Tourism revival in Samdrupjongkhar stifled by credit crunch

The reopening of the Samdrupjongkhar border gate for international tourists on November 7 last year brought renewed hope to a tourism business battered by the pandemic. Yet, hoteliers, travel agents, and taxi drivers, have not been able to leverage the opportunity due to limited access to credit.

The tourism industry in Samdrupjongkhar, which includes hotels and transport service providers, is struggling to modernise and meet the expectations of the tourists. With most banks rejecting loan applications due to high-risk assessments or non-performing loans, many are struggling to upgrade infrastructure and services.

Phurba Wangdi, manager of Hotel Friends, said that hotels with outdated infrastructure lost the competitive edge over others. “Without modern infrastructure, we risk losing tourists to better-equipped destinations.”

The exclusion of the tourism sector from the Economic Stimulus Plan (ESP) has left industry stakeholders feeling neglected.

Karma Choeda, owner of Ama Hotel, said that it is simply impossible to upgrade the hotel without access to credit. “It is disheartening that the Economic Stimulus Plan (ESP) excluded us, even though industries like manufacturing, which operated during the pandemic, were supported.”

Another hotelier called for tailored interventions such as low-interest loans or targeted credit schemes. “We contribute significantly to government revenue and the local economy. If the government doesn’t support us, who will?”

Travel agents and transport service providers also face similar struggles.

Currently, there are 21 hotels with lodges and five travel agents in Samdrupjongkhar town.

Dechen Lhamo, the owner of East Yangyoe Tours and Travel, said banks rejected her loan application to purchase a tourist-friendly vehicle. “Comfortable travel options are essential, but financing remains a major hurdle,” she said.

Kuenzang Leki, the owner of KL Tours and Travel, said that although the eastern dzongkhags have potential for tourism, they lack standard infrastructures and tour operators.

“We do not have qualified tour guides, operators, and freelancers like in the western dzongkhags. To bridge this gap, providing incentives and easy access to finance would attract and support tour operators and service providers,” he said.

For example, if a tour agent hires a coaster bus from a well-established travel agent in Thimphu, they pay the charges until it reaches its destination, excluding the charges for dropping off tourists.

“It is expensive for us to hire a vehicle from Thimphu, but we manage from here,” said a tour operator, adding that there is no other option.

Taxi drivers, too, are unable to upgrade their vehicles.

Ngawang Sherub, a 28-year-old driver, shared, “I wanted to purchase an electric vehicle, but financing options are either unavailable or come with prohibitive conditions.”

Lobzang, another taxi driver, said that even when loans are provided, they cover only a fraction of the costs. “Banks cover just 30 percent of the loan for an electric vehicle, leaving us to manage the remaining 70 percent ourselves. The government needs to offer better financial schemes to help us compete.”

Compounding the challenges are logistical bottlenecks at the Integrated Check Post (ICP). Lengthy verification process and traffic congestion discourage regional tourists.

“Due to traffic jams at the ICP gate and the lengthy process, half the day is wasted at the gate. Most regional tourists turn back because of the delays,” said Kuenzang Leki, a tour operator.

Many said that upgrading the ICP with a pedestrian terminal, a customs clearance office, and better parking facilities would help ease this issue.

Stakeholders also point to inadequate infrastructure along the Trashigang-Samdrupjongkhar highway, including the lack of rest rooms, as barriers to growth.  Currently, there is only one tourist standard toilet along the Trashigang-Samdrupjongkhar highway.

“The Department of Tourism needs to build rest rooms, viewpoints, and other basic amenities to enhance tourist experience along the route,” said a tour guide, Sangay Dorji.

Despite the challenges, there is optimism about the potential of Samdrupjongkhar as a tourist destination.

As of December last year, 41 international tourists and 113 regional tourists entered Samdrupjongkhar, after the opening of the entry and exit point in Darranga, Assam. But stakeholders stress the need for government intervention to sustain this growth.

“The tourism value chain is interconnected. If small players like hoteliers, travel agents, and taxi drivers fail, the entire sector suffers,” said a tourism expert.

Local travel agents, including those preparing for the Rhododendron Festival in Trashigang, are concerned about logistics.

“The future of Samdrupjongkhar’s tourism industry depends not only on the arrival of tourists but also on the ability of its service providers to meet their expectations,” said a guide. “Inclusive policies and targeted interventions are key to unlocking the region’s potential.”