Bhutan’s tourism industry began in 1974. It was introduced with the primary objective of generating revenue, especially foreign exchange; publicizing the country’s unique culture and traditions to the outside world, and to contribute to the country’s socio-economic development. The royal government has always been aware that an unrestricted flow of tourists can have negative impacts on Bhutan’s pristine environment and its rich and unique culture. The government, therefore, adopted a policy of “high value-low volume” tourism, controlling the type and quantity of tourism right from the start. Until 1991 the Bhutan Tourism Corporation (BTC), a quasi-autonomous and self-financing body, implemented the government’s tourism policy. The government privatized tourism in October 1991 to encourage increased private sector participation in the tourism sector. Today there are more than 2000 licensed tour operators in the country but only 485 of them did business last year. Currently the minimum daily tariff set by the BTCL for both cultural tours and treks is US$250 for the high season and US$200 for the lean season. There is no quota or limit on the number of tourists allowed to visit Bhutan. Rather the volume of tourists coming to Bhutan has been limited by the capacity constraints of tourism infrastructure due to the pronounced seasonality of tourism in the country. March/April and October/November are the top tourist seasons as the weather is best for trekking and cultural festivals are taking place in different parts of the country. So far the royal government’s overall objective of maximizing foreign exchange earnings while minimizing adverse cultural and environmental impacts of tourism seems to have paid off. The tourism industry has made significant contributions to the socio-economic development of the country, especially after the privatization of the industry in 1991.

A high level of profits is available to tour operators and an increasing number of Bhutanese entrepreneurs are investing in the tourism sector. Bhutanese have also found employment as guides, cooks, transport operators, and hotel and restaurant owners. Tourism contributes significantly to rural incomes through earnings from tourist transport and portage. Tourism has also provided the impetus for the development of the service sector, including hotels, restaurants, transportation and communication. Another visible impact of tourism has been the promotion of the indigenous cottage industry and the setting up of handicraft shops in frequently visited areas.

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