Tourism Talanoa: Do what you can

FHTA, 22 July 2021 – Last week saw the announcement of the much-anticipated Fijian National Budget for 2021/2022. That evening every concerned citizen was attentively glued to their TV and phone, trying to work out how each new measure and initiative being announced was going to affect them, their business, community, industry and eventually how this was all going to help us get our economy back into shape.

Some wise person noted correctly that “The biggest communication problem is that we do not listen to understand, we listen to reply.”

I would like to imagine that many of us in hearing the budget, first tried to understand it and while I also imagine there probably has never existed a perfect budget, I have no doubt there is always fault to find if that is what one seeks only to find.

Let’s face it, the country isn’t in the best fiscal shape, so it is not a huge stretch of the imagination to recognise that given we’ve just had an economic contraction of 15.7 percent in 2020, with a further 4.1 percent contraction projected for this year, (and a loss of over $2 billion in GDP), we need some pragmatic use of what little we do have.

From the early days of this pandemic, the industry had opined quietly but determinedly, that vaccination would be the essential driver in getting the country to the new-normal COVID-19 was enforcing on us globally.

The Fiji Hotel & Tourism Association (FHTA) is, therefore, very encouraged to see that this is one of the 2021/2022 National Budget’s key focus areas with the Ministry of Health & Medical Services being allocated what we hope is what they needed.

Key initiatives announced are expected to address the economic shortfalls with many support programs being continued from last year that is still needed, and new ones being introduced for the unemployed.

As one of the largest employers that were forced to shed workers immediately after borders shut, the focus on income support for the unemployed acknowledges that we still have thousands of Fijians out of work who still need to be provided for.

Continuing in the background with very little acknowledgement or publicity, many tourism operators have been providing for their staff who have been the backbone of the industry with their warmth and smiles, and we are delighted to see that they will receive more assistance in the coming months.

We have no doubt though, that they would rather be back at work earning a living and doing what they love best.

While our economy is not expected to rebound to 2019 levels for at least three years, we remain a little more optimistic. How could we not be in an industry that sells happiness, rest and recreation?

FHTA acknowledges of course, that several key milestones must be achieved beforehand and more business supportive policies introduced or continued to enable a faster industry turnaround.

The focus on vaccination as a condition of employment is the biggest milestone to achieve for Fiji, to get its largest industry back to work under safer work conditions.

Additionally, as a small and developing island nation, Fiji might be getting crushed by this pandemic now, but we have an unwavering belief in the resilience of our people and our ability to get back up again, pick up the pieces and move on forward.

We have seen this time and again over the decades, the industry has continued its progressive and determined growth. Through the worst storms, cyclones, floods, political upheavals and economic downturns.

We are still here and we need to get back to work and the only way to safely manage reopening borders and any interaction with incoming visitors is to ensure that as many people as possible have been vaccinated and therefore stand the best chance of avoiding getting sick or making anyone else sick.

Under the business revival strategies, FHTA welcomes the retention of tax reforms that were introduced last year that the industry has not been able to take advantage of with closed borders and the rippling effect of closed tourism businesses.

From the removal of taxes like STT (6%), the reduction in others like the Environment Climate Adaptation Levy (ECAL) from 10% to 5%, the reduction in departure and alcohol taxes, as well as on import tariffs on around 2,000 items; it is critical to both businesses and supply lines that taxes and consequently contract rates remaining steady, provided the prerequisite business confidence for Fiji to compete internationally.

Welcome news also, was the inclusion this year of other business support measures where fees and charges for licensing and compliance are either being waived or will be paid for by Government through its COVID-19 recovery credit guarantee scheme.

Tourism is never just about hotel rooms near beautiful beaches. If it were, we would never have seen the growth we have had that has contributed to 40% of GDP.

The ability of a tropical destination in a prime location to offer a range of holidays options with a variety of activities in adventure, eco, cultural, marine and nature-based options is what has driven tourism’s phenomenal growth.

Obviously having the friendliest people in the world delivering these options, a world-class national airline and decent infrastructure for a developing island nation press home our advantage.

But it is essentially the large number of SME businesses that both create and drive these opportunities in offering variety and choice to our markets.

So, the supportive initiatives announced to help SME’s meet their operational needs, including payment of wages and salaries, rental cost, utility bills, purchase of stocks and other working capital requirements are far more important than many might otherwise realise.

The Association had identified a need for existing tourism businesses to get reopening-ready and this was granted where depending on the size of the investment, 5-year income tax holidays and customs duty exemptions have been made possible for refurbishing and renovations.

We are preparing for borders to reopen later this year if the 80% adult population vaccination requirement is reached. Anyone who has been closed for over 12 months, in hibernation or operating intermittently at a fraction of their size must plan how they will reopen.

They must grapple with issues like staff access and retraining in new COVID-safe protocols, how much they spend on replenishing food and beverage stocks, whether they renovate and refurbish all their rooms that have been closed or just some, to replace or fix equipment and machinery, landscape overgrown gardens and set up a maintenance program for pools, buildings and seawalls.

If they were transfer providers with either vessels or vehicles; these too will need maintenance and completion of compliance requirements.

In addressing a range of Ease of Doing Business Reforms, the Budget also recognised the need to continue on-going efforts that have no doubt been appreciated by many other businesses and industries.

The further deferral of the VAT Monitoring System (VMS) to Jan 2024 makes practical sense that has been incentivised with businesses voluntarily implementing it is provided with a 300 percent tax deduction for associated costs.

Some initiatives announced to support the current limited cash flow challenges being agonised over by many, so tax penalty waivers on repayment of real tax through payment arrangements will be appreciated.

While others simply make sense, like the implementation and use of EFTPOS machines in all Government agencies where payments and fees are required to be made.

The budget gets reviewed in 6 months.

In the meantime, as Theodore Roosevelt said ” Do what you can, with what you have, where you are”.

By: Fantasha Lockington – CEO, FHTA (Published in the Fiji Times on 22 July 2021)