The Pacific bubble takes shape

(Credit Pascal Baumann Flickr CC BY-NC-ND 2.0)
(Credit Pascal Baumann Flickr CC BY-NC-ND 2.0)

There is no doubting the importance of tourism and labour mobility to the Pacific. With few and falling COVID-19 cases, no wonder the idea of including the Pacific in the proposed Australia-New Zealand travel ‘bubble’ has gained prominence. In this blog we take stock of how the bubble is forming.

Australia and New Zealand have made it clear that they are open to the idea, but only after they have formed their own trans-Tasman COVID-safe travel zone. That itself might be some time off, so it is unclear when the Pacific bubble will be open for business: “it will take time” according to the New Zealand Prime Minister, words echoed by the Australian High Commissioner to Fiji. It is also likely that whatever Australia and New Zealand agree on with regards to travel protocols will also become the basis for any trans-Pacific agreement.

What about on the Pacific side? Some countries are keen, others not so.

Fiji is the tourism giant of the Pacific, and it is no surprise that it is leading the charge. At the start of last week, Fiji’s Minister for Civil Aviation Aiyaz Sayed-Khaiyum (effectively the country’s Deputy PM) announced that Fiji wanted in, and that he had contacted respective ministers from Australia and New Zealand on the matter. At the end of last week he gave an update, though no specifics.

At the other end of the spectrum are those countries where tourism is less well developed, such as Solomon Islands and Marshall Islands. They are much less interested. Tonga has responded cautiously. Papua New Guinea has also expressed some interest.

There are a number of countries yet to come out strongly one way or another. Vanuatu has also said it is in talks, but the reinstatement of travel would “depend on how Australia and New Zealand handled the coronavirus.” Cook Islands appears to be showing interest. Palau has expressed interest in a different bubble – one with Taiwan.

Fiji dominates the Pacific tourism market, especially from an Australian-New Zealand perspective. Just over one million Australians and New Zealanders visit the Pacific every year. Just over half go to Fiji. (See the end of the blog for sources.)

Australian and New Zealand visitors to Fiji and the rest of the Pacific, 2017

Among the other Pacific countries, Cook Islands is the most important travel destination for both countries combined. Cook Islands receives almost 60 per cent of the number of New Zealand visitors who travel to Fiji, but only one-quarter the number of Australians and New Zealanders combined. Cook Islands receives 30 per cent more travellers from these two source countries than Samoa, which is another 30 per cent ahead of PNG, which is 12 per cent of Vanuatu. Other countries follow far behind.

Australian and New Zealand visitors to Pacific island countries (excluding Fiji) 2017

Clearly, Fiji, by a long way, and then the Cook Islands have by far the most to gain from any travel bubble with Australia and New Zealand.

Australia and New Zealand enjoy a lot more reciprocal travel than either country does with Fiji. In 2019, some 1.5 million Australian residents visited New Zealand, and some 1.3 million New Zealanders visited Australia. When you look at those two numbers, it is clear why the initial focus is just on trans-Tasman travel. Nevertheless, both countries would gain from the inclusion of Fiji. Fiji was the ninth most popular destination for Australian residents in 2019, hosting some 345,000 or 3 per cent of returning Australian residents (away for a year or less). The next Pacific country on this list is PNG in 21st place (94,000), and Vanuatu in 26th (66,000).

Relatively speaking, the Pacific is a much more important destination for New Zealand travellers wanting to travel to somewhere other than Australia. Fiji is New Zealand’s third most popular destination (with 184,000 trips in 2019; after only Australia and the US), Cook Islands the sixth (107,000), and Samoa the eighth (67,000).

Of course, how many will want to travel — whether across the Tasman or across the Pacific — remains to be seen, but one New Zealand survey showed positive sentiment towards Pacific travel, with many more indicating a desire to travel to the Pacific post-pandemic than normally visit.

Fiji is certainly pressing its case. It has tested 1,300 residents, and found 18 cases, the most recent of which was announced on 21 April. It is also working on a contact tracing app with help from Singapore.

The Cook Islands government has kept a lower public profile, though its tourism sector is clearly pushing for inclusion. Cook Islands has declared itself to be COVID-19 free (after 1,200 tests and no confirmed cases). New Zealand citizens are already allowed in, but there are no incoming passenger flights. Many more Cook Islanders live overseas than at home, which will presumably also increase the incentive to open up.

Given the importance of remittances, labour mobility considerations should also feed into the design and membership of any travel bubble, but they don’t seem to be. Perhaps that will come later when the situation regarding horticultural labour demand is clearer.

In the meantime, we might be looking initially – after “some time” – at an Australian-New Zealand-Fiji tourism bubble, with Cook Islands as a possible fourth member.

Note: Numbers comparing visitors to various Pacific island countries are for 2017 from this STPO report. Those comparing the Pacific with other destination countries are from Australian and New Zealand statistical sources, for 2019. Cruises are excluded from all these numbers.

This post is part of the #COVID-19 and the Pacific series.

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Stephen Howes

Stephen Howes is the Director of the Development Policy Centre and a Professor of Economics at the Crawford School.

Sadhana Sen

Sadhana Sen is an independent regional development and communications consultant, and freelance journalist. She also provides media support and outreach for Devpol researchers.

11 Comments

  • Please don’t forget Timor-Leste, one hour’s flying time from Darwin. Its last COVID=19 cases have recovered, all were from outside the country. No community transmission so far. Northern Territory also has very few cases, it would assist Timor-Leste’s economy hugely to open before Indonesia. Many Australians will want to go somewhere new and different when the lockdown is over!

  • The greatest risk with an extended bubble is to the health of Pacific islanders themselves. Like Cook Islands, there is a good chance that many Pacific states will be able to declare themselves to be free of COVID-19. This is an issue that needs to be discussed with the same care as this labour mobility and tourism conversation.

    Worth noting Dame Meg Taylor’s comment this morning in the Asia Society webinar with Ralph Regenvanu & Kevin Rudd: “We just don’t have strong health systems, health services and health infrastructure. Our first priority is to maintain health in our countries.”

    • Clearly, each country will make its own decision. If a country wants to take part in the bubble, they have to lobby for it, which Fiji is doing. But they also have to convince Australia that it has the COVID-19 situation under control. So, for those countries who want to take part, the domestic and international incentives are aligned on the health front.

  • Any indication when this bubble could be implemented? September? December? 2021?
    And would Australians have to self isolate for 14 days upon return from Fiju?

    • Good questions. The only answers I would venture are: (a) after Australia-NZ flights are opened; and (b) whatever these two countries agree on as regulatory safeguards will then apply to the Pacific.

  • What is less clear is Australia and NZ’s incentives to include Pacific island countries into their bubble. After all they may prefer if their citizens spend money at home to support their hard hit tourism industry rather than abroad.
    Perhaps an investment by AU/NZ to demonstrate regional leadership and solidarity in a time of growing Chinese influence?

    • Steve, with that argument why would any travel bubble be formed at all? Presumably, the more it will be used the greater the incentive to have a travel bubble. Hence, the strongest incentive is for Australia to form a bubble with NZ, and vice versa. But then, if there is going to be a bubble with the Pacific (and ANZ have already said they want to include the Pacific), the numbers suggest Fiji has the strongest case, followed by Cook Islands.

      • For NZ, tourists from Australia generate a very large share of the country’s tourism industry revenues. So its economic incentives are strong. For Australia, NZ travelers represented a much smaller share of the industry’s revenue, so the incentives are weaker but still non negligible. This being said, between both countries there are close ties at all levels – professional, family bonds, etc. justifying the creation of the bubble. With other countries the risk/benefit ratio is less obvious.

  • The economic arguments from the Cook Islands point of view are already very strong, but from a health risk perspective it make sense for NZ to include the Cook Islands perhaps earlier than the other two, given the lack of any cases, proportional application of testing and no transit options outside of the Auckland-Rarotonga airlink.

  • Thanks both. I really hope the scheme can be expanded to include our Pacific Island neighbours. Yes, labour mobility should be factored into the design, where we have scheme that works well and where risks have been identified and managed. But so too should risks in some countries where controls around passport sales or citizenship sale may not be as strong as they should be, and which could provide a back door entry from people who might otherwise struggle to get a visa from their country of origin.

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