COVID-19 delivers a body blow to Pacific tourism

The Asian Development Bank expects tourism-based economies in the Pacific to drop by 0.3 per cent this year. Picture: GUARDIAN PACIFIC/blogs.griffith.edu.au

By SHELDON CHANEL, Guardian Pacific

The Pacific’s $4.2 billion tourism industry has been brought to its knees by COVID-19, with no certain signs of a proper recovery for at least two years.

Tourism receipts from air travel alone totalled US$4.2b in 2019, an increase from US$4b in 2018.

The economic fallout from the decline is expected to be severe in a region prone to natural disasters, and high levels of poverty and unemployment.

National airlines in Fiji, Kiribati, Samoa, Solomon Islands and Vanuatu have grounded all commercial services, with special arrangements being made for evacuation and freight flights only.

The Pacific Asia Travel Association is bracing for a major drop in international visitor arrivals to the Asia-Pacific region by as much as 32 per cent in 2020. The Asian Development Bank expects tourism-based economies in the Pacific to contract by 0.3 per cent in 2020.

Hotels and resorts have closed in bigger tourism markets such as Cook Islands, Fiji, Palau, Tahiti and Vanuatu with their governments moving quickly to close borders in attempts to prevent COVID-19 entering their countries.

Emerging tourism markets such as Kiribati, Solomon Islands and Tonga are also closed to mass arrivals.

Across much of the region, tourism is a key driver of economic growth and a major source of employment and government revenue.

Because of their remote locations, significant barriers to trade and a high reliance on aid, tourism is seen as a saving grace by many countries. The region welcomed more than 2.1 million international visitor arrivals in 2019, an increase of 6.6 per cent from the previous year.

Countries like Fiji and Vanuatu, which earned roughly $44.2 million and $34m in economic benefits respectively from the industry in 2019, stand to lose out. This includes the promising cruise industry, which has also ground to a halt.

Some observers believe it could take at least two years for the industry to get back on its feet again. Others remain uncertain given that recovery will largely depend on people’s appetite and confidence to travel once more. According to the Asian Development Bank, Cook Islands, Fiji, Palau, Samoa and Vanuatu will experience negative or no economic growth this year as a result of a decline in tourism numbers.

The International Labour Organisation (ILO) predicts that thousands of tourism workers in the region are facing poverty as a result of losses from low visitor arrivals.

In Fiji, nearly 300 hotels and resorts have shut down or been converted into quarantine sites, with over 40,000 tourism workers either laid off or sent on leave without pay.

The chief executive officer of the Fiji Hotel and Tourism Association, Fantasha Lockington, has described the situation as ‘extremely devastating.’ Tourism contributes about $FJ2 billion (AU$1.3 billion) to Fiji’s national Gross Domestic Product, nearly 40 per cent, and directly and indirectly employs roughly 150,000 people across many industries. Some international names that operate in Fiji include the Sheraton Resort, Marriott International, Hilton Fiji Resort and the Jean-Michel Cousteau Resort.

Visitor arrivals have also sharply declined in Vanuatu, where tourism makes up nearly 40 per cent of GDP and more than 50 per cent of total exports. Vanuatu is one of the few countries in the world yet to record a single case of the coronavirus.

Palau, Solomon Islands, Tonga and Samoa also remain COVID-19 free. But border closures and travel restrictions around the world and within Vanuatu has seen visitor arrivals plummet to zero, impacting thousands of tourism-dependent livelihoods in the country.

Tropical Cyclone Harold, a category five storm that battered Vanuatu on April 6, was a further blow for tourism there. The ADB provided a $1m grant in support of relief efforts to the Vanuatu government, which had just recently announced a $32m economic stimulus budget in response to COVID-19.

In Samoa, more than 4000 tourism workers have reportedly lost their jobs after the country closed its borders to foreign nationals on March 20. The ILO believes the Pacific’s tourism sector will need funding support from international agencies such as the World Bank and partner countries like Australia and New Zealand to cope with the longer term impacts of COVID-19.

Pacific governments have offered some support to businesses through economic stimulus packages and income support funding. But there are concerns of sustainability should the pandemic continue. Pacific countries do not have the fiscal capacity to maintain support over a prolonged period, particularly with falling tax revenue from tourism.

There is some effort to establish a pathway with Australia and New Zealand, the Pacific’s largest tourism source markets, to allow the region access to the so-called Trans-Tasman trade and travel ‘bubble’.

The bulk of the region’s visitors come from Australia, New Zealand and North America. There are some positive some signs that virus containment measures in Australia and New Zealand are working and international travel can resume soon.

Passenger travel is also increasing in China, the original epicenter of the virus and an emerging source market. While the short and medium-term outlook may look bleak, there is some hope that in the long-term the region will come out stronger from this unprecedented crisis.

*Click HERE for the original post.

*Former Fiji Sun deputy managing editor business and senior news journalist Sheldon Chanel is a freelance journalist based in Suva. Sheldon writes for the Guardian Pacific and is the consulting editor for The University of the South Pacific’s journalism student training newspaper, Wansolwara.