The Sustainable Development Fee (SDF)
Bhutan reopened its doors to international tourism on September 23, 2022, after a nearly two-and-a-half-year closure due to the COVID-19 pandemic. Along with reopening, Bhutan introduced an important reform in its tourism policy — the Sustainable Development Fee (SDF). This fee is part of the country’s ongoing effort to maintain its long-standing vision of high-value, low-impact tourism, ensuring Bhutan remains a premium and sustainable travel destination.
The parliament in June 2022 passed the Tourism Levy Bill 2022, marking a significant policy shift; the SDF was increased from USD 65 per person per night for international visitors to USD 200 per person per night. Additionally, Bhutan discontinued the previous Minimum Daily Package Rate (MDPR) system, providing travelers with greater flexibility to plan their trips.
The SDF is levied in addition to all other travel costs, including accommodation, meals, guides, transportation, and other related services. Under the revised policy, visitors are no longer required to book exclusively through licensed tour operators. Travelers now have the option to book directly with hotels and service providers.
Despite this flexibility, booking through a registered Bhutanese travel agency is still highly recommended as these agencies provide expert advice, handle logistics, and ensure a smooth, enjoyable travel experience.
Purpose and Vision
The Royal Government of Bhutan has always taken a cautious and sustainable approach to tourism, prioritizing the protection of cultural heritage, environmental integrity, and community well-being. The introduction of the SDF helps to manage tourism growth while safeguarding the country’s capacity to maintain its pristine environment and cultural authenticity.
Revenues from the SDF are reinvested in the tourism sector to:
- Improve the quality of tourism services (such as better-trained guides and upgraded accommodations).
- Enhance hygiene and eco-friendly infrastructure.
- Support sustainable tourism practices, including minimizing carbon emissions.
This initiative aligns with Bhutan’s goal of becoming a world-class, eco-conscious destination while keeping tourism’s impact on the environment in check.
Addressing Key Concerns
The revised SDF also aims to address issues caused by unmanaged tourism, such as overcrowding at sacred sites, waste generation, pollution, and carbon emissions. By introducing this fee, Bhutan is better equipped to preserve its natural beauty and cultural sanctity for future generations.
Some categories of visitors are exempt or eligible for discounts on the SDF:
- Children under five years of age (fully exempt from the fee).
- Children aged six to twelve (eligible for a 50% concession on the SDF).