The Royal Government of Bhutan recognizes that tourism is a world-wide phenomenon and an important means of achieving socioeconomic development particularly for developing countries like Bhutan. It also recognizes that tourism, in affording the opportunity to travel, can help in promoting understanding among peoples and building closer ties of friendship based on appreciation and respect for different cultures and lifestyles.

There are, however, problems associated with tourism which, if not controlled, can have devastating and irreversible impact on the local environment, culture and identity of the people. Realizing these problems and the fact that the resources on which tourism is based are limited, the tourism industry in Bhutan is founded on the principle of sustainability, meaning that tourism must be environmentally and ecologically friendly, socially and culturally acceptable and economically viable. The number of tourists visiting Bhutan is regulated to a manageable level because of the lack of infrastructure.

Towards achieving this objective, the Royal Government, since inception of tourism in the year 1974, has adopted a very cautious approach to growth and development of the tourism industry in Bhutan. In order to minimize the problems, the number of tourists has been maintained at a manageable level and this control on number is exercised through a policy of government regulated tourist tariff and a set of administrative requirements explained in the following Sections.

Tourism in Bhutan was privatized by the Royal Government of Bhutan in 1991. Today it is a vibrant business with 33 private operators at the helm of affairs. The Royal Government of Bhutan adheres strongly to a policy of low volume, high value tourism.