Role of tourism in
TOURISM plays an important role in the global economy. According to the World Travel and Tourism Council (WTTC), global travel and tourism contributed 10.3 per cent to global gross domestic product (GDP), or around $US8.9 trillion ($F18.3 trillion) in 2019. The industry is estimated to have supported 330 million jobs which accounted for 10 per cent of total jobs worldwide.
Furthermore, the United Nations World Tourism Organization (UNWTO) recorded a total of 1.5 billion international tourist arrivals in 2019, and the main source markets were China, Germany, the United States (US), the United Kingdom (UK) and France. For our region, major sources markets include Australia, New Zealand (NZ), the US, China and continental Europe.
The tourism industry has been fundamental in Fiji’s economic development, which initially started as a port for refuelling ships and aircraft travelling between North America and Australia, and New Zealand. Over time, visitors started staying in Fiji for an extended holiday rather than just an overnight stop.
The Tourist Bureau was established in the early 1920s, while international flights commenced in the 1960s, which led to the development of the hotel industry around the country. In the 1980s, the industry surpassed sugar to become the country’s largest foreign exchange earner. In 2004, the number of visitors exceeded the half a million mark, and by 2010, tourism had become a billion-dollar industry.
Tourism is one of the largest drivers of growth in the Fijian economy. It is estimated to have contributed (directly and indirectly) around 34 per cent ($3828 million) to GDP in 2019, providing around 90,700 jobs that represented 26.3 per cent of total employment, according to the WTTC. Additionally, the RBF estimates that in 2019, the tourism industry contributed around $1 billion in government tax revenue – both directly and indirectly – and more than $2 billion in foreign exchange earnings.
Early last year, after the declaration of the COVID-19 pandemic, governments around the world implemented border closures and restrictions on international travel, which negatively impacted the industry, as global travel came to an almost complete halt. The majority of tourismdependent countries took a hit, and Fiji was no exception.
On March 6, 2021, Fiji received the first batch of vaccines from the COVAX1 (COVID-19 Vaccines Global Access, abbreviated as COVAX, is a global initiative aimed at equitable access to COVID-19 vaccines led by UNICEF, Gavi, the Vaccine Alliance, the World Health Organization, the Coalition for Epidemic Preparedness Innovations, and others) facility, a total of 12,000 doses. The majority of frontline workers spanning the health, border, hotel and other service-related personnel will be receiving the doses. However, various concerns surrounding the efficacy, likely side effects, and the emergence of different variants of the virus could impede the timely administration of the vaccine, further delaying the opening of borders.
The swift and safe administration of the vaccines and an adequately resourced public and private health system will play a huge role in the reopening of borders for international travel and support Fiji’s road to economic recovery.
In 2019, the aviation industry contributed around 3.6 per cent towards the worlds GDP – $US2.7 trillion ($F5.57 trillion). However, because of the significant decline in international travel, the industry has taken the biggest hit. Previous epidemics and crisis also caused a sharp decline in air travel demand but quickly bounced back. The International Air Transport Association (IATA) predicts the effects of COVID-19 will be more farreaching with a slower recovery rate.
Before the pandemic, Fiji Airways used to cater to around 80 per cent of total passenger movements, recording consecutive billion-dollar revenues in 2018 and 2019. In 2020, passenger movements declined drastically, revenues dipped while certain fixed costs remained. To combat cash flow constraints, the company took drastic measures by terminating employment contracts and renegotiating loan repayments.
As the pandemic crippled both local and international airlines across the world, governments provided financial support to the airline industry as part of economic stabilisation packages. Fiscal support provided to major global airlines is tabulated below.