PUNAKHA, Bhutan - In the inner sanctum of the ancient white-walled fortress, dozens of red-robed monks prayed by the light of butter lamps, as the incense swirled. A handful of Western tourists self-consciously shuffled in.

With a deep throaty mumble, the older monks recited the ancient Buddhist scriptures laid out before them on the wooden floorboards, interrupted only by a blast on long trumpets and the rhythmic beat of ornately decorated drums.

The Himalayan kingdom of Bhutan sells itself as a 'high value, low volume' tourist destination, consciously excluding the backpackers who roam neighbouring India by insisting visitors spend at least US$200 (S$306) per person per day in the peak season.

And yet, word is spreading, and what was once an exclusive retreat for the well-heeled is steadily joining the tourist circuit. Hollywood stars like Uma Thurman and Cameron Diaz are reported to frequent Bhutan's boutique hotels but it is groups of elderly Americans whom most visitors are likely to encounter.

Bhutan is in danger of becoming a victim of its own success.

UNSPOILT BEAUTY: The green fields in the town of Paro (above).

'We should put the brakes on a little,' said Mr Thuji Dorji Nadik, joint director in the Department of Tourism. 'Every destination has its USP (unique selling point) and for us exclusivity plays a large role.'

Sandwiched between India and Tibet, Bhutan is billed in tourist brochures as the 'Last Shangri-La', the mystical paradise of James Hilton's book The Lost Horizon.

At times, it lives up to the description, conjuring up a mediaeval world of Buddhism mixed with ancient animism, a culture deeply linked to that of Tibet, yet one which avoided the heavy hand of China or the tempting touch of the West.

Men still dress for work in knee-length gowns with huge white cuffs, and four-fifths of the population are farmers.

Change on the horizon

But Bhutan is slowly modernising and opening up to the outside world. The first car arrived in 1961, television was finally allowed in 1999 and Shakira is now played in the discos of the capital Thimpu. More dramatic changes are on the horizon as the country plans for its first democratic elections next year.

In Punakha, the fortress stands guard.

Last year, more than 17,000 tourists made it to the Land of the Thunder Dragon, or Druk Yul, as the Bhutanese call their state, a 27 per cent jump over the previous year and nearly three times as many as in 2003.

Nor does that include 30,000 to 40,000 Indians who are allowed to visit without visas or paying the statutory charge.

These days, the price does not put off as many people as it did in 1974 - when it was started and visitors were first allowed into the country - especially since hotels, food, transport and a guide are included.

Most tourists head for the monasteries and awesome fortresses or dzongs, which dominate every district and host the exotic religious festivals, or tsechus, swirling dances which last several days at a time in spring and autumn.

Other tourists, the hardier lot, trek into the high Himalayas, some walking for days for views of 7,314m Mount Chomolhari.

Bhutan is off-limits to mountaineers - its people believe the peaks are abodes of the gods - and boasts the world's highest unclimbed mountain, the 7,570m Gangkar Puensum.

But it does offer what is often said to be the world's most arduous trek, the 23-day Snowman Trek, most of which is above 4,000m. Many people are unable to complete it.

Bhutan says it learnt many lessons from the way Nepal threw open its doors to tourists in the 1950s and the problems which followed.

Environmental protection is strong there - 72 per cent of the country is still forested. But litter and erosion are beginning to spoil the trails.

In the valley, a farmer carries a supply of firewood .

A group of four tourists on a typical luxury trek can be accompanied by up to a dozen horses, carting dining tables, chairs and tents up the mountains.

'We tried to impose a 'limits to luxury' principle, but in practice, that is not really being done,' said Mr Nadik. 'Tour operators feel it's in their interests to provide as much luxury as they can.'

Yet 59-year-old John Witorz and two friends from Melbourne had no complaints after two short treks.

'I have been just about everywhere in the world and this has to be one of the best,' said the white-bearded Australian. 'It is quite a high price compared to other Third World countries but it was worth every cent.'

But Mr Witorz, like most visitors, was unimpressed with Thimpu, a sprawling city where garbage disposal is a growing problem and aggressive stray dogs prowl the streets.

The emphasis on festivals and trekking creates another problem - tourism is strongly seasonal, with more than 80 per cent of arrivals from March to May and September to November.

Most hotels are mediocre by international standards and the buffet food is hard to stomach, many tourists said.

Poor-quality food ranked as the top complaint of foreign visitors in a Department of Tourism survey, but most were very satisfied with their visit.

'The people were so friendly and our guide was superb,' said 63-year-old Jo Eschenbacher from St Paul, Minnesota. 'It is still sort of unspoilt.'

How the country copes with the ever-growing demand will determine whether it stays that way.

Reuters

How to get there

COUNTRY Holidays has an eight day Bhutan Insight package from $4,590.

Explore the capital Thimpu by visiting places such as the national hospital and library, and catch a spectacular view of the Himalayas by driving up the mountains and over the 3,500m high Dochu-la pass. Call 6334-6120

Asia Travel has a five-day-four-night Bhutan Splendid package from $1,650.

Visit the Dupthong Lakhang, one of the few surviving nunneries left in the country, and learn the traditional techniques of painting and drawing. Explore Punakha, which is the old capital of Bhutan, and the present winter capital for Central Monastic monks as well. Call 6732-6773

Get a chance to visit Thimpu, the only capital city in the world with no traffic lights, on this eight-day-seven night Bhutan Cultural Exploration package tour from Fascinating Holidays.

See how the flood-destroyed dzong has been wonderfully restored by thousands of skilled craftsmen and builders over a period of 12 years.

Prices start from $4,398. Call 6735-5511

A visa is required to travel to Bhutan.