Sustainable Development Fee (SDF)
Sustainable Development Fee (SDF)
The new Sustainable Development Fee (SDF) of Bhutan

The Sustainable Development Fee (SDF) bill for tourism in Bhutan has garnered much international attention, bringing all eyes to Bhutan.

After much discussion, The National Assembly of Bhutan approved the Tourism Levy Bill of 2022 on June 24, 2022. 

The sustainable development fee (SDF), which was previously 65 USD per night per person for international tourists has been raised to 200 USD per night. 

As a result of this new policy, visitors from India, the Maldives, and Bangladesh must now pay Nu.1,200 per person per night, which was previously free.

However, the Minimum Daily Package Rate (MDPR) has been eliminated. Many questions are up in the air in light of the implementation of Bhutan’s New Tourism Policy to Levy the Sustainable Development Fee (SDF)

We at Norbu Bhutan Travel Pvt. Ltd. are here to answer all your questions regarding the matter.

What is Bhutans new SDF

The High-Value Low Volume Tourism Policy Of Bhutan

Sustainable Development Fee (SDF)
The Sustainable Development Fee (SDF) to increase from USD 60 to USD 200

In 1974, Bhutan welcomed travelers after emerging from decades of self-imposed isolation. 

The government of Bhutan has always taken a cautious approach to tourism activities to mitigate the negative effects of mass tourism, hence the introduction of the high-value, low-volume tourism policy. 

Bhutan’s high-value, low-volume tourism policy was designed to preserve its vibrant, living culture and to promote Bhutan as an exclusive travel destination. 

Visitors will be able to experience Bhutan’s dynamic and rich culture without being surrounded by crowds of tourists.

By imposing a Sustainable Development Fee (SDF) of USD 65 per night, which is now revised to USD 200 per person, per night, Bhutan will be able to limit the number of tourists entering Bhutan and travelers that value such a place will always visit Bhutan.

Why Introduce The New Tourism Policy Now?

Sustainable Development Fee (SDF)
Sustainable Development Fee (SDF) to preserve its pristine nature and culture

For most tourists, Bhutan remains a unique and fascinating travel destination with a certain air of mystery that has stirred up their interest for decades. 

Nevertheless, the transformational times brought on by the outbreak of Covid-19 is compelling nations worldwide and Bhutan to reform their Sustainable Development Fee (SDF) policies. 

Bhutan, however, wants to implement a practical strategy to ensure the sustainability initiative taken by our visionary kings and to embrace a more all-encompassing growth path for the country.

Bhutan, a tiny landlocked nation, has seen a surprising increase in tourists visiting the country in recent years. 

Overcrowding in monasteries which compromised their sanctity and increased the carbon footprint and waste production all played a role in the introduction of the new Sustainable Development Fee (SDF) policy.

Bhutan has always taken great pride in being the only nation with 70% of the country under forest cover. It is a carbon-neutral country and passionately protects its religious and cultural heritage.

Also, one of the primary reasons for the change of the Sustainable Development Fee (SDF) pricing, is that the Government of Bhutan plans to reinvest the Sustainable Development Fee (SDF) to raise the industry’s general standards for guides, hotels, meals, hygiene, and overall living quality. 

With the improved tourism infrastructure, Bhutan will develop a true “high value, low volume” high-end tourism industry. A decrease in carbon footprint will also result from the emphasis on long-term sustainability.

Apart from the introduction of the Sustainable Development Fee (SDF), the Minumum Daily Package Rate (MDPR) was dismissed to attract tourists and ensure better flexibility for them.

Before, visitors had to plan their itinerary with the help of a local tour operator that included the Sustainable Development Fee (SDF) and now with the new policy can come into the country and  customize their own trip. 

Revised Sustainable Development Fee (SDF) 

Sustainable Development Fee (SDF)
The new Sustainable Development Fee (SDF) will help Bhutan provide better services.

In accordance with Bhutan’s “High Value, Low Volume” tourism policy, the SDF was raised to USD 200. 

The Sustainable Development Fee (SDF), however, exempts day tourists who do not travel past the first designated location (Border town, Phuntsholing), minors under the age of five, and children between the ages of six and twelve, who pay a 50% concessionary tax rate.

The following is an estimate of the price of a full tour that includes a Sustainable Development Fee (SDF), standard accommodation, a tour guide, transportation, and meals:

  • 3 pax (passenger) or more: USD 300 to USD 380 per person per day
  • 2 pax (passenger): USD 350 – USD 400 per person per day
  • Single traveler: USD 400 – USD 480 per person per day

The figures above are only approximations because a lot will rely on the hotel visitors choose to stay in, the activities they partake in, and the area they choose to explore. 

Traveling by local cab and solely visiting Thimphu and Paro for sightseeing without a tour leader may cost less than the above mentioned prices. 

Now that the government has passed on the new rule, it is in the hands of the visitors to sustain the country’s environment and culture.

The cost to travel to Bhutan and the tour packages are anticipated to increase by at least 30% due to the new policy. 

Previously, a 7-day all inclusive tour in Bhutan, which is the average length of stay for most visitors, would cost at least USD 1740.

This price included the standard Sustainable Development Fee (SDF), housing, all meals, and the services of a tour guide and driver for transportation. 

Now, even if tour operators keep out-of-pocket costs to a minimum, visitors can anticipate the same 7-day tour in Bhutan to cost at least USD 2500.

The Revised Sustainable Development Fee (SDF) Ushers in the New Normal

Sustainable Development Fee (SDF)
Increasing people’s standard of living with the new Sustainable Development Fee (SDF)

With this choice, Bhutan will venture into new opportunities or adversity. However, increasing people’s income is undoubtedly the main goal. 

It was reported that numerous nations were considering adopting Bhutan’s former minimum Sustainable Development Fee (SDF) pricing policy for travel to lessen the negative effects of mass tourism and safeguard their environment and culture. 

Bhutan continues to forge her path when it comes to welcoming tourists and visitors to her untouched beauty. 

But at a Sustainable Development Fee (SDF) of USD 200 per night, it will undoubtedly put the post-pandemic market to the test and set new standards for tour operators and the hospitality industry of Bhutan in general. 

It is in the hands of the hospitality industry to provide exclusive services to encourage more travelers to Bhutan.

Conclusion

The new Sustainable Development Fee (SDF) has undoubtedly raised some issues for Bhutan’s hospitality sector. Still, the fee will support initiatives that support carbon-neutral travel and help the country’s tourism business become more sustainable. 

This involves reducing the carbon footprint of visitors and retraining industry employees. 

Until recently, all visitors to Bhutan on all-inclusive package tours had to pay the Minimum Daily Package Rate (MDPR), which applied to all visitors. 

The cost, which included lodging, food, transport, and the Sustainable Development Fee (SDF), was roughly USD 250 during the high season and USD 200 during the off-season. 

Be a part of aiding a developing nation in sustaining their religion, culture, and traditions and embrace the new High-Value Low-Volume practice. 

Contact us today to know more about important travel updates before traveling to Bhutan!

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