Continued recovery in Fiji’s tourism sector boosted the country’s overall economic growth last year, according to the Asian Development Bank.
In its annual Asian Development Outlook report released this month, the Bank said Fiji’s gross Domestic Product (GDP) grew by 7.8 percent on the back of the strong growth in tourism.
“Services, buoyed by a boost in tourist arrivals, continued as the main driver of economic activity, adding 6.9 percentage points. This had positive spill-over effects on wholesale and retail trade, said the report.
Visitor arrivals in 2023 exceeded pre-pandemic levels. Total arrivals were four percent higher than in 2019.
In 2023, Fiji recorded close to a million visitors (929,740) with the majority of the travellers arriving from Australia, New Zealand and North America.
Tourism Fiji said most visitors – almost 80 percent were holiday-goers, with eight percent visiting friends or relatives, and four percent travelling for business and conferences.
During the peak tourism season from June to September, major hotel occupancy rates were between 84 and 87 percent.
A policy challenge however for the government is the limited tourist accommodation that might slow sustainable economic growth, cautioned the multilateral development bank.
Currently, there are 13,000 hotel rooms available from 421 licensed accommodation providers.
“There is also a growing number of unlicensed short-term accommodation providers on platforms such as Airbnb. The government should act to sustain tourism growth and keep hotel pricing competitive, said the ADB Outlook report.
It suggested three ways the government can help the tourism sector maintain sustainable growth.
“It needs to ease impediments to domestic and foreign tourism investment, improve tourist infrastructure, particularly in outer islands and consider alternative forms of tourism.
The Fijian Government also needs to act quickly to attract more investment in tourism.
“Potential investors, particularly foreign investors, likely see the government’s complex foreign investment procedures as a barrier to investment in tourism. The government should accelerate efforts to streamline and expedite investment processes while simultaneously prioritising environmental protection and promoting sustainable tourism.”
Stakeholders see delays in finalising and obtaining approval for an Environmental Impact Assessment as a critical obstacle to realising investments.
To address this, the government has established an inter-ministerial body to help streamline investment-related processes.
Fiji can also work on spreading tourism activity and benefits to more areas.
“Currently, 75 percent of hotel rooms are concentrated in the Coral Coast and Nadi corridor on the country’s largest island, Viti Levu. Fiji could spread tourism benefits by improving transportation connections to outer islands like Vanua Levu, Fiji’s second-largest island, said the report.
The government, with support from development partners, is upgrading airports in Savusavu and Labasa, the two primary tourism hubs on Vanua Levu. In addition, there is an ongoing feasibility study for constructing a new airport capable of accommodating larger aircraft.
While sea transportation remains viable, the initial focus should be on enhancing key connecting jetties to Vanua Levu. Other potential areas such as Taveuni and Sun Coast could also benefit from increased marketing, contributing to a more widespread distribution of tourism benefits.
Spreading tourists out to more areas may help relieve the strain on hotel room availability and hotel prices around Viti Levu, the report suggested.
The government can further explore alternative forms of tourism such as sports, retirement and medical tourism.
In 2022, a Fiji rugby team joined the Super Rugby Pacific competition, which includes teams from Australia and New Zealand. It is estimated that the six games Fiji hosted during the following season resulted in 40,328 nights of overseas visitor stays that would not have happened otherwise.
“The positive effects of these events can be effectively utilised during Fiji’s tourism offseason.”
Fiji also has the potential to attract medical tourists from neighbouring Pacific countries who travel as far as Asia for medical treatment.
“For this to happen, Fiji requires additional privately operated hospitals to enhance its healthcare infrastructure.”
A study by the International Finance Corporation indicates opportunities for private sector investment in advanced diagnostic facilities and specialist care hospitals. Fiji can build on its two recent public-private partnerships for its Lautoka and Ba hospitals.
