Fiji Hotel and Tourism Association, 14 March 2024 – Relaxing with a loved one, sipping a cocktail, watching the sun sink beneath the horizon, and fully immersing oneself in the tranquil island atmosphere – that’s the quintessential dream for travellers who book their flights to our golden shores.
In a world fueled by wanderlust without limits, the aim is to always position Destination
Fiji as a symbol of untouched beauty so we can attract adventurers from all over the
world with our crystal-clear waters, lush landscapes, and genetically hard-wired,
cultural propensity for welcoming visitors like family.
In short – our ability to welcome people from around the world to our beautiful home.
Fiji is a testament to a resilience built from being in a tropical location that can be a
diametrical contrast of idyllic and devastating climate conditions, endured by a
population that can be annoyingly positive and happy despite all that is thrown at us.
It is no wonder therefore that Fiji punches well above its weight economically. Mainly
through industries that must compete at a global level to survive and thrive as many
like tourism, manufacturing, construction and even business process outsourcing do
now.
There is no doubt therefore that we have not just come a long way. We have managed
to survive and push through the many obstacles that eventually drift our way, as they
tend to do – coming sometimes in ripples, waves or tsunami-like as the pandemic did.
However, some travellers, particularly our returning (former) citizens, often find
themselves puzzled by the relatively high prices of our tourism offerings.
Perhaps forgetting the higher strength of their overseas dollars in years gone by, the
lower wages being earned here during those years and the desperation of tourism to
refill its planes, hotels and excursions, especially post the many political coups and
even more cyclones we have experienced.
That was a long time ago and anything pre-COVID is now, well – old and outdated.
Like economies far larger than ours, Fiji also feels the impact of increased fuel and
food prices because of the Russia/Ukraine war, the resulting supply chain constraints,
increased debt levels exacerbated by almost 2 years of border closures and rising
inflation as Governments around the world try to claw back to safer fiscal positions.
With global headline inflation now expected to fall, supply chain issues expected to
continue to unwind, and restrictive monetary policies starting to loosen somewhat
(slower in Fiji); we should see debt levels also creep slowly downwards (hopefully
faster in Fiji).
That’s what the IMF’s World Economic Outlook for January 2024 tells us.
How does all that impact Fiji’s largest industry like tourism, with cost increases
compounded by skill shortages, higher reliance on imported fresh produce and food
products and a far too slow response to demand for more room inventory due to delays
in investment plans?
We believe the answer to that lies in the carefully worded last summary point of the
IFC’s report that notes: “Structural reforms need to tackle the key constraints to higher
GDP growth, build resilience and address future challenges, including climate change
and emigration”.
This means growing the economic pie to soften the reliance on tourism so that tax
revenues can be increased to a wider than current corporate pool. And tackling the
obstacles to the fundamental drivers of growth by liberalising our labour, product and
service markets, which then encourages job creation and investment, and supports
improving productivity.
Building resilience and being prepared for future challenges requires our corporate,
social and individual ability to have safety nets in place that can be used when disaster
strikes in the form of cyclones or environment threatening coastal inundation, or even
medical emergencies that can stop your current revenue streams.
For tourism this means our visitors are stopped from coming, or the numbers coming
are drastically reduced.
The slow accessibility to skills that forces employers to hire from overseas at higher
costs and the impact of inflation generally on tourism businesses form the final part of
the increasing cost of business.
The expectation therefore that the cost of airline tickets, hotel rooms, restaurant food,
or even ferry and land transport services should remain at pre-2019 levels is bizarre,
yet we find it acceptable to pay more for our food from supermarkets, our bread from
the bakeries, our soft drinks or beer, and even our fuel for our cars; is a fundamentally
flawed argument.
In much the same way that we vehemently deny an essential utility service for
providing water in our taps the ability to increase rates, while demanding with equal
fervor and heated criticism their ability to provide sufficient water with more
consistency. Even though we know full well their challenges with an outdated and
disintegrating infrastructure that requires a ton of money to fix.
Meanwhile, we demand higher wages yet ignore the fact that we have a small and
limited pool of employers who keep losing their skilled people to overseas labour
markets.
If there is a business out there (that is not a utility provider) that is still charging at pre
2019 levels, they’re probably not making a profit. And if you’re not making a profit, you
might just be able to call your business a charity.
If you’re in tourism, you’re constantly under Government’s fiscal telescope looking for
ways to tax you further. But painful, historical experience has shown that this only hurts
the fiscal coffers by impacting demand for Fiji.
It’s a simple equation the taxman now knows only too well – the less visitors we get,
the less taxes we pay. But, it’s always good to remind him.
Visitors can and do take their business elsewhere, especially now with fierce
competition in our core markets having identified the impact of inflation, throwing out
bargain prices in a bid to lure holidaymakers to their own shores.
The influence of external economic pressures, including inflationary forces and
currency fluctuations, cannot be understated.
These factors introduce an element of uncertainty, making it challenging for tourism
operators to maintain competitive pricing while simultaneously covering their costs that
must also include being prepared for disasters, competing for better-skilled workers
with higher wages, ensuring they are staying abreast of trends and safety
expectations, offering value for money, and competing service-wise. While ensuring
they can remain compliant by paying taxes, renewing regulatory requirements and
repaying their loans.
And like we do for everything else that might appear on the horizon – plan for the bad
times.
By understanding the nuances of the industry and adopting strategic approaches, such
as booking online, checking the availability of local specials, holiday packages or
special event celebrations, travelling during ‘off-peak’ seasons, booking longer stays
to avail discounts, and leveraging loyalty programs; you too can navigate the
landscape of tourism offerings more effectively.
With careful planning and a willingness to explore alternative options, travellers can
still immerse themselves in the splendour of Fiji’s pristine beaches, lush landscapes,
and vibrant culture, and not simply focus on the cost of the airline ticket or hotel room.
We especially recommend trying out a host of speciality offerings that reconnect you
to nature, explore the ocean or the forest, trek through unspoilt terrain, rivers and
valleys, and talk to our people who call these magnificent backdrops home.
Having hit rock bottom more often than we care to remember, this is an industry that knows it must deliver. Especially if it must contribute as expected to the projected economic growth of 3% for 2024.
Fantasha Lockington – CEO, FHTA (Published in the Fiji Times on 14 March 2024)
Fiji Hotel and Tourism Association
The Voice of the Industry
