Tourism has been an important industry and the country's largest foreign-exchange earner since its inception in 1974. Most tourists visit cultural sites--particularly dzong and temples--and observe seasonal festivals featuring masked dances and archery contests (archery is the national sport of Bhutan) or go on trekking expeditions on foot or mounted on horses or yaks. Limited to land travelers from India until Druk-Air's international service became operational in 1983, tourism was closely controlled by the state-run tourism agency, the Bhutan Tourism Corporation. Tourism reaped increasing foreign exchange in its first decade, ranging from US$300,000 from 390 visitors in 1976 to US$1.4 million from 1,325 visitors in 1982. By 1984 some 2,000 tourists visited Bhutan annually. By 1987 revenues had risen to more than US$2 million earned from the 2,524 tourists who visited the country that year. The government then decided to limit the number of tourists to around 2,000 a year and restricted access seasonally and to certain historical, cultural, and scenic sites. These restrictions resulted in decreases to 2,199 tourists and to revenues of US$1.9 million in 1988. In 1991, however, the Ministry of Trade, Industry, and Tourism announced plans to gradually double the number of entry visas granted and to reduce the charges levied on tour operators. The changes provided for the privatization of the Bhutan Tourism Corporation. In addition, whereas only group tours were allowed before 1991, after that date individual tourists were franted visas for prearranged tours. Visited from 1987 to 1990 by only a few travelers, many of Bhutan's religious sites were becoming more accessible to tourists in 1991. However, a substantial per person tariff, ranging from US$80 to US$200 per day depending on the time of year and type of package visit, was kept and helped boost revenues.

Opened to increasing tourism, Bhutan planned to turn over its government-run hotels to private management to improve its lodging accommodations. The largest number of tourists from a single nation, nearly 600 in 1988, came from the United States, and tourists from West Germany and Japan were close behind in numbers.

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Source: U.S. Library of Congress