Bhutan is fast emerging as a popular destination in a world hungry for new and exotic locales, but the growth of the country’s tourism sector threatens to undermine the culture for which the kingdom is famous.

Best known for measuring national development with its Gross National Happiness Index, Bhutan now wants the tourism sector to play a larger role in national development. Over the past four decades tourism has followed a policy of “high value, low volume” visitors. The government sets a daily all-encompassing US$250 tariff for each traveller, which is intended to limit the number of travelers but still attract significant foreign exchange.

“The government is taking a very good initiative to promote tourism in a way that we don’t want a lot of people in one go,” explained Tshering Tobgay, who owns a resort in the popular tourist destination of Paro.

Tobgay says the policy has avoided the excesses of mass tourism.

“This is a small country, we don’t [want] a lot of tourism to come in and spoil our culture and heritage likewise [sic] in other countries,” he says.

In 1974 Bhutan opened its doors for the first time to the outside world, welcoming fewer than 300 visitors to the isolated kingdom. Tourism today contributes more than US$2 million in annual revenue and the government hopes to boost arrivals to 100,000 by 2013.

“Tourism occupies one of the key priorities and attention of the government because of its potential to contribute toward a more equitable socio-economic development in terms of alleviation of poverty issues and employment generation,” said Kesang Wangdi, director general of Bhutan’s Tourism Council.

Although Bhutan’s GDP is among the highest in South Asia, one-third of the population is poor. Wangdi says that tourism can support local community development by improving the lives of everyday people such as taxi drivers and horse owners. But the strategy has also raised concerns. The tourism industry brings in is the second-highest foreign exchange earnings to hydro electricity sales to India.

“With the exception of hydropower we don’t have any other viable industry. So tourism is getting a lot of attention, but we also have to be careful that too much expectation is not put on tourism to solve all the issues,” says Thuji Dorji Nadik, also from the tourism council.

Bhutan’s latest tourist marketing slogan is “happiness is a place.” The capital Thimphu and western city of Paro are the most important centers for tourism, with a sacred Buddhist monastery overlooking the Paro valley a must-see destination.

“There is almost a ‘Bhutan myth’ that is as much perception as it is reality,” says Rick Antonson, president of Tourism Vancouver.

“A significant challenge for Bhutan will be the pressure from mainstream tourism investors and developers [who] would willing be mere profiteers from the Bhutan image and in the course of five years could tarnish the reputation,” he says.

With tourism demand increasing, the national carrier DrukAir recently purchased an additional aircraft, adding to a fleet of six. The airline has also launched domestic services, but additional infrastructure will be needed to meet rising demand, says resort manager Julie Beattie.

“There’s a lot of infrastructure that needs to be built to support 100,000 people coming in. You’ve got to look at that from airport facilities, then hotels,” she says, adding that infrastructure must be spread out evenly across the country.

Already worrying signs are emerging of tourism’s intrusion into Bhutan’s pristine environment, which has 72 percent under forest cover.

“Many tourists told us that if we don’t take care of the trash on the trekking routes or the waste in the cities they won’t spend $250 a day to see this rubbish,” say Bhutan’s Economics Minister Lyonpo Khandu Wangchuk. “So our tourism industry is to be now totally dependent on how we manage and how we do the things correctly.”.

Looking over the snow-capped mountains of Che Li La Pass, Bhutan Tourism Council guide Phuntsho Gyeltshen, says that preserving Bhutan’s culture is vital to the industry’s future.

“When people hear about Bhutan they relate to high mountains, the culture and the tradition. Bhutan is still one of those places we probably dream of or wish to see at some point in our lives,” he says as Buddhist prayer flags flutter violently beside him. “We must preserve it.”

(This article was first broadcast on Asia Calling, a regional current affairs radio program produced by Indonesia’s independent radio news agency. Visit www.asiacalling.org.)