FHTA Tourism Talanoa: Protecting Those Green Shoots

FHTA Tourism Talanoa: Protecting Those Green Shoots

FHTA, 7 April 2022 – Traditionally the beginning of April usually signals the end of tourism’s quiet period as the industry gears up for the start of the annual busy period or ‘peak season.’

Coinciding with the end of the first three months of a new year (and failed resolutions), the catching up with repayments of maxed-out credit cards over the sillier season, then the first lot of school holidays and a long Easter weekend; the picking up of travel activity in 2022 for Fiji is also when many more resorts are now ready to throw open their doors and welcome visitors back to a refreshed and renewed list of tropical holiday escapes.

For domestic travellers, returning residents as well as international visitors.

The weather starts to move away from the hot, wet, stickier months to drier, longer spells of sunnier days with temperatures easing off to lower 30 or the mid to higher 20 degrees. And with any luck will continue to reduce to more comfortable levels. (pragermetis.com)

There is a slowly reducing nervousness about cyclonic weather, and a general increase in activity for hire, supplies, and all manner of fun being planned that can be had with combinations of sun, sand and water.

And then there is entertainment and event planning activity also planned that can start from sunset to sunrise to suit every budget and deliver the most unforgettable holiday.

By this time, every mechanical engine, electrical equipment or compressor has been temperature and humidity tested, fixed or replaced and anything that might have threatened to or fallen apart has probably picked any one of the past 3 hottest, wettest and most humid and most stressful months to have done so.

So right now, the industry is looking its shiniest best with the huge effort of reopening now behind them, repairs and refurbishing completed and COVID restrictions and requirements easing off, and 4 months of consistent staff training and upskilling ready to pay off.

And as with Climate Change directly affecting our weather patterns and seasons, so too has COVID caused a slight, but noticeable shift in our traditional peak and off-peak seasons.

No doubt caused by pent up demand from source markets that initially had fewer holiday options to choose from and even fewer appear to have COVID under wraps with a fiercer focus on “getting on with business”; the low season was higher than expected and the high season looks to have started a little earlier.

Time will tell if we have got the measure of this shift and whether this will be simply a border reopening adjustment or here to stay for the longer term.

But if there’s one thing that you can say about Fiji’s tourism industry, it is that it never stays surprised at anything for long, because years of resilience teach you to adapt quickly and take it all in stride.

Every good, bad and ‘what the?’ moment appears to have been dealt with in the last 2 years and counting.

It is in this current frame, therefore, that we recently met with the Governor of the Reserve Bank of Fiji (RBF) and his team to provide some feedback and hear his reflection on where we were with a quick snapshot of where it looks like we’re heading.

Economic green shoots are evident in the country right now, with Fiji on track to recovery with the worst of the pandemic behind us.

A highly vaccinated population, easing of COVID restrictions, no (expected) devaluation, borders reopening and tourism kickstarting amongst other activities, have all contributed to a pickup in consumption and retail activity.

The pandemic wiped out around nine years of growth, but the experts are optimistic about Fiji’s growth and this was echoed by economists adding their voices to the post-budget contributions.

The RBF says we’re in a time of Fiscal Trilemma in which policymakers are struggling to balance national spending, debt levels and equitable taxes.

Not at all difficult to grasp how challenging this must be to achieve balance in the current environment and make the population at large happy that the increasing cost of living is being addressed while assuring the taxpayers and the many industry stakeholders that their businesses will be able to thrive and grow.

For tourism, there is a collective appreciation for the suite of incentives that was required to get the industry reopening ready, that included the reduced departure tax, removal of Service Turnover Tax (STT) & Environment & Climate Adaptation Levy (ECAL), Short Life Investment Package (SLIP) extensions and wider scope, the waiver of departure tax on 72-hour stays & the removal of Family Care Leave & Paternity Leave amongst others.

So the change to 15% VAT from 9% if you were a smaller operator (and therefore not paying the STT & ECAL with a turnover of below $3m) or a larger operator moving from 14% (9% VAT + 5% ECAL) to 15% VAT, with only a few days to decide whether you were going to charge your customers (and upset years of wholesaler and supplier confidence) or wear the difference (coming off 2 years of little to no revenue) was still a jarring impact whilst being reminded to take into consideration those incentives mentioned, with the wider impact of a realigned VAT change to 15%.

Any changes, we have said often enough, are always easier to assimilate into business practice if given sufficient time to work through, adapt to and incorporate into complex supplier contracts and delivery systems.

Especially as these support critical supplier networks that Fiji relies on to on-sell our products and services to overseas, who are governed by their consumer laws.

We hope they persevere with us because coming on the heels of this sudden tax change is another change to how our visitors book their 2nd day Rapid Antigen Tests (RAT) before departing for Fiji.

With the removal of the 3-night mandatory stay in a hotel that has been widely welcomed, effective from the 7th of April, all visitors will be required to book and pay for their tests online and show confirmations of these along with their vaccination status, their pre-departure COVID test results and their travel insurance when checking in for their flights to Fiji.

As global travel moves back into its faster-paced practice and travel restrictions reduce, the pre-departure requirements and the post-arrival requirements around testing need to be reviewed in line with global practice and health advice moving in tandem.

We understand Fiji’s need to be early in the detection of new variants, and our continuing need to keep testing everyone – before they arrive after they’ve arrived and again before they leave. So what is our plan if we do detect said variants?

Having seen the green shoots of economic recovery the RBF discusses; will we consider shutting down again with the confirmation of new variants that have been advised as the reason for the constant testing of Fiji’s inbound travellers?

Or will we reimpose previous travel restrictions swiftly?

What is certain is that we should be prepared for how we are to react as an industry, and as a country or all, these often onerous requirements are moot.

With all the effort that is being put in to get those green shoots going, we should be working on how we keep those emerging shoots alive and growing and quickly recognise and pull out the unnecessary weeds that threaten them.

By: Fantasha Lockington – CEO, FHTA (Published in the Fiji Times on 7 April 2022)