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This Country Just Cut Its Sky-High Tourist Tax in Half | Frommer's MC_Noppadol / Shutterstock

This Country Just Cut Its Sky-High Tourist Tax in Half

Turns out imposing a ludicrously expensive daily fee on tourists isn't great for tourism. Who knew. 

The Himalayan kingdom of Bhutan has announced that it is cutting in half the $200 per day charged to most international tourists. The government describes the newly discounted but still considerable $100 daily fee as a measure to boost the country's tourism, which continues to lag following the lifting of Covid restrictions in September 2022. 

That's when Bhutan more than tripled its "Sustainable Development Fee" of $65 to $200 per person per night, arguing that the increase was necessary to offset the carbon footprint of tourists and build a "more sustainable tourism sector." 

Instead, the country's tourism sector has dwindled to such a degree that it now needs juicing. From getting more than 315,000 international visitors in 2019, Bhutan has welcomed just 56,000 tourists so far this year, government officials told Reuters—and about 42,000 of those visitors were Indian nationals, who only have to pay 1,200 rupees ($14.50) per day. 

Bhutan has long maintained strict limits when it comes to tourism, keeping borders closed to international visitors until 1974 and afterward enforcing a policy that required travelers to pay what was known as the "Minimum Daily Package Rate" of $250 to cover accommodations, meals, a mandatory tour guide, and the $65 that went to the government. 

Consequently, just about the only way to see Bhutan as a foreigner was on an all-inclusive group tour that by law charged each customer at least $250 per day.

With the introduction of the newly exorbitant Sustainable Development Fee in autumn 2022, Bhutan dropped the Minimum Daily Package Rate requirement but forced visitors to pay an extra $200 each day directly to the government—and the fee no longer covered other travel expenses such as hotels, meals, and guides. For most, the prospect of a Bhutan trip became even more cost-prohibitive than before. 

The government's evident aim was to attract fewer but wealthier visitors, perhaps in a bid to avoid the problems that have plagued nearby Nepal, where Himalayan treks have been marred in recent years by overcrowding and acres of garbage left by climbers on Mount Everest and other peaks.

But it looks like Bhutan's plan to reduce visitors worked a little too well. To help turn things around, the new $100 daily fee will go into effect September 1 and remain in place for the next 4 years, at which point the government will decide whether to reinstate the $200 rate. 

Pictured at top: Paro Taktsang, a cliffside Buddhist monastery in Bhutan's Paro District