Tourism has undoubtedly become one of the most important economic activities in Pacific island countries (PICs). For some, such as Vanuatu, Fiji and the Cook Islands, tourism is one of the largest economic sectors, while for others, the aim is to increase visitor arrivals, and more importantly, visitor expenditure. The development of tourism in PICs is largely governed by changing geopolitical, economic, socio-cultural and physical contexts. In turn, the way tourism is developed is expected to have long-lasting impacts, in a recently published paper we outline key themes that will define the nature of tourism development in the region.
The basic attributes of Pacific island tourism remain largely unchanged: these revolve around spectacular and photogenic places located in generally pleasant climatic contexts, although not easily accessible. PIC environments are generally characterised by fragility, especially to extreme climatic events and climate change – this is especially apparent for small coral atolls where economic options are severely limited.
Many PICs were colonised and remain under the influence of foreign powers, namely Australia, Chile, France, New Zealand, UK and USA. As a result, the tendency is for foreign visitors to travel to former colonies or protectorates: Tahiti and New Caledonia are popular with French visitors, while the New Zealand market is vital to the Cook Islands. However, this geopolitical context is changing rapidly and is most apparent due to the continued expansion of activities tied to the People’s Republic of China (PRC). PICs understandably want to expand their international bilateral relations beyond the region, rather than continuously rely on relationships traditionally shaped by power inequalities and paternalism.
In terms of tourism, Chinese enterprises play a vital role as investors in construction of hotels, while destination marketing organisations are engrossed in attracting more Chinese visitors. The Chinese market is still new for countries in the region, and there is a general lack of understanding of the needs of this market. Chinese visitation is evolving rapidly as increasing numbers of travellers gain international experience and deviate away from traditional modes of travel such as group tours. Doubtless, considerable strategic effort is required if PICs are to optimise Chinese inbound visitation.
Accessibility plays a vital role in attracting inbound visitation. Several PICs have managed to sustain national carriers, with Fiji Airways – formerly Air Pacific – a standout. In recent times, Fiji Airways has introduced more flights to/from Asia, not only for Chinese markets, but also toward better global connectedness (for example, through Singapore). Many PICs have tried establishing national carriers, but these attempts have usually led to bankruptcy, given the relatively small markets in the region. However, besides tourism, aviation in the Pacific is also an important civil service on account of the vast areas of ocean and great distances between countries. Low cost carriers and multilateral agreements (known as “open skies”) have largely remained unpopular among PIC policy makers.
Flight routes to and from Fiji, Tonga and Cook Islands (Credit: Denis Tolkach)
Importantly, we argue that a focus on continuously increasing international tourist visitation is not a panacea for development in PICs. Tourism should be considered one of the few options for economic development in the region. In comparison to mining, cash crop agriculture, foreign aid and remittances, tourism, when done well, is an ideal mechanism for economic diversification. Tourism is labour intensive and relies on skills that can be rapidly developed for most jobs in the sector. Nevertheless, there is a labour shortage for tourism and hospitality in PICs and a mismatch between the qualifications and skills required by the sector. There are various tourism industry training and development programs available, but many are either outdated or do not meet the demands of the sector. Thus, national workforce development plans that include not only technical, but also employability skills, are required.
Tourism development that is more likely to benefit PICs needs to be inclusive and linked with other sectors of the economy. Economic leakages are an ongoing concern for PICs. One source of leakages is ownership and the management structure of tourism-related businesses. Fiji is characterised by a higher presence of international brand hotels that lease land from native owners. Conversely, Cook Islands, despite being a popular tourist destination, does not have international brands. PICs are trying to reduce the amount of imported food used in hotels and restaurants. Agricultural programs that train local farmers on how to produce a reliable supply of food to restaurants and hotels are being rolled out.
Tourism impacts Pacific island societies by challenging traditions, social structures and cultural practices. Pacific islanders traditionally share communal resources and responsibilities. Tourism brings in commercial relationships and rewards individualism. Pacific islanders need to be able to protect their cultures and their ancestral lands. Land tenure laws that prevent outright ownership of land by foreigners are enacted and typically enforced well across the Pacific. However, protection of heritage and environment has been a challenge due to a number of reasons, including lack of financial and human resources. While PICs are too small to reduce climate change, they are affected by it. Thus, adaptation to climate change is of utmost importance for the Pacific. Moreover, tourism in the region relies on coastal areas, which are particularly threatened by cyclones.
The popular saying: “don’t put all eggs into one basket”, is very true for the Pacific islands. It is appropriate to develop stronger relationships with a broad range of countries in terms of politics, trade, tourism, education and culture. It is risky to rely not only on one market, but also on one product, even one sector. Tourism can support economies and bring benefits to the population, but tourism cannot be the only sector, and its benefits do not reach all citizens. Policies for improved inclusion of Pacific islanders in all aspects of tourism are needed, but it is also important to develop other economic sectors. Protection of culture and nature has to be prioritised, and not only in legal documents but through law enforcement on the ground. This is challenging, but to do otherwise is too risky.
This paper draws from a recent multi-authored research article in ‘Asia and the Pacific Policy Studies’. Contributors to this study included the authors of this blog post plus Anthony Bailey, Semisi Taumoepeau and Apisalome Movono.
Sure tourism is labour intensive but mostly developers come from richer nation’s investors and very little of the money spent remains in the local community. I recently visited Samoa and spoke to other tourists when I realised that so many of the locals are paid a pittance by their own standards. Why allow investors when the money just keeps on leaving the country? Most of the senior employees in the hotels weren’t local workers. The local workers got the low paid low skilled jobs and there isn’t much of a career path or even a job skills path.
It’s not that holidays in the Pacific are cheap – it’s just the mindset that the impact on the local community and the environment is not a concern to the happy holiday maker. Where is the ethical arguments about investing in the PIC and the benefits to the host country?
Indeed you raise many valid points – too impractical to offer a detailed discussion here. however, it has to be said that what happens in PICs is characteristic of the situation in other developing countries around the globe. FDI is a big driver of tourism development and consequently economic leakages are inevitable. In the absence of FDI, tourism product development would be stunted and the destination will be adrift from the global tourism supply chain.
You are right that in general, Managers tend to be expatriates – there are many reasons for this. Some companies prefer expatriate managers for skills and experience based reasons, others do it because where the majority of employees are drawn from the same communities, having a manager with familial links can create enormous operational challenges. Tourism jobs tend to inherently low skilled and low paid around the globe.
In many respects tourism is a reflection of globalisation and as geographer Stephen Britton argues, tourism takes PICs into a situation they have little control over. You are generally right in that the impacts of tourism are rarely of concern to the traveller -hedonism characterises much travel – the responsible tourism movement is trying to change this. Alas, out of mind out of sight – Bali is a case in point.
The broader question is if not tourism, what then? Economic diversification for small island countries is immensely challenging. Donors and multilateral organisations are trying to change this but the constraints are so intractable.
There is no easy fix and the inequalities and injustices evident in tourism in PICs are commonplace elsewhere. Not that this is a convenient excuse, it is the inescapable reality.
The development of tourism in the Pacific island countries is certainly possible but imperfect government policy too often makes it improbable. In the past 35 years, I don’t think I’ve read a single paper on PIC tourism that has been able to make the connection between tourism potential and the realities that private developers face in investing in tourism development in the islands. Please see my blog of February 13, 2012 “Islanders in business? There could be more if the policies and institutions were right” and the now many private sector assessments of the Private Sector Development Initiative: http://www.adbpsdi.org/p/what-is-psdi.html
Good points Steve. I know of your work in the area. When you say private developers I assume you refer to foreign investors? Indeed, the risk premium related to investing PICs is much higher than elsewhere and requires addressing. The deficits in institutions and poor governance is indeed a major constraint – in tourism and in development more broadly. There is a gulf between what the right policies and institutions are in theory and what has been able to be deployed in practice – not just in tourism.
Is the problem that initiatives are poorly designed and that modes of development that have proven to be unsuccessful and benign are persisting? Or is it always convenient to point the finger at local institutions? Must the donors and multilateral institutions take some responsibility for this? Do the historical legacies have anything to do with this?
PICS have competitiveness deficits as compared to SE Asian countries – can this be overcome? Access and air travel costs are comparatively very high but there seems little that can be done about this because of the binding constraints. Nevertheless, tourism is one of the comparative advantages that PICs have but if the expectations are to reach the heights of Bali or Thailand, they are probably unrealistic.
By private developers, I mean both domestic and foreign. Many of the weak environment concerns rule against both. However, FDI can be better placed as it may arrive with capital, skilled labour as one of the fixed costs, a proven investment plan, current technology and market access. In addition, governments too often try to counter their bad investment environment with special concessions to attract FDI. On the other hand, domestic investors often have to face the extra challenge of acceptance in the close-knit societies of the PICs. All in all the real challenge in tourism, as other PIC economic development is one of market supply, rather than market demand.
These concerns have to be worked through the political economy of the PICs where governments historically expect to directly engage, where state capitalism offers additional political gain and where a more liberal investment climate is politically risky. Short-term donors and associated consultancies consistently compound the problem by ignoring the cross-cutting political economy, institutional and governance constraints and demand quick, “silver bullet”, technical solutions that may impress donor and recipient capitals but ignore common capacity, including institutional capacity constraints.
The deficits in institutions and poor governance you refer to, and the overall political economy of both recipient and donor perpetuate the PIC dependence on migration, remittances, aid and bureaucracy (“MIRAB”) and greatly lessen the probability, but the possibility of tourism and other economic development.