4. Development of the tourist market (1990-2004)
In this section we will discuss the development of tourism over the last 15 years, with the emphasis on the most recent changes. We will look at the volume and composition of the tourism market on the supply side (the tourism business) and the demand side (the tourists). Local market share. Starting with the supply side, the market was opened to private tour operators
in 1991, starting with 33 licensed tour operators. This number trebled to 94 in 2004 and then grew steadily to 1969 in 2004. In the search for customers Bhutanese tour operators depend entirely on the co-operation of foreign travel agencies in the developed world. A few large tour operators have constantly dominated the top four positions in terms of market share since 2000 as shown in Table 5.2. They include one private limited company, one locally-based international chain and two local operators. These were also among the first to enter the market in 1990 and, with the exception of International Tours and Treks, were founded by entrepreneurs who had already gained experience in the former state-owned Bhutan Tourism Corporation. Together they have controlled over 48.72% of the total market since 2000. However, their combined market share has been declining in the last three years (both in relative and in absolute terms), due to the entry of new competitors to the market, except 2004. The competition is expected to stiffen in the future when new international firms that have entered the market in collaboration with local tour operators start operating at full capacity.