Palau Identifies New Tourism Markets

Palau is preparing to reset its tourism, identifying the niche markets it seeks to tap to suit its projected new brand as a high-end destination.

Under its five-year Tourism Strategic Plan, Palau is targeting eco-based, cultural, sports, and wedding and honeymoon markets.

“In our current tourism reset,” Palau President Tommy Remengesau said in his State of the Republic Address on Tuesday, “we can once again return to our vision of a high-value tourism destination and implement our tourism strategy of a ‘Pristine Paradise. Palau’ brand, which will move us toward a maximum return on investment and a diverse set of tourism guests.”

Remengesau said Palau’s new “high-value brand” will capitalize on “the beauty of our natural environment, of experiencing the unspoiled beauty of our lands and our pristine seas and our rich cultural heritage.”

Last month, Remengesau signed an amendment to Palau’s foreign investment law to require quality investment and quality tourism facilities.

The new law offers tax credits of up to 40 percent to foreign investors that will develop 5-star lodging facilities — worth at least $5 million — to support “high-end, high-value, low-impact tourism.”

Another component of the new law involves a crackdown on tax-evading foreign business that uses local fronts.

“I would ask that all Palauans support the [Foreign Investment Board] in its efforts to enforce our law and to ensure that foreign businesses follow the rules and pay their fair share of taxes,” Remenegsau said.

“By the passage of these laws and the expansion of the FIB budget, we have established a capacity to begin enforcing this vision on the ground,” he added.

Remengesau said the government will not accommodate random investors who do not share the thrust of Palau’s new brand.

“Let us continue to be mindful of the fact that, ‘Many will come calling and knocking at our door, but only a few good partners can be chosen,’” he said.

Palau saw tourism growth in 2014 and 2015, but arrivals were mostly low-value tourists from China with daily expenditure well below historical levels.

“This rapid increase in tourists from China resulted in comparable losses in tourists from Japan, Korea, the European Union and the United States,” Remengesau said.

But Palau is no longer interested in mass tourism.

“It is about realizing more for each dollar spent, not just through the various niche products offered but also through quality locally produced products from the food visitors consume to the gifts they bring back home,” the president said. “It is not about limiting Palau to only those that can afford to come.”

Palau saw a 16 percent decline in arrivals from China in the last quarter of 2017, presumably a result of the Chinese government’s cancellation of the Pacific nation’s approved destination status.

China instructed its tourist agencies in November last year to stop all flights to Palau in protest over its full diplomatic relations with Taiwan, which was reinforced by Taiwan President Tsai Ing-wen’s visit.

Despite the last-quarter drop in arrivals, China continued to be the major source market for this destination with a share of 47.7 percent to 13,712, according to the Quarterly Review of Tourist Arrivals in Pacific Island Countries recently published by the South Pacific Tourism Organisation or SPTO.

“While our tourism revenues have recently declined due to a number of factors, including the significant reduction in tourists from the Peoples’ Republic of China, we must stay the course and implement our vision of a high-value tourism model,” Remengesau said.

“During this reset, we will also have time to identify long-term regular airlines and also develop a strong and transparent process of charter flight selection and monitoring,” he added.

Delta Airlines recently ended its Palau service, but Remengesau there is no reason to panic.

“We must simply identify new partners, and we are working diligently to do so,” he said. “Ultimately, our regular airlines should be the major carriers bringing quality tourists to our market. But we cannot discount that charter flights fill in the gaps that ensure the delivery of tourists to Palau.”

(Source: Marianas Variety 20 April 2018)

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