FHTA, 26 March 2020 – As we keenly await Government’s supplementary budget that we all hope will sufficiently address the devastating impact of COVID-19 on Fiji’s tourism industry and entire economy, there is massive uncertainty being felt by the tourism industry as every operator has now had to implement business survival plans for this unprecedented chain of events.
The World Travel & Tourism Council (WTTC) says up to 50 million jobs in the travel and tourism sector are at risk due to the current pandemic. In Fiji, with most of the nearly 40,000 tourism jobs being directly affected and 110,000 indirectly, tourism businesses here are also in a fight for survival. While the tourism industry has been the mainstay of the economy for the past 10-20 years, all businesses will suffer dramatically and some simply will not recover from this downturn as cash flow dries up.
Never has global tourism stared down such a bleak future. Despite our nation’s history with ferocious cyclones, disruptive floods or unexpected coups, we could never have foreseen as grim an outlook as we do today.
The Government’s preparation measures to contain the COVID-19 virus kicked into effect as soon as our first case was confirmed. In a swift and calculated move, the city of Lautoka was declared a no-go zone and cordoned off to enclose the infection and transmission to a localised area in keeping with international practices.
The next logical step to restrict movement in and out of the country evolved quickly with drastically reduced demand and thus both incoming and outgoing flights dried up with Fiji Airways slashing 95% of its international flights in the first 24 hours after the initial announcement.
For the country and the health of our nation’s citizens, this was the best possible move short of implementing more radical measures that may still be called upon while limiting all non-essential movement. Judging from other nations’ responses to the pandemic, Fiji has acted swiftly to contain the local transmission to a minimum.
At the time of writing, this global health disaster has already infected more than 420,000 people across the world, killing nearly 20,000. The death toll in Italy has now surpassed China and that is an alarming statistic.
While at the beginning, the fear of the virus slowly reduced the global travel market, the closed borders and worldwide travel bans have now ensured that Fiji’s international tourism industry has virtually completely shut down. Our main source of visitor arrivals – Australia and New Zealand – acted quickly to close their borders and now Australians are banned from overseas travel until further notice.
It is almost trite to say that without guests, there is no source of revenue for the operators. If the operators go bankrupt, they will not be able to recover and start operations again and this will impact future employment and economic activity. This means that the 110,000 jobs that directly and indirectly rely on the tourism sector, are now severely impacted by this extraordinary health crisis.
In the span of just over a week, nearly every single tourism operator has been forced to make the heartbreaking decision to save the businesses by implementing reduced hours or take owed annual leave initially, followed by leave without pay or laid off conditions for all permanent staff with almost temporary staff let go almost immediately. At the same time, operational cost cutting measures have been implemented while management staff are taking significant pay cuts as well. We are looking at job losses and significant unemployment or underemployment for an estimated 90% of the entire industry as well as supply chains that depend on tourism. This will also include farmers and communities that provide produce, food, entertainment, craft, activities and transportation for tourism. This will move on down the supply chains to mean that less spending is available which affects traders, small businesses, supermarkets, bars, restaurants and retail shops. As people are advised to move around less and have less spending money anyway, transportation networks will reduce based on less demand with buses, mini vans and taxis expected to see the effects of curtailed travel.
Small and medium sized businesses (SME’s) are expected to feel the effects first so we hope they do get generous incentives from Government to stay viable and be able to come out of this quickly.
FHTA’s recent member survey estimates that by the end of this month, 93% of all hotels & resorts,
cruise, dive, transport, tours and activity providers will have to close their doors because there are no
international tourists and the domestic market is not large enough to sustain the entire industry. The
most difficult part of the situation for all concerned is that nobody can be sure how long the closures will
last.
While we are hopeful that international tourism will resume in June there are some predictions that the
crisis may last 6 – 9 months or even longer. We are hopeful that the government will find a way to
cushion the blow and have provided our feedback on behalf of tourism operators and their staff. With
40% of our GDP dependent on tourism our overall recovery will depend on the outcome of the larger
economies as their recoveries will provide the required impetus for people to want to travel. As the MD
of Rosie Travel Group recently described it – this is a ‘black swan moment’.
As Governments around the world provide creative stimulus packages to boost their economies that
are feeling the drastic impact on no tourism, reduced workforces and closed commercial businesses,
Fijian businesses also await our own economic stimulus budget with high expectations.
FHTA hopes that the Supplementary Budget being delivered today will consider workers from all sectors
who have been laid off, on reduced hours or leave without pay so that they can pay bills, rents or
mortgages and buy food and medicine. We also hope that much needed assistance is provided to
businesses to stay afloat, reduce their operational costs and maintain their cash reserves to enable
salaries, rents and utility payments along with other commercial responsibilities like taxes, FNPF and
land leases. We believe that most businesses will find it extraordinarily challenging to make it through
this period without significant support from the government. We also know that that staff will be suffering
through this period and we are devastated as they are the heart and soul of tourism. On behalf of the
nation we plead with citizens to follow the government’s guidelines to reduce the spread so that our
people’s health is not affected.
We also believe that the virus pandemic will eventually pass and we need our tourism industry to be
able to be in a position to recover for the benefit of the economy and all Fijians. We call on all Fijians to
stand united and support one-another.
Dixon Seeto, FHTA’s past President was fond of saying, “”Imagine Fiji without Tourism”” and we may
just about get a glimpse of this, soon enough.
By: Fantasha Lockington – CEO, FHTA
Published in the Fiji Times on 26 March 2020
