Having availed many years of work experience and research opportunities in the field of tourism and aware of the present concerns raised on the future of tourism I feel responsible to share my views. However, recognising the complexity of tourism I would like to dwell only on the fixed minimum daily pricing system which seems to be the most contentious issue and probably has the maximum implication on the growth of tourism in our country.
Tourism as many of us would agree offers immense potential to be a positive force for sustainable development but only under the precondition of sound planning and management. Retrospect on our nation’s tourism journey and one can only be inspired and grateful by the visionary leadership of His Majesty The Fourth Druk Gyalpo under whose enlightened guidance a cautious approach was adopted.
This cautious policy not only generated substantial revenue but also shielded us from many of the negative impacts and pitfalls of tourism growth. We remain fortunate to enjoy this continued flow of both tangible and intangible benefits. Now we are at a critical time with continuous debates on the outcome of which is making me increasingly apprehensive over myopic decisions that could have far reaching implications to impair the future potential for tourism development.
While there is general consensus on this cautious policy of “High value, low impact”, there are differing views in its interpretation. In the interest of making quick benefits some are inclined to believe that the minimum pricing system has served its purpose and is now become redundant. Conveniently people are beginning to delink the connection between the policy and the pricing system.
What we must understand is that the policy is actually anchored by the minimum pricing system and they are part of each other and therefore liberalising this system would only weaken the sustainability of tourism growth. We must realise that the high value low impact policy has been successful largely because of the pricing system. While differences arise between many stakeholders it seems to be more apparent between the tour operators and hoteliers.
It is a misconception that this system only benefits the tour operator and that the hoteliers are completely in the hands of the tour operators. We need to be rationale to see a mutual benefit between the two. Hoteliers should not be misled to believe that the present system is crippling their growth and that a liberalised pricing system would be to their advantage.
Essentially we have the opportunity to compare both the situations in practice. Having the pricing policy applied through the international visitors and a liberalised pricing system applied through the regional tourists. With both the situations happening concurrently we can see for ourselves the rising negative impacts becoming increasingly evident from a liberalised pricing system.
Some hoteliers also claim that they are compelled to sell their rooms at rates to suit the tour operators. This problem can be addressed through the hotel and accommodation classification system implemented by Tourism Council of Bhutan. Past studies on tourism has indicated that under-cutting (a practice of selling tours below the minimum daily rates) is a serious problem that needs to be contained.
Ironically instead of looking into solutions to address this problem liberalising the pricing system only means we are legalising an unhealthy practice. No system is perfect and though there may be some flaws with the current pricing system, removing it entirely will only take away our tool for the long term sustainability of tourism development.
The pricing system has helped us buy time to prepare our capacity in managing tourism development. Unfortunately while we may not have progressed far in strengthening our tourism product on the other hand the pricing system has effectively safeguarded our tourism resources. We have secured an image brand as one of the top travel destinations, an envy for many countries. The government should not be deluded in thinking that sustainable tourism development can be achieved by merely increase in revenue through royalty and accomplishing set target arrival numbers. Sustainable tourism development requires achievements far beyond these indicators.
Considering all our advantages Bhutan has the best chance of being a model for sustainable tourism. We do not need to depend on any external consultants like Mckinsey & Co making ludicrous recommendations without properly understanding the context of our tourism growth. We understand our situation best and the solution lies within our existing capacity. Tourism is a multi dimensional sector and it is only logical that the starting point for a successful journey to sustainable tourism is through effective partnerships and collaborations between all the stakeholders. We need to trust each other and enhance our communication. The sheer diversity of tourism involving people from different disciplines means a holistic or systematic approach is necessary.
In conclusion I would like to reiterate that too much time has gone by squabbling over the minimum pricing system. It’s time we gather our wisdom to acknowledge this as a valuable tool to be used for sustainable tourism growth. Let us be prudent and appreciate the benefits we are reaping of a system founded on the visions of our Fourth Druk Gyalpo. Removing the pricing system will only provoke mass tourism and cause irreparable damages impeding future sustainability. It is high time we focus our discussions and debates on other more meaningful issues to enhance sustainable tourism growth in our country.
Some of the advantages in retaining the fixed minimum daily pricing system
The demand for Bhutan as a travel destination is very high. However the limited carrying capacity due to the ecologically and culturally sensitive disposition of attractions and services means we are already close to achieving our upper limits of visitation numbers. When these numbers can be easily achieved with a minimum pricing why dismantle the pricing system. This will only mean achieving the higher numbers at a faster rate with cheaper costs offering less benefits and more negative impacts.
The system has contributed in substantial revenue generation making it the highest contributor of foreign exchange and at the same time contributing to employment and prosperity of many of our own people.
Besides the earnings from daily royalty deducted from the tour operators the transparency of the online system enables further substantial contributions through taxation. Removing the minimum tariff system would leave room for manipulation leading to lesser contribution through taxes.
The present system makes it easier to enforce proper regulation and curb revenue leakage, a major concern faced in many developing countries promoting tourism.
It gives our own locals the advantage of having a stronger hold on our system limiting the external agents to exploit our resources.
We have the advantage of seeing the problems created through a liberalised policy implemented for regional tourists. Removing the minimum daily tariff will lead to further surge of mass tourism from other regional visitors presently paying the minimum tariff.
Contributed by Karma Tshering a freelance tourism specialist. Karma obtained his masters and PhD in sustainable tourism development from the University of Sydney. He previously worked in the conservation sector under the Department of Forests and Parks advocating nature recreation and eco-tourism programs.