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‘In 2017 Vanuatu Recorded Double-Digit Growth in Tourist Arrivals’

‘In 2017 Vanuatu Recorded Double-Digit Growth in Tourist Arrivals’
‘In 2017 Vanuatu Recorded Double-Digit Growth in Tourist Arrivals’
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SPTO’s Chris Cocker on tourism in the Pacific, challenges for Vanuatu and competition with Fiji

Chris Cocker at the Sasakawa Peace Foundation’s Cutting Edge Symposium in Tokyo, Japan

 

Christopher Ray Cocker, CEO at South Pacific Tourism Organisation, in this exclusive interview for Vila Times talks about tourist arrivals growth in the Pacific, tourism infrastructure development, international travel forecasts and China’s market potential for Vanuatu.

 

 

‘Over the last 10 years since 2007 tourist arrivals to the Pacific region have been growing on an average of 4.2%’

 

– According to the latest report, tourist arrivals in the Pacific in 2017 grew just by 3% compared to 2016. Not the most impressive growth for the market with such a tourism increase potential.

 

Over the last 10 years since 2007, tourist arrivals to the Pacific region have been growing on an average of 4.2% with some years experiencing both positive and negative growth.

For instance in 2009 there was a negative growth due to the global financial and economic crisis that impacted international travellers.

In 2011, tourist arrivals to the region peaked at 11% and thereafter hovering around the 3-5% growth. This shows that tourist arrivals to the region have been fluctuating over the years due to both external and domestic factors that are beyond the PICs control. Similarly, global tourism growth has also been growing on an average of 3-5% in the last 10 years and this has translated on the tourism growth in the Pacific Region.

The 3.1% growth in 2017 although is low already indicates an impressive collectively positive performance by PICs. Though the growth may seem small in percentage, in terms of numbers we had 65,000 tourists in 2017 compared to 45,000 in 2016.

This is because visitor arrivals vary in each destinations ranging from a highest positive growth of 28.2% in Timor to a negative growth of 27.7% for PNG. Balancing the positive and negative growths from each destination we reached a positive growth, and this shows that collectively PICs are performing well in the tourism industry.

One of the important things to note when looking at the numbers is not to look at growth only but also our total number of tourists. In 2017 arrivals to the PIC reached 2.1 million and this is a steady rise from 1.7 million in 2012.

 

 

‘We’re not looking at volume but at how much our visitors are spending in the Pacific’

 

– What needs to be done primarily in the Pacific nowadays to increase the number of tourist arrivals?

 

Sustainable Tourism is the way forward for the Pacific, and under that is ‘high yield tourism’; we’re not looking at volume but at how much our visitors are spending in the Pacific. The 2.1 million arrivals in 2017 generated an estimated USD3.6 billion in earnings.

The Pacific is home to some of the most beautiful, small and fragile islands, attracting high yield tourists who have low green impact on our islands is key to preserving our culture, tradition and most importantly our environment which is what we market to the world as a premier destination.

 

 

‘Partnerships between Fiji Airways and British Airways is a welcome development for the tourism industry in the Pacific’

 

– In your opinion, is it marketing or infrastructure that needs to be developed primarily?

 

It is a combination of both. Infrastructure particularly aviation has long been a challenge for many Pacific Islands who do not have their own airlines and rely on other regional and international airlines and code share associations to support our growing tourism industry but partnerships between Fiji Airways and British Airways is a welcome development for the tourism industry in the Pacific, which will open up new markets for growth.

Fiji Airways is also the first airline to become a connect member of ‘oneworld’ which is a platform that connects travellers to alliance airlines for travel benefits, this will help our growth for the future.
With Internet penetration increasing in the Pacific so too does our learning and capacity for online marketing. Some PIC’s are well established in using online marketing tools others are learning and developing their own strategies. We are still developing in that respect but growth is still constant in spite of this.

 

‘Total arrivals to the region are forecasted to grow at 4.5% to 2.2 million in 2018 and a further 4.1% to 2.3 million in 2019’

 

– Would you give a projection for growth in 2018 and the next years?

 

The current strong momentum in tourist arrivals to the Pacific ACP and SPTO member countries is expected to continue in 2018 and 2019 although at a more sustainable pace.

Total arrivals to the region are forecasted to grow at 4.5% to 2.2 million in 2018 and a further 4.1% to 2.3 million in 2019. Growth projections in arrivals in 2018 and 2019 is expected to be driven by expected positive performances in all the destinations with Fiji, French Polynesia, Cook Islands, PNG, Samoa, Palau, New Caledonia, and Vanuatu expected to dominate the number of arrivals over the period.

The forecasted growth in the short term is expected to be supported by the positive spillovers of the brighter global outlook and increasing tourist traffics from the regions traditional and emerging source markets.

Based on current trends and positive global outlook, arrivals from the Pacific ACP and SPTO member countries major source markets are forecasted to grow by 4% in 2018 and 2019. While the traditional source markets Australia and New Zealand will continue to dominate arrivals to the region, USA, emerging China and Other Asian markets will also provide further boost in the projected arrivals. Arrivals from all the remaining source markets are also projected to increase over the period.

The ACP and South Pacific Tourism Organisation (SPTO) member countries experienced exceptional arrival growth in the last ten years. Tourist arrivals to the region grew at an annual average rate of 4.2% over the 2007 to 2017 period.

Following the trough in 2009, stemmed from the global financial crisis, arrivals peaked at 11% in 2011, dipped in 2013, but rebounded quickly to 5.4% in 2014. This marked the influx of Chinese arrivals to the region. In subsequent years, arrivals to the region sustained growth at 5.4% in 2014, 4.7% in 2015, 5.8% in 2016 and 3.1% in 2017.

Based on current steady trends, economic prospects and optimistic international travel forecasts, the annual arrivals to the Pacific and SPTO member countries in the short to medium term is projected to hover around the forecasted 4% average growth in the next five years from 2019 to 2023. Under this assumption, the volume of arrivals to the Pacific region is forecasted to reach 2.7 million in 2023.

 

Medium Term Forecasts of Arrivals to Pacific ACP and SPTO Member Countries (2007-2023)

 

The downside risks to the short and medium term forecasts remain subject to the global economic or market conditions, which are surrounded by uncertainty, including unforeseen circumstances such as natural disasters (cyclones, tsunami, and earthquake) that frequently occur in the region.

The forecasts are also based on estimated future demand. As such, potential supply constraints, such as the capacity of accommodation, international flights and other factors could limit the actual growth below our forecasts.

 

‘The deceleration in Chinese arrivals in 2017 was partly owed to the weak outbound travel demand by the Chinese residents to the Pacific region falling by an estimated 23% during the year’

 

– Also from the latest report: the number of tourists visiting the Pacific from China in 2017 fell by about 7000 to 144,000. This is an interesting figure because the number of tourists from China keeps growing every year on the major tourism markets. How would you explain this decrease?

 

The deceleration was partly owed to the weak outbound travel demand by the Chinese residents to the Pacific region falling by an estimated 23% during the year. The deceleration was also dragged down by the reduction in Chinese arrivals to the top three Pacific destinations, Palau falling by 11%, Fiji 0.6% and PNG by 3.7%. The decline was also associated with the double digit slump in Chinese arrivals to Niue by 93.3%, American Samoa 31.4%, Marshall Islands 27.6%, Tuvalu 18.8%, New Caledonia 15.8%, Samoa 15.4% with French Polynesia falling by 9.3%.

 

‘Chinese arrivals have been declining in the past two years since it peaked at 75% in 2015 whilst arrivals from New Zealand and Australia have been growing steadily over the years’

 

– You think it is possible that China will become the major market for the Pacific by the number of tourists in the next several years, leaving Australia and NZ behind?

 

The China outbound market into the Pacific although will remain a key source market but may not replace the Australia and New Zealand as the major source markets. Chinese arrivals have been declining in the past two years since it peaked at 75% in 2015 whilst arrivals from New Zealand and Australia have been growing steadily over the years. The Pacific Islands are fragile and unique environments that we want to protect for the future of young Pacific Islanders but also for a sustainable tourism industry. It is therefore important that we are targeting quality and responsible visitors into our islands that are seeking to discover, experience and respect our islands, people and culture when visiting. China is a huge market and so we are looking to target mid to high-end visitors for the Pacific Islands, as well as focusing on niche tourism products. We are hoping to attract more niche travellers who are looking for meaningful experiences which could translate into higher yields as opposed to just higher numbers, and will help to support sustainable tourism for the Pacific Islands.

 

‘In 2017 Vanuatu has recorded double-digit growth in tourist arrivals compared to 2016’

 

– What are your general views on tourism in Vanuatu?

 

Vanuatu accounts for 5.1% of all inbound tourism into the Pacific Islands and is one of the more popular tourist destinations, whilst being the #2 cruise destination in the region. In 2017, Vanuatu has also recorded double-digit growth in tourist arrivals compared to 2016 which shows a positive rebound for the industry which faced a massive blow following the aftermath of Tropical cyclone Pam in 2015. The destination is slowly starting to see steady growth in tourism.

 

‘Challenges to do with air accessibility from international high yielding markets and competition from neighbouring PICs are some key factors that influence growth for Vanuatu’

 

– What are the most unique challenges this market is facing?

 

Recovering from the aftermath of Tropical cyclone Pam which had massive impacts on the destination but mainly the tourism businesses and operations were affected. The industry has taken time to recover and get back to business, which prolonged the recovery and the rebound of visitor arrivals compared to pre-TC PAM. The delay in the completion of the runway at Port Vila’s Bauerfield International Airport is another contributing factor.

Additionally, challenges to do with air accessibility from international high yielding markets and competition from neighbouring PICs are some key factors that influence growth for Vanuatu.

 

‘The industry has been doing wonderful work in driving campaigns and promotional marketing initiatives in the international marketplaces to invigorate travel back into Vanuatu’

 

– What should be done primarily in Vanuatu to attract more tourists?

 

The Vanuatu Tourism Office and the industry has been doing wonderful work in driving campaigns and promotional marketing initiatives in the international marketplaces to invigorate travel back into Vanuatu, especially in the major markets of Australia, NZ and Europe. Continued marketing and promotional efforts by the Vanuatu Tourism Office and support from the industry will grow the tourist arrivals.

 

‘Fiji accounts for 39.4% of all tourist arrivals into the region and sits comfortably in this position as the # 1 and top destination in the Pacific’

 

– You think Vanuatu will be able to compete with Fiji by the number of tourist anytime soon?

 

Fiji accounts for 39.4% of all tourist arrivals into the region and sits comfortably in this position as the # 1 and top destination in the Pacific. Vanuatu is at 9th place with 5.1% market share and it is very unlikely that it would overtake Fiji anytime soon.

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