Will Bhutan tourism infrastructure get a boost thanks to Modi’s visit?

Will Bhutan’s tourism infrastructure get a boost thanks to Modi’s visit?

Modi’s first overseas visit as PM was to Bhutan. PTI image

Indian PM Narendra Modi’s visit to Bhutan is expected to give a much-needed fillip to tourism, given the nation attracts many tourists from India. In fact, 90 percent of the Bhutan’s tourists are foreigners who fly to the nation through 3 important gateways—Mumbai, Delhi and Kolkata.

A large number of travellers to Bhutan from India are people travelling on governmental work largely in the hydro-power sector. According to the 2006 agreement on cooperation between India and Bhutan, the government of India has agreed to develop 10,000 MW of hydro-power in Bhutan for export of surplus power to India by 2020.

Tourism to Bhutan from India is primarily been affected by two factors: a lack of hotels and flights. There are hardly any hotels in the mid-level sector.

A HVS Global Hospitality Services study in 2012-13 reveals that market-wide occupancy among branded hotels was approximate at 55 percent with an average room rent of US $500. Amongst these hotels, the highest occupancy and average room rent recorded was 50 percent at US $660 while the lowest was 45 percent at US $275.

This category of hotel rooms would have increased by 5-6 percent over the last year, said Anirudh Katre, associate director, HVS.

“No Indian would want to spend $500 for a night on his holiday,” a travel operator said.

“It is cheaper by far to instead go to Thailand which offers a lot to tourists by way of attractions—themed parks, beaches—for the family. The high price is one of the reasons why an Indian traveler, given a choice, would prefer to go to Thailand instead of Kerala,” the operator said.

According to figures published by the Tourism Ministry in Bhutan, in 2012, the number of international tourists was 54,685 (against 47,610 in 2011) of which 16 percent were from Japan and 9 percent from China. Of the 30 percent of travellers from Asian countries, India comprises of only one or 0.5 percent of tourists to Bhutan.

Druk Air, the national carrier of Bhutan, is the only airline flying from India to Bhutan. Earlier, the flights were from Delhi, but Kolkata and Mumbai were introduced recently with bi-weekly flights. The tourists who choose to go to Bhutan are usually over 40 or honeymooners.

“Bhutan is a niche destination. It is not a mass market tourism destination. It is for the evolved traveller whose aim is to experience the local culture, nature and also heritage,” explained Karan Anand, head, relationships, Cox & Kings Ltd.

According to Anand, the destination is only just opening up.

Another challenge is that there are few restaurants offering good Indian vegetarian food in the country.

This is not a new phenomenon, say some tour operators, who added that tourism has always been restricted in Bhutan. The country does not encourage backpackers and independent travelers and visitors must travel as part of pre-arranged package or guided tours.

Bhutan’s tourism industry is based on the principles of environmental friendliness, economic viability and sustainability. Mass tourism is prevented by the policy of ‘high value and low volume,’ says Vishal Suri , Chief Executive Officer-Tour Operating, Kuoni India.

But what does Bhutan have to offer visitors? Besides nature and mountains, not much for the family—children, youngsters do not find anything to hold their interest. Neelu Singh, COO, Ezeego1.com, says, the tourism products that are offered predominantly include festivals and cultural sites, which are an integral part of lives of the local people. As a result of this, other tourism products often do not get fully explored. This creates a high incidence of seasonality, which is one of the challenges of tourism in Bhutan.

Modi’s visit could address a few problem areas where tourism is concerned. Primarily, encourage investment in setting up of new hotels.  The need for the hour is budget hotels that can lure all segments of tourists, besides those who visit the country presently.

“Even if the number of tourists were to increase, the country does not have enough rooms in hotels to take that load,” said an analyst, who did not wish to be named.

There are limited flights between India and Bhutan, which can be increased if the infrastructure is developed, an analyst said.

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