Tourism earnings in the South Pacific grew strongly in the first half of the decade—increasing from US$1 billion in 2000 to US$1.5 billion in 2004, a study by Auckland University of Technology has found.
And if this trend continues, south-pacific.travel (formerly South Pacific Tourism Organisation) believes a target of US$2 billion per annum could be set for the end of the decade.
“These figures would make tourism the largest and fastest export growing sector in the region,” the organisation said.
This performance has been driven by a number of factors. Globally, tourism is a high growth industry.
“As incomes rise, people spend more on pent-up demand for travel. The South Pacific brand and individual country brands have strong appeal as exotic, pristine places to visit.
“The region has also benefitted from the strong economic performance and currencies (until recently) of its two largest and closest markets—Australia and New Zealand.
“Their combined share of our visitor mix has grown strongly from 40% at the beginning of the decade to 50% now.”
south-pacific.travel says whilst a decade ago tourism in the region was dominated by Fiji and the two French territories, French Polynesia and New Caledonia, it is now truly widespread in its economic impact.
Infact, it has become a very significant economic contributor in destinations like Samoa, Cook Islands, and Vanuatu. Other destinations also are developing niche opportunities from smaller bases.
However, with the downturn which began in August 2007, New Zealand was one of the first developed countries to officially enter into a recession early in 2008.
“Most others subsequently followed suit. History may show the last quarter of 2008 to have been the depths of this global economic slowdown with iconic failures like the Lehmann Brothers.”
“2008 was the worst oil shock ever experienced with the black stuff peaking at three times its recent average. Many forecast the end of tourism as we know it.
“However, despite all this, visitors to the South Pacific continued to grow—3% growth in 2008.
“This sustainable level of visitor growth at about 3-4% per annum is higher than the overall rate of economic growth in the region, suggesting that tourism is driving overall development,” south-pacific.travel said.
“Of course trends in visitor numbers may not necessarily translate exactly into value.
“Regrettably, the lack of developed satellite tourism accounting in the region means that timely figures on tourism value are unavailable.”
The organisation said North Pacific US states and territories of Hawaii, Guam and Saipan are really struggling.
“In 2008, they collectively experienced double-digit percentage declines. Even Australia and New Zealand experienced declines in inbound visitors of about 2% in 2008.
“In this context, the steady annual 3-4% growth for the region is an impressive result.”
The organisation predicts that 2009 will be different.
“Australia expects a 5% decline in inbound visitors this year, and New Zealand a 10% decline.
“South Pacific islands would be wise to brace for a similar total result in the vicinity of a 5-10% decline.
“However, this will not be even across the region. The two largest destinations, Fiji and Tahiti, are experiencing challenging market conditions.
“Tahiti is largely reliant on the Northern Hemisphere markets of North America, Europe, and Japan and these have been the hardest hit by the downturn.
“Fiji suffered from the January floods and other factors and is now setting 2007’s actual arrivals as benchmark for this year.”
But things are looking up for Vanuatu, Samoa, and Cook Island— all showed good growth for the first half the year at least.
Samoa has set a goal of 7% growth in visitors for 2009 and is on track for that at the moment, although accommodation renovations and other non-tourism demands on accommodation may be a temporary brake.
Cook Islands, on the other hand, is enjoying the South Pacific Games benefit and core tourism demand is also strong.
“Other destinations may also yet put in a positive performance for 2009 when more data is available.
“Declining air capacity from the Northern Hemisphere will accentuate reduced performance from most of these markets.
“Tourism is a big industry and market segments are not homogenous. There is currently much discussion about which segments are more recession resilient than others.
“Common wisdom is that demographics either side of the 30-50 year-old family market may do better.
“Backpackers don’t generally yet have mortgages and stock portfolios to worry about and are less phased by economic fluctuations.
“At the other end of the age spectrum retirees are largely freehold therefore perhaps also more resilient.
“The largest cruise operator to the region for example, Australia’s P&O, has reported some record booking results in 2009.
“Other special interest markets of diving, fishing, surfing, bird-watching etc may also be more resilient than the main-stream family market.”
The organisation says the Pacific has been there before (recession) and has bounced back and this time, “We’re likely to do it again.”