Lhakpa Quendren
Phuentsholing—Bhutanese travel agents in Phuentsholing, who have been struggling since the pandemic, are facing growing competition from overseas travel agencies that offer tour packages to Bhutan at a much lower price, impacting their business and turnover.
For example, a travel agent in Jaigaon, India provides a seven-night, eight-day tour package to Bhutan at Nu 33,500, which includes travel insurance. In contrast, local agents charge around Nu 35,500 for a similar package without insurance.
Despite an increase in Indian tourists travelling through Phuentsholing, local travel agents are witnessing a decline in business.
This has hurt local agents, although it has benefited the government through Sustainable Development Fees (SDF), according to local tour operators.
“Overseas agents focus on volume, sending large groups to hotels and securing the best rates for their clients,” said a Phuentsholing tour operator. “An increase in tourists preferring to travel via Bagdogra due to high domestic airfare should ideally boost our business.”
Bhutanese tour operators in Phuentsholing also cite higher living costs and rental expenses in Bhutan as factors that make it difficult for them to offer competitive packages compared to those offered by overseas travel agents.
In addition, while local operators use three-star hotels, overseas agents often opt for budget or two-star accommodations, further driving down costs
The government’s post-pandemic tourism policy change, which allows anyone to participate in the tourism business, has hit licensed travel agents hard, forcing many to close shop, with only about five agents remaining in Phuentsholing today.
“Tourists can now apply for visas and permits online and arrange guides and vehicles upon arrival. Many overseas agents have their own transportation and direct contracts with Bhutanese guides,” another operator said.
The issue of Bhutanese tour guides picking up tourists directly from Jaigaon without involving local agents has been addressed in meetings, according to travel agents.
Local transportation costs present another challenge. While tourists driving their own vehicles face a fee of Nu 4,500 per vehicle per night, overseas agents offering their own transportation often provide lower rates. This discrepancy allows foreign packages to remain more attractive.
Local agents are also grappling with the impact of cheaper packages on hotel rates in Phuentsholing. Hotels are now offering discounts of Nu 100 to Nu 150 per room to remain competitive. “Many hotels are surviving on discounted rates post-pandemic,” said a local hotelier. “Overseas agents often direct tourists to hotels in Jaigaon, affecting our business.”
Despite local agents participating in travel fairs in India, they stress the need for collaboration with international counterparts, with Bhutanese agents managing travel arrangements within the country.
Some overseas operators promoting Bhutan since 2010 maintain that, even with SDF charges, their Bhutan travel packages remain competitive with other destinations like Sikkim and Nepal, and they deny underselling Bhutan.
The founder of Let’s See Tours and Travels, based in Guwahati and Siliguri, Lohit Sharma, said that his agency believes in quality tourism and always promotes high-quality packages. His company has sent more than 10,000 Indian tourists to Bhutan after the pandemic.
“We do not support the cheapest packages, as they do not lead to satisfied guests. We understand that cheap packages can also affect the sustainability of the hotel business,” he said.
Lohit Sharma said that they support Bhutan’s strict tourism policy. “Before the pandemic, Bhutan was accessible to everyone. Now, Bhutan will attract more high-quality tourists,” he said.
He added that his agency, in partnership with Veena World, will focus on promoting eastern dzongkhags as the Samdrupjongkhar border gate opens to international tourists.
However, he said there may also be tour operators offering cheap packages. “We cannot blame them as it is their marketing strategy. With many travel agents in Jaigaon, it is difficult to determine which ones are offering the lowest prices,” he said.
A tour operator in Jaigaon said that all hotels offer the same rates to everyone, though local tour operators occasionally provide better deals. “Our primary focus is to ensure a satisfying and comfortable experience for our guests in Bhutan. Lowering hotel rates would mean compromising on service,” he explained.
He said that his agency had sent about 400 to 500 tourists to Bhutan during March, April, and May. “We work with various partners and local collaborators to assist international guests,” he added.
Overseas tour operators said that Bhutan is gaining market traction and is expected to perform even better in the coming years.
“Generally, we use digital marketing to attract Indian tourists and also participate in many travel fairs in major cities like Kolkata, Delhi, Mumbai, Ahmedabad, and others, to promote destinations such as Bhutan, Nepal, and the Northeast,” the tour operator of RS Travels in Jaigaon said.
Overseas tour operators recommend utilising the SDF funds to develop additional tourist attractions and to enhance basic facilities, such as clean restrooms along highways and at sightseeing locations.
According to the Department of Tourism, Indian tourist arrivals increased from 11,153 in 2022 to 72,659 in 2023 and remained high at 54,618 through July 2024. Overall tourist arrivals climbed from 20,897 in 2022 to 103,066 in 2023, with 78,235 visitors in the first half of 2024.
Tourists from other top nationalities include those from Singapore, Germany, Vietnam, Thailand, the Republic of China, Canada, Italy, France, and Indonesia.
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