Report: Strengthening tourism demand
A NEW research report recommends strengthening tourism demand will see tourism operators gear up to meet higher demand.
ANZ’s Pacific Insight shows that Fiji is ideally placed to maximise its international tourism returns heading into its late June/July/August peak season.
ANZ’s international economists believe that building on 143,399 arrivals so far this year, Fiji can register its best peak season performance in terms of visitor arrivals and tourism export receipts on the back of a record number of Australians holidaying in Fiji this year.
In the report the economists however noted that the industry was facing competition for labour from the emerging Business Process & Outsourcing industry and employment opportunities overseas either through Australia’s
Pacific Labour Mobility Scheme or overseas employers directly recruiting staff from Fiji.
Dr Kishti Sen and Tom Kenny said the fact that some hospitality industry employees left the industry when tourism shut down which could result in rapid tightening of labour capacity, putting upward pressure on wages along the supply chain and possibly to inflation down the track.
However, the authors do note that all in all, Fiji has made a strong start to recover the spending lost during 2020 and 2021.
“We expect it to build on its international tourism-led recovery and claw back a big chunk of lost tourism demand this year.
“Private consumption is also looking solid underwritten by remittances and job growth.
“Businesses are becoming more confident about demand, revenue, profitability and are revisiting capex plans with a view to moving some large projects towards commencement later this year.
“If Fiji stays the course, it can return to 2019 levels of production this year.”
With Australia being Fiji’s main source of tourism the report noted that the proportion of holiday trips from there to Fiji rose from 4.5 per cent pre-COVID to 25.5 per cent in the first four months of 2022.
“Australians made 96,160 overseas holiday trips in April, which is only around 17.8 per cent of the pre-pandemic average of 539,550 for the month.
“As the number of trips returns to the long-run monthly average of 533,248 – possibly more given the huge pent-up demand for overseas holidays – the number of Australian’s holidaying in Fiji will rise.
“This is likely to more than offset the loss of tourists from markets that are still closed or facing strict travel conditions.
Fiji will lose some Australian market share as overseas markets open up, but we don’t expect Fiji’s share to fall back to preCOVID levels of 4.5 per cent in the upcoming peak season,” it said.
Fiji’s advantages over its competitors include:
very high vaccine coverage and an on-going COVID surveillance program;
over six months experience marketing to and servicing inbound demand since reopening its border;
competitive pricing, through discounting and tax cuts;
enhanced flight connectivity;
refurbished luxury international hotels and resorts; and
a reputation for natural beauty, warm hospitality, rich cultural experiences and friendly locals.
These advantages should help retain Australian traveller numbers and keep market share above pre-COVID levels for the near term.
Meanwhile, the report said holiday
makers from other key markets, in particular New Zealand, the US, Canada and the Pacific would add to the numbers, as all had eased international travel conditions.
“We forecast a total of 288,684 visitor arrivals in the June to August season, which is 6.6 per cent higher than the record 270,862 visitors in 2019. For calendar year 2022, we see 671,955 visitors – 75.1 per cent of 2019’s inbound demand.
“Industry liaison suggests tourists are staying longer per trip, so tourism yields (spending per trip) are also likely to be up relative to 2019 although discounting will provide a partial offset.
“The tourism services export upswing, coupled with higher employment driving consumption expenditure and green shoots in private investment, supports our projection of Fiji returning to its pre-pandemic level of GDP this year.”