Tourism in the South Pacific - A significant development potential

by John YACOUMIS

While economic growth and development in most South Pacific islands is hampered by dependence on a narrow economic base of agricultural commodities, limited geographical size and small populations and a lack of alternative natural resource wealth, the development of tourism would seem to offer an obvious and attractive economic development strategy. After all, the South Pacific islands possess significant natural and cultural attractions and an outstanding marine environment, in addition to their sun - drenched tropical ambience and exotic image. Yet South Pacific island governments have been hesitant in recognising the potential of the tourism sector and, with one or two exceptions, have been slow in achieving the economic benefits of tourism development.

Volume of tourism in the South Pacific

In global terms, the South Pacific island region receives an almost negligible proportion of international tourist arrivals. With an estimated 508 000 arrivals in 1989, the region’s share of international tourist arrivals was a mere 0.15 %. As can be seen from Table 1, the performance of the region has remained virtually static over the years. Thus, in 1986 a total of 615 000 arrivals were registered which amounted to 0.18% of world tourism arrivals.

In terms of individual market shares the South Pacific island region is dominated by Fiji and Tahiti, which together account for about two - thirds of international tourist arrivals. With 258 000 arrivals in 1986, Fiji accounted for 42% of all international arrivals, while Tahiti, with 161 000 arrivals, accounted for 26%. Their respective shares in 1989 are estimated at 40.3% and 22.5%.

Other island countries lag considerably behind Fiji and Tahiti, whose dominant position is underpinned by their role as gateways on the international airline route network and benefits from strong government support.

As can be seen from Table 2, the main source markets of tourist traffic to the South Pacific are Australia and New Zealand, which together accounted for 36% of all arrivals in 1988. North America’s share of tourist arrivals in the region had declined from close to 43 % in 1986 to just over 28 % in 1988, due to reduced airline services, particularly to Fiji. On the other hand, Europe’s share of the market increased from over 11 % in 1986 to over 16% in 1988. Current indicators also point to a resurgence of the Japanese market.

Table 1: Tourist arrivals in selected South Pacific island countries 1986 - 1989 (‘000)

Table 2: Tourist arrivals in TCSP countries by main market (‘000) .

Value of tourism in the South Pacific

In spite of its relatively small size, foreign tourism makes a significant contribution to the economy of individual island countries. Fiji’s tourism receipts in 1988 were US $ 188 m, or 53 % of its visible exports, making tourism the country’s second largest foreign exchange earner, after sugar. Tahiti’s 1988 tourism earnings of US $ 146 m were almost twice as much as its total exports. With an estimated US$ 8 m in tourism receipts in 1988, Tonga earned twice as much from the tourism sector as from its domestic exports.

A number of studies have assessed the economic significance of tourism in terms of the impact of tourist expenditure on income generation, government revenue, earnings, and employment creation.

For instance, the income multiplier of tourist expenditure in Vanuatu has been estimated at 0.56 and in Tonga at 0.42. In other words, every 100 dollars of tourist expenditure generates an income of $ 56 and $ 42 to the local economies of Vanuatu and Tonga respectively at direct and secondary levels.

The same studies also found that the government revenue multipliers are relatively high. For instance, in Kiribati this was estimated at 0.31, while in Tonga and Vanuatu they were 0.30 and 0.21 respectively. This means that every $100 of tourist expenditure in Kiribati, Tonga and Vanuatu generates $ 31, $ 30 and $ 21 respectively of government revenue.

Tourism’s impact on employment is also significant. Apart from the fact that the sector as a whole is relatively labour intensive, studies have concluded that considerable indirect employment is also created. Thus, the ratio of direct to indirect employment, i.e. the number of jobs created in other sectors of the economy as a result of one job created in tourism was 1:0.88 in Vanuatu, 1:0.57 in Tonga, and 1:1.15 in Papua New Guinea.

Constraints on growth

The principal constraints on tourism development and market growth in the South Pacific are the following:

- inadequate, and historically erratic, air access from major tourist generating markets, particularly from North America and Japan. This is further compounded by rather uncoordinated intra - regional airline operations and relatively expensive inter - island fare structures;

- lack of the necessary infrastructure and facilities of a sufficient capacity and quality to attract sizeable flows of international tourists;

- insufficient public and private sector investment for bath development and marketing purposes;

- shortage of trained manpower at all levels of skills in the tourism sector;

- lack, although in varying degrees, of an appropriate institutional framework for the development and promotion of tourism, comprising coherent policies, systematic planning, necessary legislative measures and effective organisational structures.

Development problems and solutions

Several fundamental, although not intractable, development problems need to be effectively addressed, before the tourism sector in most South Pacific islands makes real head way.

There is, first, the question of the required tourism infrastructure and facilities. There are encouraging indications that more Pacific island governments are beginning to pay greater attention to tourism. Clearly, a sustained development effort needs to be made, backed up with systematic planning, efficient allocation of resources, and systematic investment promotion. In this respect, the question of traditional land tenure patterns in certain islands tends to impede development of the tourism sector and governments need to find urgently satisfactory solutions. Here, Fiji’s arrangements through the Native Land Trust Board certainly offer a good example to follow.

Secondly, high priority must be given to the improvement of the accessibility of the region in terms of increased capacity and frequency of airline services both from main metropolitan centres and within the region itself. Close coordination and cooperation among the air transport operators in the region is required, although admittedly little influence can be exerted on foreign airlines by Pacific island countries. In this context, Air Pacific’s current efforts to expand links with key market areas is bound to improve not only Fiji’s position, but also that of the region as a whole.

Thirdly, as part of a concerted effort to develop their tourism sector, island countries have to address the urgent need for extensive tourism education and training. Systematic and sustained efforts in human resource development are seen as a necessary pre - condition not only of tourism development on any significant scale, but also of increased participation of local communities, particularly in an entrepreneurial capacity. Among other things, the University of the South Pacific’s plans to introduce degree level courses in tourism studies undoubtedly augurs well for the region.

Fourthly, the all - pervasive nature of tourism in economic, social and environmental terms, requires an integrated institutional and planning framework, rather than a fragmented approach. Island countries, almost invariably, need to strengthen their organisational structures for tourism and undertake systematic tourism development planning. At the regional level, cooperation among small island countries with limited resources has been recognised as a paramount need. The recent establishment of the Tourism Council of the South Pacific as a regional intergovernmental organisation is clear evidence of the island governments’ desire to foster regional cooperation in the development and promotion of tourism.

Finally, sustained long - term development of the tourism sector, with a more even distribution of tourist flows throughout the South Pacific region, ultimately depends on the islands’ ability to develop new long haul markets, mainly North America, Western Europe and Japan. This task can be achieved through a regional cooperative effort, by pooling of resources. There are hopeful signs that this approach is gaining wide acceptance, as evidenced by the Tourism Council’s successful initiatives in the organisation and coordination of the region’s participation at major international travel fairs, and the newly - established regional tourism marketing representations in Western Europe.

Opportunities and prospects

There is a growing realisation among most South Pacific island countries that tourism holds a significant development potential, which should be fully exploited, albeit in a planned and controlled manner. It is anticipated that during the 1990s island governments and development aid donors will focus increasing attention on the tourism sector in the South Pacific.

Current global and regional tourism trends appear favourable for South Pacific islands. The Western European market is set to continue its steady growth trend, while the Japanese market is now showing signs of strong revival. The considerable North American market potential will begin to be tapped as soon as adequate airline services to the region are reinstated.

In a wider sense, the South Pacific region’s relatively late entry into the international tourist industry can be turned into a major long - term advantage. In adopting a planned and regulated development approach, Pacific islands, by and large, are still in a position to expand their tourism sectors in a way which emphasises environmental conservation and enhances the quality of the overall tourist experience. This will, no doubt, contribute substantially towards improving the standard of living and quality of life of their peoples.

J.Y.