I think the title is correct. The annual licence fee was dropped from 25,000 to 12,000. But interest on a deposit of 3 lakhs at 12% works out to 36,000. So new licence fee is about Nu. 48,000 not to mention that many small operators don’t have spare cash like 3 lakhs to leave in hands of DOT. This ruling is definitely in favor of big fish. Even in this article you can hear big tour operators supporting the rule - why would any tour operator agree to part with 3 lakhs unless they figure something else is benefiting them?

From Bhutan Observer - Thimphu:  14 September 2007 The tourism department has introduced a mandatory system of making a security deposit of Nu. 300,000, and the majority of the small tour operators fear they may have to close shop in 2008.

Many of the small companies are unhappy with the security deposit, saying it is more than they can afford. Among the most threatened operators are recently established small timers like Ugyen Dorji (name changed).

“I put in everything my parents had to set up my new agency so I now have neither money nor assets to mortgage,” he said. “My tour operator friends are unhappy about it and I am sure that there are many like us who feel the same.”

Ugyen complained that the tourism department should have called for a general meeting of all the tour operators and listened to the concerns of all parties affected instead of discussing the matter with only the Association of Bhutanese Tour Operators (ABTO) committee members.

The tourism department’s Director General, Lathu Wangchuk, defended the new rule on the security deposits saying it was necessary in order to discourage ‘fly-by-night’ tour operators.

“There are lots of illdisciplined operators who do not do their bookkeeping and service providing, so the department had a long meeting with the stake holders to come up with this new rule,” he said, adding that all tour agencies that did not abide by the new rule would be denied the licence to operate.

“This is an international norm to guarantee consumer protection.” But the aggrieved parties are not buying that line of argument. One operator, who requested anonymity, told Observer, “Nu. 300,000 is no guarantee that defaulters will not default again.”

Another operator said that, in such desperate times, the government appeared hell-bent on crippling him rather than helping him find his feet. A freelance guide said the new rule appeared to favour the bigger and more affluent companies who could now take over the entire market.

Small operators admit that the tourism department’s recent reduction of the license renewal fee from Nu. 25,000 to Nu. 12,000 had been a welcome move but the new ruling nullified it.

While small companies complain on one hand, there are operators on the other side of the fence – mostly financially stronger companies – who accepted the new rule. One of them remarked that, if people were really serious, the deposit should not deter them.

The Managing Director of Yangphel Adventure Travels, Karma Lotey, who is also one of the ABTO committee members, told Observer that the rule introduced by the tourism department should be accepted as it was backed by valid reasoning.

He said that when the tourism department had called for the meeting with the committee members, there had initially been mixed feelings.

“But we all came to accept this rule taking into consideration the reasons the department had cited,” he said.

An ABTO officer suggested that operators who had no money could mortgage fixed assets with a bank.

Last year there were 17,348 tourist arrivals, while this year over 19,000 are expected. Meanwhile, the small operators remain worried sick. The deadline for submitting the security deposit, October 31, looms just around the corner.