In 2040, transformational tourism opportunities could bring an additional US$1.89 billion in revenue and 127,600 jobs to Pacific Island Countries Opportunity → → Additional Impact 755,000 tourists 69,200 jobs Increasing the Chinese Market US$989m receipts $42.3m airport taxes Home-basing 4 Cruise Ships 133,000 tourists US$65m receipts 4,500 jobs $9.2m port fees Expanding the High-end Resorts Market 138,000 tourists US$449m receipts 31,500 jobs $7.7m airport taxes Capturing the Retiree Market 10,000 retirees US$320m receipts 22,400 jobs $0.56m airport taxes
<strong>Tourism</strong> in 2040: Bringing an additional one million visitors per year to paradise Executive Summary 1. <strong>Tourism</strong> offers Papua New Guinea (PNG), Solomon Islands, Vanuatu, Fiji, Tonga, Samoa, Kiribati, Palau, Marshall Islands (RMI), Federated States of Micronesia (FSM) and Tuvalu, hereafter referred to as the PIC11, significant opportunities for economic growth and shared prosperity. These opportunities derive from the comparative advantage of their resource endowments suited to tourism: pristine natural environments and cultural diversity. While pristine natural environments are not the exclusive domains of PIC11, competing island destinations in the Indian Ocean and the Caribbean also have them, the PIC11’s unique and diverse cultural heritages are what differentiates them in the global market. Further, tourism presents the chance to preserve the environment and cultural heritage through sustainable development practices. <strong>Tourism</strong> represents a unique opportunity because it is less subject to—and can actually benefit from—factors that are barriers to other forms of economic growth: small and dispersed populations, small land areas, remoteness from markets, and limited natural resources (UNWTO 2012). 2. The PIC11 received 1.37 million overnight visitor arrivals in 2014, a record number. The five most popular destinations in order of visitor arrivals were Fiji, PNG, Palau, Samoa and Vanuatu. Fiji received 100,000 more than the other 10 countries combined. Two thirds of the market for the PIC11 is visitors from Australia and New Zealand. The United States, China, Japan and Europe are relatively small but still very important markets as they have the potential to generate much more growth in arrivals given the size of their populations. 3. <strong>Tourism</strong> already plays an important role in the economies of Palau, Fiji, Samoa and Vanuatu. <strong>Tourism</strong> is an important source of export earnings for many PICs. In Samoa and Vanuatu, tourism generates the majority of export earnings. In Tonga it is the largest single source, about five times as that of agriculture and fisheries combined. For Fiji it has replaced sugar as the primary export earner. <strong>Tourism</strong> is also a tax base, which generates revenue from targeted taxes, like Fiji’s service turnover tax on hotels and restaurants. Targeted taxes also give governments another means to influence visitor arrivals numbers by affecting prices, like Palau’s efforts to limit arrivals via increased departure and hotel taxes. <strong>Tourism</strong> is a significant employer in those PIC11 where tourism is a major industry. South Pacific <strong>Tourism</strong> Organization (SPTO) estimates indicate the highest levels of employment in Tonga, 15 percent, Samoa, 18 percent, and Palau, 50 percent. 4. Compared to global average annual growth of 3.9 percent from 2005 to 2014, PIC11 visitor arrivals have grown by 4.5 percent. While long-term growth is positive for PIC11s, performance varies between countries and short-term decreases have resulted from political instabilities, natural disasters and global market conditions. The average annual growth rate for the five top destinations from 1995 to 2014 was 5.5 percent, while the other six only averaged 2.5 percent. i
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