Enhancing Bhutan's Tourism Sector: Strategies for Success

Abstract

Bhutan, often called the 'Land of the Thunder Dragon,' is celebrated for its pristine landscapes, vibrant culture, and unique approach to prosperity measurement - Gross National Happiness (GNH). While the Kingdom has gained global recognition for its sustainable tourism practices, recent years have brought forth economic challenges. The COVID-19 pandemic, coupled with repercussions from the conflict in Ukraine, has significantly impacted Bhutan's macroeconomic landscape. After experiencing consecutive years of economic contraction in FY19/20 and FY20/21, there have been signs of recovery in the non-hydro industry and services sectors. However, the revival of the tourism industry has been sluggish, partly due to the Tourism Levy Act 2020, which tripled the sustainable development fee for international tourists, elevating it from $65 to $200 per night and most recently reducing it to $100 per night. Additionally, Bhutan grapples with rising youth unemployment, soaring from 20.9 percent in 2021 to 29 percent in 2022, leading to an upsurge in outward migration. In this context, let's explore Bhutan's post-pandemic tourism industry dynamics and its delicate equilibrium between economic growth, environmental preservation, and cultural heritage.