourists and paying in US dollars.

The new incentives have come into effect from September 1 and will remain effective until August 31, 2027.

Starting in June, the government introduced SDF incentives for USD-paying tourists to promote extended visits across all 20 dzongkhags. Nevertheless, within a two-month trial period, it was observed that this measure didn’t significantly enhance tourism.

Lyonpo reported that according to feedback from tourism service providers, 70 percent of tourists are choosing the four-plus-four policy, indicating that they prefer to stay for just four to five days.

Additionally, Lyonpo added, “The data shows that most tourists are willing to pay only USD 100 per day.”

Lyonpo announced that tourists who have previously booked under earlier incentive packages can still visit Bhutan, but no new bookings will be accepted from September 1. Travelers on existing packages can receive an SDF refund for unused days, for instance, a refund of USD 200 for those on a 4+4 policy staying only six days. The goal is to return tourist arrivals to pre-pandemic levels by 2027 through these policies, while the SDF remains at USD 200 per day, with potential exemptions or concessional rates under the Tourism Levy Act.

About the author


Binayak Karki

Binayak - based in Kathmandu - is an editor and author writing for eTurboNews.

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