Since the initiation of tourism in 1974, the Royal Government of Bhutan has pursued a cautious and visionary approach to the development of the country's tourism industry. Bhutan's steadfast tourism policy of 'High Value, Low Impact' has been instrumental in preserving its rich cultural heritage over the years. Sustainability has been the cornerstone of Bhutan's tourism industry, emphasizing environmentally-friendly practices, social and cultural acceptance, and economic viability.

In response to the Covid-19 pandemic, Bhutan reopened its borders to international visitors on September 23, 2022, with a redefined tourism strategy focusing on sustainable development policies, infrastructure enhancements, and an enhanced guest experience.

As part of this strategy, effective from June 20, 2022, Bhutan abolished the Minimum Daily Package Rate (MDPR) and raised the Sustainable Development Fee (SDF) from US$ 65 to US$200 per person per night which from June' 2023 got revised to US$ 100 per person per night . The SDF, collected by the national exchequer, supports Bhutan's development by funding various projects aimed at improving facilities, services, and infrastructure for both Bhutanese nationals and visitors.

The SDF is currently US$ 100 per person per night for all visitors except those from India, who presently pay INR 1200 per person per night. Children aged 6 to 12 receive a 50% discount, while those aged 5 and under are exempted. The SDF is payable for the duration of the traveler's stay in Bhutan.

The funds raised through the SDF are utilized for projects that promote Bhutan's economic, social, environmental, and cultural development. These include initiatives such as preserving cultural traditions, enhancing sustainability, upgrading infrastructure, and providing free healthcare and education. Bhutan, being vulnerable to climate change, also focuses on maintaining its status as one of the few carbon-negative countries in the world.

FOLLOWING CATEGORY OF TRAVELLERS ARE EXEMPTED FROM PAYMENT OF SUSTAINABLE DVELOPMENT FEE:

The government has approved the exemption of daily sustainable development fee (SDF) for foreigners visiting Bhutan under following categories other than tourists:

1.    SDF is waived for pilgrims to Gomkora, Hindu pilgrims to Jayanti Mahakal temple, near Phuentsholing, only if the pilgrims stay within Trashi Yangtse and the pilgrimage site for the duration of the festival.
2.    Nationals of Thailand and Switzerland with diplomatic and official passports exempted from the SDF only if the purpose of the visit is for official business. If the purpose of the visit is tourism, then SDF is imposed and can be collected at the port of entry or paid in advance.
3.    SDF is waived only if the purpose of the visit is official for nationals of member states of SAARC entitled to SAARC visa exemption scheme. If the purpose of the visit is tourism, then SDF is imposed and collected at the port of entry or paid in advance. 
4.    Foreign workers approved by labour and immigration, foreigners married to Bhutanese and their legitimate children, and foreign students including monks and nuns undertaking a regular study program need not to pay the SDF. 
5.    Direct dependents of promoters, investors of established FDI in the country, diplomats, officials of resident missions, embassies or consulates and their dependents and officials of international organisations based in Bhutan and their direct dependents can also avail SDF exemption.  
6.    The list also includes uniformed personnel of IMTRAT and DANTAK posted to Bhutan and their direct dependents, expatriate traders holding a valid business license and trader card and their direct dependents and day workers and process workers in the factories and industries in the border towns.
7.    Promoters and investors of FDI waived off from SDF for established FDI companies in the country, however, no waiver given during feasibility visits.
8.    Casual visitors in the border towns, SDF to be waived for visitors (nationals of India) to border towns provided they do not halt the night or travel beyond the first designated point.
9.    SDF waived for parents and adult children of diplomats and professionals working in Bhutan.
10.    SDF waived to journalists and media personnel only if invited by the government to cover events of national significance or importance, accompanying the head of State or government of a country on an official visit to Bhutan and must be endorsed by the foreign secretary.  
11.    Official guests of the government, civil society, religious organisations (including devotees and pilgrims coming for religious events), and corporations, the cost of SDF should be borne by the host agency. 
12.    Individual volunteers and interns are not permitted entry as per immigration rules and regulations. However, volunteers of international organisations such as TICA, JICA, Australian Volunteers (AVID), HVO based in Bhutan are permitted entry either as foreign workers or as officials of international organisations based in Bhutan. 
13.    SDF waived for sports professionals taking part in sporting events, on contract with licensed clubs and trainers. However, it should be recommended by Bhutan Olympic Committee, and fulfil other requirements. 
14. In order to promote MICE (Meetings, Incentives, confeences and Exhibitions) tourism in Bhutan, SDF waiver is introduced for MICE participants. Notably, SDF waiver is provided by Department of Tourism based on following conditions:
- The minimum group size to qualify as a MICE event is 7 participants.
- A maximum of 4 nights SDF waiver can be granted to all participant as per event and this does not include the travel dates to the venues, including the arrival and departure dates.
- The SDF waiver is only eligible to the partipants who attend the MICE event and the SDF waiver can not be extended to spouse or family members.
- The MICE event can happen any time of the year and there are no blackout dates.
- Only certain events that fall within the category of Meetings, Incentives, Conferences and Exhibitions will be eligible for SDF waiver. 
- A summary of the event, including the outcomes and photographs, must be submitted by the applicant to the Department of Tourism within one month of the departure date of the guests.