Vanuatu_PDNA_Web

32 Tropical Cyclone Pam, March 2015
The total estimated cost of recovery needs is around VT 1.7 billion, of which 1.2 billion is reconstruction
costs for the next 24 months (Table 17 and Table 18). 24
Short-term recovery needs for the tourism sector
As part of the effort to rebuild the private sector, reconstruction will need to rely on a combination
of subsidized loans, commercial finance, insurance, grants, private savings, and exemptions.
The disaster received widespread coverage in Vanuatu’s core markets of Australia, New Zealand,
and New Caledonia. A significant new marketing push, to give tourists the signal they can return
to Vanuatu for holiday, is critical to getting tourism back on its feet. The marketing budget should
increase from its current level of VT 159 million per year—one of the lowest levels of tourism
marketing seen among Pacific countries—to VT 318 million per year in 2015/16. 25 This increase in
marketing allocation is critical to the recovery and will closely complement the reconstruction effort
for businesses. It is important to note that without new influxes of tourists, many Vanuatu tourism
businesses will not survive the coming 12- to 18-month period—even if they rebuild and reconstruct.
In addition, the sector requests funding to conduct a professional feasibility study of how to establish
insurance for microbusinesses. Suitable insurance will improve the ability of smaller businesses to
cope with risk from natural disasters in future.
Table 17. Short-Term
Needs for the Tourism
Sector
Program of Activity Value (VT 1,000) Responsible Agency
Reconstructions costs (partly to be financed by low-cost line of
credit and partly by the private sector)
1,226,110
Private sector, RBV,
commercial banks
Marketing activity 318,000 a Vanuatu Tourism Office
Feasibility study on the establishment of a natural disaster
microinsurance market and technical assistance for
implementation
Total 1,579,110
35,000 b MTTCNVB, RBV
a. Tripling of the marketing budget for the next 12 months requires an additional VT 318 million.
b. This item is proposed jointly under the commerce and industry sector and the tourism sector. An additional estimate for the
needs for the commerce and industry sector are presented in Chapter 3.1.2.
Medium- to long-term recovery needs for the tourism sector
Over the longer term (between 12 and 24 months), the marketing budget should be doubled for a
further commitment of VT 159 million (on top of the existing budget). This is to ensure the credibility
and sustainability of the initiatives implemented in the first year.
24
The calculation multiplies damage by a factor of 1.35 to simulate the costs associated with the BBB principle.
Accordingly, the estimated reconstruction cost is VT 1.2 billion. It also discounts the VT 5 billion for the major
hotels’ damage, as this will be covered by insurance providers.
25
This figure takes into account the loss of revenue from the Tourism Development Marketing Fund in the coming
months. The Vanuatu Tourism Office operating budget is VT 159 million, of which VT 123 million is for campaigns
(38 million Tourism Development Marketing Fund and 85 million budgetary funds).