Why the change in SDF?
On the 24th of June 2022, the National Assembly passed the Tourism Levy Bill of 2022. With this new act, the sustainable development fee (SDF) of 65 USD per night has now been increased to 200 USD per night. Along with the increase in the SDF, the Minimum Daily Package Rate (MDPR) has been removed.
Read more about the bill here.
The High-Value, Low-Volume Tourism Policy
In an effort to reduce the negative consequences of mass tourism, the government of Bhutan has always adopted a cautious approach that balances sustainability and meaningful travel experiences, including
Bhutan opened up to Tourism in 1974 after it came out of centuries of isolation. However, the government adopted a cautious tourism policy from the beginning to avoid the negative impacts of mass tourism.
Bhutan’s consistent tourism policy of “high value and low volume” was crafted to ensure its rich living culture. The kingdom represents a mystical destination left for those seeking a journey back in time. Visitors walk into a vibrant culture still living in the dances and songs, festivals and legends, the art and architecture.
However, with the disruption of COVID-19 to the economies around the world is driving countries all over the world, including Bhutan, to modify their SDF policies.
Beyond protecting the country’s natural environment it will benefit to preserve Bhutan’s cultural heritage and traditional values.
The SDF will also ensure long-term economic goals which provide socio-economic benefits to all stakeholders of Bhutan.
The Previous Sustainable Development Fee of Bhutan
Previously, visitors to Bhutan had to pay a Minimum Daily Package Rate (MDPR) of USD 200 USD to USD 290 per person per day, depending on the number of travelers and the time of year. Luxury hotels and experiences availed a higher MDPR. The government had allocated USD 65 toward the SDF and the remaining money was utilized for hotel rooms, meals, and transportation.
Why Raise the SDF Now?
According to Prime Minister Dr. Lotay Tshering, one of the key reasons for the SDF price modification was to reinvest in the local economy by enhancing the overall standard of tourism, including guides, hotels, meals, and cleanliness.
As a result of recent enhancements to its tourism infrastructure, Bhutan is poised to transform into an exclusive “high value, low volume” destination. The emphasis on long-term sustainability will also decrease the carbon impact.
What This Means for Travelers
Overall, the new policy will increase the cost of travel to Bhutan by at least 30%. The responsibility of preserving the nation’s ecology and culture now rests with travelers as they participate in the process of supporting a country that is still evolving in its efforts toward cultural preservation.
Previously, a 7D/6N popular tour for most travelers would minimally cost 1750 USD which includes SDF, lodging, all meals, and the inclusion of a trained guide and drivers for transportation.
Thus operators for tour packages are expected to cost to at least 2500 USD should they try to keep out-of-pocket expenses to a minimum.
Independent backpackers travelers are not permitted to Bhutan. Travelers must have a guide and only reserve services with a licensed company that is permitted by the government.
How much will tourists have to pay to visit Bhutan now?
A complete tour inclusive of SDF, standard hotel, tour guide, transportation and meals will cost approximately:
3 pax or more : 300 to 380 USD per person per day
2 pax: 350 – 400 USD per person per day
Solo: 400 – 480 USD per person per day
Above are just rough estimations as much of it will depend on which hotel the tourists decide to stay, what kind of activities they want to do and which district they want to visit.
If a tourist would like to visit only Thimphu and Paro for sightseeing’s without any tour guide and travel by local taxi, the price might be reduced slightly.
How about regional tourists visiting Bhutan?
This is the latest tourism bill that has been passed after the Tourism Levy Bill of 2020. As per the Tourism Levy Act of Bhutan 2020, regional tourists from Bangladesh, Maldives and India will be charged a concessional Sustainable Development Fee (SDF). The levy of SDF came into effect from 1st July 2020. The SDF for regional tourists is set at 1200 BTN (~15 USD) per night, and they will have to hire a guide and transportation.
