Fiji Hotel and Tourism Association, 03 July 2025 – Fiji’s tourism industry has long demonstrated remarkable resilience, weathering annual challenges with a quiet strength forged by experience. From navigating political and climatic upheavals to enduring global and regional crises, we continue to adapt as a small island developing state on the edge of the South Pacific.
In recent years, we’ve faced some of our most difficult trials: pandemic-driven disruption, soaring operational costs, and shifting market expectations. Yet today, there’s a growing sense—not just of hope, but of momentum. It feels as though the tide is turning, and a brighter chapter is already unfolding. That is, of course, barring the occasional rogue cyclone arriving unseasonably, just to remind us who’s really in charge.
For many across Fiji, one of the most welcome—and perhaps unexpected— announcements in the recent national budget was the reduction of VAT to 12.5%.
For tourism operators, this change offers immediate relief. Price-sensitive source markets are likely to perceive greater value, potentially tipping the scales in Fiji’s favour as visitors consider their next holiday destination.
While the industry continues to grapple with the higher departure tax, the VAT reduction signals a possible shift toward balance—an attempt by government to ease the burden where it can while stimulating economic activity across multiple sectors.
A lower VAT environment could translate to more affordable travel options once the transitional challenges are ironed out, particularly where pre-confirmed rates are concerned. Operators will consider options like redeemable credits or offer enhanced package appeal through value-added inclusions.
As travellers weigh up the total cost of their holidays, Fiji may now appear just that little bit more accessible, especially when compared to competing destinations across the Pacific and Asia, where rates can be significantly lower. But these are not apples to-apples comparisons; we are competing on very different playing fields.
Take Southeast Asia, for example. Many of those destinations are almost entirely self sufficient in terms of fresh produce, while Fiji currently imports around 60% of its food supply. Labour is another critical factor—our tourism sector draws from a workforce pool of under 200,000, in stark contrast to countries with over a million work-ready citizens.
When you also factor in a tightly regulated business environment and an industry that—commendably—pays well above minimum wage, it becomes clear that Fiji’s competitive edge must lie elsewhere.
Our strength is—and always has been—in the warmth of our people, the unmatched sense of safety, and the true value-for-money experience that keeps visitors coming back. Destination Fiji isn’t just a place, it’s a feeling: joy, welcome, and discovery in a happy corner of the world.
From luxury resorts and boutique guesthouses to tour and activity operators, the reduction in VAT offers some welcome relief. It helps ease pressure on input costs and provides much-needed flexibility to keep travel packages competitive and appealing.
When paired with recent reductions in food import duties—and backed by long overdue initiatives we hope will streamline import pathways—this policy shift could open doors to sourcing products previously out of reach. If savings in food costs are passed on creatively, they hold the potential to boost bookings and broaden appeal by enabling more diverse menu offerings at more accessible price points.
Yet the story doesn’t end with fiscal easing. Beneath these budgetary measures lies something more strategic: a clear signal of futureproofing.
We’re watching with keen interest as the government’s focus turns toward the long term enablers of growth—investments in infrastructure, public safety, and the conditions that drive investor confidence. Just as importantly, there’s an implicit call for our health and education systems to align more closely with the medium- and long term ambitions laid out in the National Development Plan.
The allocation of $93 million to the tourism and civil aviation sector—of which $48 million is directed to Tourism Fiji—is a powerful investment in our nation’s global brand.
As the frontline in destination marketing, Tourism Fiji plays a critical role in expanding our visibility, especially in untapped and emerging markets. This funding strengthens our ability to deliver consistent, targeted campaigns that shape travel decisions and respond to the dynamics of both high and low season demands, particularly as our room inventory continues to grow.
Equally significant is the $30 million commitment to the “Na Vualiku” Vanua Levu tourism project. This is more than a regional investment—it’s a clear endorsement of the kind of long-term, inclusive thinking the industry needs.
Diversifying our tourism hubs isn’t just good practice—it remains essential to building economic resilience and ensuring that tourism’s benefits are inclusive and extend across all regions. Vanua Levu has long represented immense potential for sustainable and community-driven tourism. With strategic infrastructure development, we can unlock this potential, improve accessibility, and elevate the visitor experience, while remaining firmly rooted in environmental stewardship and cultural authenticity.
Naturally, no conversation about travel and tourism can sidestep the critical issue of safety, both in perception and in practice. The recent budget’s focus on tightening border security, boosting police presence, and enhancing drug enforcement responds directly to growing concerns across the community. It acknowledges what many have voiced: that with the rewards of economic growth come new and complex challenges that must be managed head-on.
As hosts, we know that our visitors don’t just choose Fiji for its scenery—they come for peace of mind, for that deep sense of welcome and well-being. Our brand as a destination is built on serenity, trust, and ease. Strengthening the foundations of safety isn’t just about enforcement; it’s about preserving the very essence of what makes Fiji special.
By proactively investing in security and community resilience, we’re reinforcing our collective promise: that a trip to Fiji is not only beautiful but refreshingly carefree. While the safety of our staff and communities and the younger members of our population remains protected, and aware of these challenges.
As always, our genuine optimism is tempered by hard-earned caution—an instinct honed over 70 years in an industry that lives with one eye on the horizon. Tourism has taught us to move quickly, bounce back stronger, and remain ever vigilant for the next headwind.
The significant reduction in VAT and other tax relief measures—while welcome—comes at a time of equally critical spending on social services, which are both necessary and overdue. But this brings us to a fundamental question: How do we ensure that promised infrastructure investments are not just delivered, but delivered with urgency and efficiency?
Too many essential projects remain stuck in slow motion. Health facilities, education infrastructure, bridges, road networks, water and energy systems, and waste management services—these are not just line items in a development plan. They are make-or-break elements for communities and tourism alike. The delays we’re seeing are not just inconvenient; they are actively constraining tourism growth, limiting investment confidence, and compromising visitor experience in areas with untapped potential. Moving these projects from planning or from current stages to delivery would ensure our efforts to diversify and grow the economy would also provide the necessary impetus to get new businesses off the ground and reap the benefits of more jobs, and provide more tax revenue to continue the momentum.
Even behind-the-scenes upgrades have tourism relevance.
The Government’s investment in digitalisation—from building permit reforms to the expansion of businessNOW Fiji—should make setting up or expanding businesses quicker and easier.
This smoother, more transparent regulatory environment increases investor confidence and supports entrepreneurship, particularly for smaller operators or those in the informal sector looking to formalise and scale up.
The time for acceleration is now. If tourism is to deliver on its promise of inclusive economic growth, these foundational systems must move in lockstep. That means fast-tracking work permit or license processes, holding delivery agencies accountable, and embracing public-private partnerships that can inject capability and capital where government bandwidth is stretched.
We are not asking for miracles—only the pace and precision befitting a sector that contributes so much to our economy and national identity. With the right alignment, we can turn this moment of fiscal reset into a catalyst for more resilient, future-ready development.
This year’s budget may not offer all the solutions, but it signals intent, prioritises progress, and sets the stage for meaningful action – and that gives us hope! What matters now is how swiftly and strategically we translate this momentum into outcomes that reinforce resilience, unlock inclusive growth, and keep tourism at the forefront of Fiji’s development journey because it is still delivering the lion’s share of contributions to GDP, to employment and taxes generally.
Fantasha Lockington – CEO, FHTA (Published in the Fiji Times on 03 July 2025)
Fiji Hotel and Tourism Association
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