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1、Pacific TourismThe Future ofMarch 2023Public Disclosure AuthorizedPublic Disclosure AuthorizedPublic Disclosure AuthorizedPublic Disclosure AuthorizedB THE FUTURE OF PACIFIC TOURISM MARCH 2023Cover Image:The Drua Experience,FijiInside Cover mage:PalauTHE FUTURE OF PACIFIC TOURISM MARCH 2023 1 2023 I
2、nternational Bank for Reconstruction and Development/The World Bank 1818 H Street NW Washington DC 20433 Telephone:202-473-1000 Internet:www.worldbank.org This work is a product of the staff of The World Bank with external contributions.The findings,interpretations,and conclusions expressed in this
3、work do not necessarily reflect the views of The World Bank,its Board of Executive Directors,or the governments they represent.The World Bank does not guarantee the accuracy,completeness,or currency of the data included in this work and does not assume responsibility for any errors,omissions,or disc
4、repancies in the information,or liability with respect to the use of or failure to use the information,methods,processes,or conclusions set forth.The boundaries,colors,denominations,and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning
5、 the legal status of any territory or the endorsement or acceptance of such boundaries.Nothing herein shall constitute or be construed or considered to be a limitation upon or waiver of the privileges and immunities of The World Bank,all of which are specifically reserved.Rights and Permissions The
6、material in this work is subject to copyright.Because The World Bank encourages dissemination of its knowledge,this work may be reproduced,in whole or in part,for noncommercial purposes as long as full attribution to this work is given.Please cite the work as follows:“World Bank.2023.The Future of P
7、acific Tourism”.SupportThe report received support from the World Bank Group Partnership Fund for the Sustainable Development Goals,and the Pacific Facility,a multidonor trust fund that the World Bank administers and the governments of Australia and New Zealand support.DesignTitanium Room for the Wo
8、rld BankCover Image Credit Island Encounters Photography The Drua Experience,Fiji VOU Fiji Dance Company 2 THE FUTURE OF PACIFIC TOURISM MARCH 2023Image:Marshall IslandsAcknowledgementsA World Bank team from the Finance,Competitiveness,and Innovation(FCI)Global Practice led by Antoine Coste(Senior E
9、conomist),Jessie McComb(Senior Private Sector Specialist),and Blair Lapres(Economist)and consisting of Jennifer Bartlett(Senior Consultant),Andrew Beath(Senior Economist),Alba Suris(Analyst),and Jessica Wilson(Consultant)prepared this report.The team worked under the guidance of Stephen Ndegwa(Count
10、ry Director for Papua New Guinea and the Pacific Islands),Hassan Zaman(Regional Director,East Asia and the Pacific),and Cecile Niang(Practice Manager,FCI).The report also benefited from advice from Martha Licetti(Practice Manager,Markets,Competition,and Technology),Alvaro Gonzalez(Lead Economist,FCI
11、),Louise Twining-Ward(Senior Private Sector Specialist,FCI),Kim Edwards(Senior Economist,Macroeconomics,Trade,and Investment),Vincent Palmade(Lead Economist,FCI),Becky Last(Operations Officer,International Finance Corporation),Sara Currie(Tourism Specialist,Asian Development Bank),and Stephen Pratt(
12、Professor of Tourism and Hospitality Management,University of the South Pacific).The team is thankful for the colleagues who supported and provided input for this work,including Giorgia Demarchi(Senior Social Development Specialist,Gender),Matthew Dornan(Senior Economist,Social Protection and Jobs),
13、Dimitria Gavalyugova(Extended-Term Consultant,Gender),David Gould(Program Leader),Shohei Nakamura(Economist,Poverty and Equity(POV),Taufik Indrakesuma(Economist,POV),Kasia Mazur(Environmental Economist,Environment Nature and Blue Economy),Chris Miller(Senior Private Sector Specialist,FCI),Darian Nai
14、doo(Economist,POV),Sara Diane Turner(Extended-Term Consultant,Latin America and the Caribbean Sustainable Development),and John Perrottet(Consultant,FCI).The team is grateful for the time and insights that the public and private sector representatives of the tourism sector across the region provided
15、.THE FUTURE OF PACIFIC TOURISM MARCH 2022 3 List of Acronyms4 THE FUTURE OF PACIFIC TOURISM MARCH 2023CAGR Compound annual growth rateFJD Fijian dollarFSM Federated States of MicronesiaGDP Gross domestic productGST Goods and services taxICT Information and communications technologyIFC International
16、Finance CorporationIVA International visitor arrivalsIVS International visitor SurveyMBIE New Zealand Ministry of Business,Innovation and EmploymentMSME Micro,small and medium-sized enterprisesNTO National tourism organizationPNG Papua New GuineaPIC Pacific Island countryPPP Public-private partnersh
17、ipRMI Republic of the Marshall IslandsTVET Technical and vocational education and trainingSIDS Small island developing statesSME Small and medium-sized enterprises USD United States dollarVAT Value-added tax ContentsTHE FUTURE OF PACIFIC TOURISM MARCH 2023 5Acknowledgements3List of Acronyms4Key Mess
18、ages7Executive Summary8The Boom of Pacific Tourism and COVID-19s Impacts10Obstacles to Expanding Pacific Destinations Presence in High-Value Markets 11Policy Priorities for Competitive and Sustainable Pacific Tourism12Introduction17Chapter 1:The Boom of Pacific Tourism and COVID-19s Impacts231.1.Tou
19、risms Contribution to Economic Development in the Pacific231.2.Differentiating PICs as Tourism Destinations331.3.Strategic Tourism Market Segmentation in the PICs381.4.Potential Benefits of Targeting High-Value Markets for the PICs44Chapter 2:Obstacles to Expanding Pacific Destinations Presence in H
20、igh-Value markets472.1.Uncoordinated Tourism Development Efforts472.2.MSMEs Fragility Threatens Tourism Competitiveness and Diversity502.3.Inadequate Skills Inhibit Tourism Value Creation542.4.Limited Progress Towards Environmentally Sustainable Tourism552.5.Vulnerability to Climate Change and Natur
21、al Disasters59Chapter 3:Policy Priorities for Competitive and Sustainable Pacific Tourism633.1.Improving Tourism Governance663.2.Refocusing Destination Development723.3.Building Human Capital in the Tourism Workforce783.4.Mainstreaming Resource Efficiency and Resiliency in Destinations81Conclusion85
22、Annex A:Tourism Typology and Country Characteristics87Annex B:Methodological Notes93Annex C:Overview of Recent Tourism Development Strategies in the PICs109Annex D.Implementation Tools for Policy Reform and Destination Management111References112 6 THE FUTURE OF PACIFIC TOURISM MARCH 2023Image:SamoaT
23、HE FUTURE OF PACIFIC TOURISM MARCH 2023 7Key Messages Tourism has been and remains an important element of Pacific Island countries(PICs)growth strategies.International arrivals to the 11 countries covered in this report doubled between 2000 and 2019,reaching an all-time high of 1.5 million(1.8 mill
24、ion including cruise ship and day visitors).In a region with major structural obstacles to growth and few opportunities for diversification,tourism growth has been a key source of foreign exchange,income,tax revenue,and jobs in most PICs and has contributed to reducing poverty.In 2019,tourism genera
25、ted USD 2.4 billion in receipts(more than 10 percent of gross domestic product in seven of these countries)and directly employed approximately 71,000 people through formal jobs and many more through informal and indirect jobs that the sector supports.Although they face some common challenges,PICs ar
26、e at very different levels of tourism development because they have different characteristics,endowments,and levels of government support,and priorities to expand the sector will be country specific.At the same time,tourism growth has increased PICs vulnerability to shocks affecting the sector.COVID
27、-19 has been the worst crisis affecting the sector,with severe economic and social consequences.With the collapse of international arrivals,tourism receipts in PICs were down 81 percent in 2020 from the previous year and dropped further in 2021 as borders remained closed across the region.Estimates
28、developed for this report suggest that adverse developments in the tourism sector accounted for one-quarter to half of the poverty increase between 2019 and 2020 in Fiji,Kiribati,and Vanuatu.Although tourism had resumed in most PICs by October 2022,the industry will need time to recover fully.Increa
29、sing resilience in the Pacific tourism sector and fostering economic diversification remain priorities,especially given PICs exposure to the harms of climate change.Ensuring that reforms and investments made to support tourism growth provide economic and social benefits beyond the sector is essentia
30、l to broaden the gains and enhance resilience.Targeting high-value markets would enhance tourisms economic impacts while minimizing environmental and social harms.At USD 1,226 on average,receipts per arrival were only 3 percent higher in 2018 than in 2012.Calculations performed for this report sugge
31、st that,even with fewer total arrivals,targeting higher-value markets could yield aggregate revenue 5 to 20 percent higher than by following a volume-led strategy.PICs have identified policy objectives to increase value from tourism and can compete in several high-value segments(e.g.,luxury tourism,
32、adventure tourism,diving,cultural tourism,long-stay tourism),but attracting travelers in these segments will require targeted policy decisions to attract private investment;improve infrastructure and public facilities;and adjust destination positioning,marketing,and tourism offerings.Although most P
33、IC governments share core goals of developing higher-value tourism that is also more economically and socially inclusive,sustainable,and resilient,more efforts will be needed to translate these goals into concrete policy action.Over the two decades preceding the COVID-19 pandemic,tourism became one
34、of the most important drivers of economic growth across the Pacific.Faced with a unique set of structural constraints on economic development(particularly those related to scale and remote geography),the 11 Pacific Island countries(PICs)examined in this study(Federated States of Micronesia,Fiji,Kiri
35、bati,Palau,Papua New Guinea,Republic of Marshall Islands,Samoa,Solomon Islands,Tonga,Tuvalu,Vanuatu),1 have increasingly relied on tourism to generate revenue and employment where opportunities for other sectors are limited.At the regional level,arrivals grew 3.6 percent per annum on average over th
36、e two decades preceding the pandemic and reached an all-time high of approximately 2 million arrivals in 2018(including cruise ship visitors).Although the nature and scale of the sectors development have varied between countries,each PIC has made international tourism an important element of its dev
37、elopment strategy.With its undeniable economic contribution,tourisms growing importance has also increased the PICs reliance on the sector and exposure to shocks affecting it.This reliance also raises questions about the extent to which tourism,and the investments and reforms made to support its gro
38、wth,have had broader economic impacts beyond the sector.The COVID-19 crisis had a devastating impact on tourism in the Pacific with severe and potentially durable economic and social consequences.The pandemic has been the worst crisis in the history of modern tourism,with small island developing sta
39、tes(SIDS)including PICs,especially hard hit(World Bank 2020a;UNWTO 2020a).COVID-19 brought international travel to and from the Pacific to a standstill in March 2020 for more than two years.It is estimated that international visitor spending in PICs declined by about 81 percent in 2020,more than in
40、most other SIDS,and kept falling in 2021.This had dramatic economic and social impacts on firms and workers that rely on tourism,and relief measures that some PIC governments adopted have only partially offset this.The crisis pushed many people into poverty,particularly in tourism-reliant countries
41、such as Fiji and Vanuatu.Although most PICs had reopened their borders to international visitors by October 2022,and leaders such as Fiji and Palau are experiencing robust recovery,the sectors prolonged closure is likely 8 THE FUTURE OF PACIFIC TOURISM MARCH 2023Executive Summary1 Although PNG is no
42、t usually classified as a PIC,it is covered in this study and included when referring to the PICs.Other PICs and territories also have notable tourism industries(e.g.,Cook Islands,French Polynesia,Guam,Northern Marianas,New Caledonia)but are not covered in this report because they are not World Bank
43、 members.Nauru,a World Bank member,is considered a PIC but is not studied here because of its limited tourism assets,low tourist volumes,and lack of sector data.2 The update to the PIC9 systemic country diagnostic covers FSM,Kiribati,Nauru,Palau,RMI,Samoa,Tonga,Tuvalu,and Vanuatu.to leave long-lasti
44、ng marks.In particular,some firms,especially small and medium-sized enterprises;jobs;and skills may not come back,even when aggregate demand recovers.This study takes a fresh look at tourisms role in development in the Pacific;its future after COVID-19;and the scope to foster a green,resilient,compe
45、titive,and inclusive sector.As the crisis subsides,tourism is likely to reemerge as a key driver of economic growth and source of livelihoods for PICs,despite differences in recovery pathways across the region.Moreover,COVID-19 recovery provides an opportunity to address preexisting challenges relat
46、ed to Pacific tourisms economic,social,and environmental impacts.Although most PIC governments share objectives of developing higher-value,more-inclusive,sustainable tourism sectors,concrete progress has been limited,and efforts to regain visitor numbers quickly without addressing underlying constra
47、ints could slow progress.This study was a core input to the World Banks recent update to the Systematic Country Diagnostic for nine PICs,which highlights sustainable tourism as a key economic opportunity for development in these countries.2 It complements and builds on the 2016 Pacific Possible repo
48、rt,which assessed opportunities to increase arrivals in a context of rapid tourism growth by considering changes to the industrys model that could maximize tourisms economic,social,and environmental benefits for Pacific Islanders.This study does this by(i)taking stock of the evidence on tourisms his
49、torical contribution to development in the PICs and of the COVID-19 crisis impacts,(ii)analyzing current obstacles and potential opportunities for a more competitive and sustainable Pacific tourism,focusing on selected issues key to target higher-value markets,and(iii)recommending policy priorities
50、and investment needs to(re)position the Pacific tourism model for the future and broaden its benefits,focusing on competitiveness,environmental sustainability,resilience and inclusiveness.Given the scarcity of data on Pacific tourism and frequent discrepancies between sources,one of the studys main
51、contributions is to provide a detailed quantitative assessment of the sector and its economic impacts,for instance on jobs,poverty,and public revenue,based on an extensive data-collection,cross-checking,integration exercise.THE FUTURE OF PACIFIC TOURISM MARCH 2023 9Image:Vanua Levu,FijiCredit:Elliot
52、 Wright10 THE FUTURE OF PACIFIC TOURISM MARCH 2023The Boom of Pacific Tourism and COVID-19s Impacts Tourism had become a major economic sector in the years before the pandemic.Despite the paucity of detailed tourism data in the Pacific,evidence reveals tourisms large and growing contribution to grow
53、th and development in most PICs over the last two decades.Tourism receipts for PICs were growing at more than 5 percent per annum before the pandemic,from USD 1.5 billion in 2010 to USD 2.4 billion in 2019,at which point they accounted for more than 10 percent of gross domestic product(GDP)for seven
54、 of the 11 studied PICs.This proportion was among the highest for Fiji,Palau,Samoa,and Vanuatu approximately 25 to 35 percent of GDP making them some of the most tourism-dependent countries in the world.The economic value of tourism extends beyond direct receipts,since many economic activities,such
55、as agriculture,construction,and manufacturing,are indirectly associated with tourism and travel.Available data suggest that the total contribution of travel and tourism to GDP in PICs was well above the world average in 2019(especially for Fiji and Vanuatu)albeit lower than the averages for SIDS in
56、other regions,including the Caribbean and Indian Ocean.Although Pacific tourism supply chains depend on imports for many inputs,like other sectors of the economy,there is evidence of growing linkages with local food producers in several PICs,broadening the sectors impact and enhancing its inclusiven
57、ess.Likewise,local firms have generally captured a sizeable share of the income that Pacific tourism generates,and foreign players have contributed to the sectors development.Tourism growth has generated many direct and indirect jobs in the Pacific.Before the pandemic,tourism directly employed appro
58、ximately 71,000 people in formal jobs across the PICs,including a larger proportion of women than their share in PICs labor forces.It directly represented approximately 26 percent of the formal workforce in Palau,followed by Vanuatu,Fiji,Tonga,and Samoa,where tourism jobs accounted for eight to 11 p
59、ercent of direct employment.The quality of local tourism jobs varies within countries,with wages and other benefits depending on the size and sophistication of the employer.Beyond formal direct jobs,tourism supports many informal direct jobs,for which no official estimates exist.Moreover,tourism ind
60、irectly supports many jobs(e.g.,providers of goods and services such as agricultural products in tourism businesses supply chains).The available data suggest that,before the pandemic,total employment in PICs relied less on travel and tourism than in other SIDS,particularly in the Caribbean,where the
61、se sectors supported almost half of the jobs.That said,tourism directly or indirectly supported an estimated 88,200 jobs one-quarter of total national employment in Fiji alone in 2019.Tourism jobs and income have helped reduce poverty in PICs in the years before the pandemic.There is evidence from t
62、he global literature that tourism can significantly reduce poverty.An elasticity analysis using the latest household surveys in several PICs suggested that a 1 percent increase in tourism sector GDP between 2016 and 2019 was associated with reductions in poverty by 0.68 percent in Fiji,0.074 percent
63、 in Vanuatu,and 0.078 percent in Kiribati.3 This is consistent with previous assessments that the fast growth of tourism-related service sectors and linked job creation have been a major source of poverty reduction in Fiji in recent decades(World Bank 2017a).In addition to direct and indirect privat
64、e revenues,tourism has become an increasingly essential source of tax revenue for PIC governments.In Fiji,tourism was among the largest sources of revenue for the state before the pandemic,generating about Fijian dollars(FJD)1 billion(USD 452 million)annually,about 28 percent of total revenue in 201
65、9/20.Although lower in absolute terms in other PICs,various sectoral taxes(e.g.,airport departure taxes and arrival fees,turnover and bed taxes,site user fees)and value-added tax(VAT)or goods and services taxes(GSTs)from tourism contribute significantly to public budgets.Beyond the regional picture,
66、PICs are at very different levels of tourism development because they have different characteristics,endowments,and levels of government support.Although they share key traits that have influenced how they have emerged as tourism destinations,critical country-specific factors have also influenced th
67、e nature and scale of the sector,including size,location and accessibility,historical and strategic ties,and tourism assets.This study proposes a typology to classify PICs in four categories of Pacific destinations that can be used to identify the most relevant policy priorities for each.COVID-19 de
68、alt a major blow to Pacific tourism,disproportionately affecting the economies most reliant on the sector.Although COVID-19 is not the first shock to affect tourism in the region,where political crises and natural disasters have led to temporary declines in international arrivals on several occasion
69、s in the past,it is the largest on record and could prove the most durable.With the onset of the pandemic and the subsequent collapse of arrivals,tourism receipts in PICs were approximately 81 percent lower in 2020 than in 2019.Fiji,which accounted for more than half of aggregate receipts in 2019,fa
70、ced the largest losses in absolute terms,although smaller economies also suffered significant losses.Given the continued border closures in 2021,receipts are expected to have been even lower that year.Public finances have faced a large shortfall in tourism taxes and a decline in VAT and GST receipts
71、,which can partly be attributed to the sectors collapse.The crisis has resulted in a dramatic decline in tourism employment across PICs that persisted while borders remained closed.In turn,this has severely affected livelihoods and increased poverty rates in tourism-reliant economies,accounting for
72、one-quarter to half of the poverty increase in Fiji,Kiribati,and Vanuatu between 2019 and 2020.Targeting higher-value market segments based on PICs comparative advantages would increase the economic value of tourism,support PICs development 3 Based on the upper-middle-income poverty line of USD 5.5
73、per capita per day in 2011 purchasing power parity terms.THE FUTURE OF PACIFIC TOURISM MARCH 2023 11agendas,and reduce negative environmental and social externalities.Increasing the value,sustainability,and inclusivity of the tourism sector is a dominant theme in all PICs tourism strategies and poli
74、ces,with a focus on generating revenue from higher-spending tourism markets.Nevertheless,although average spending per arrival varies according to country,most PICs have not managed to increase such spending significantly over the last decade.A few PICs have developed viable high-volume market segme
75、nts,but all PICs can compete and increase their presence in various high-value segments(e.g.,luxury tourism,adventure tourism,diving,cultural tourism)(Box ES1).Such segments,which are driven by destination and product uniqueness,have higher levels of spending per trip,prioritize sustainability,and c
76、an have more inclusive spending.They are therefore particularly attractive for PICs;but attracting travelers in these segments will require targeted efforts to adjust destination positioning and marketing and tourism offerings.Targeting higher-value tourism markets is a shared objective of tourism p
77、olicy makers and businesses in PICs,but policies and metrics have often focused on increasing arrivals,even though simple numerical simulations conducted in this report suggest that welcoming fewer,higher-value tourists could yield higher total revenue in PICs over time,with fewer negative externali
78、ties.Box ES1.Summary of Tourism Market Segmentation in the PacificVolume markets in Pacific Island countries(PICs)center on sun and sand,family,and cruise markets.A need for relaxation,rejuvenation,and spending time with family motivates visitors,who are typically price sensitive.High-value markets
79、in PICs include luxury tourists(couples,honeymooners,wedding,and wellness markets),long-stay tourists(digital nomads,retirees)and experiential or niche tourists,including adventure tourists,diving,and cultural tourism.Destination branding and unique experiences available drive these markets.Word of
80、mouth,social media,and in the Pacific,trusted tour operator recommendations are strong influences.A friendly regulatory environment for visas,taxation,and land ownership;good information and communications technology infrastructure;and robust health care also motivate long-stay tourists.PICs have th
81、e opportunity to leverage trends in high-value experiential tourism to increase revenues from tourism arrivals.A 2019 market research study identified three segments of Pacific adventure and cultural travelers Adventure Intensives,Experience Samplers,and Cultural Explorers(IFC 2019a)that together ac
82、count for almost 20 percent of Australian and 29 percent of U.S.online,travel consumers who are motivated to travel for specific interests.Similarly,recent World Bank consumer research on three key European outbound markets(Germany,Sweden,United Kingdom)identified five market segments amongst travel
83、ers(World Bank 2022a).Three of these segments,which account for 66 percent of respondents,focus on nature-based and sustainable tourism and are the highest spending of all traveler types.These travelers tend to participate in more activities,are more likely to purchase local goods and services,and h
84、ave greater interest in nature-based experiences.Tapping into these markets will require changes to PICs marketing strategies updating and expanding distribution channels;increasing the supply of active,nature-based experiences;and enhancing communication.Both research studies reveal that market seg
85、ments that purchase goods and services from a broad range of local micro,small,and medium-sized enterprises can drive high-value tourism.In both studies,market segments were developed based on psychographic models that consider motivations for travel,personality traits,and travel behaviors.They reve
86、aled that high-spending tourists seek unique experiences,desire connections with local communities and businesses,engage in travel as a way to learn,and engage in sustainable practices.This highlights an important difference between high-value tourism and high-end or luxury tourism,which may have mo
87、re limited impacts on local economies.Obstacles to Expanding Pacific Destinations Presence in High-Value MarketsTo achieve their goal of attracting more high-value tourists,PICs must identify binding constraints and priority actions for governments and businesses.The objective to refocus the sector
88、on these segments has met limited success so far,due notably to(i)uncoordinated tourism governance,policy and management,(ii)limited tourism offerings and weak ecosystems of tourism service providers,including MSMEs,(iii)low availability of skills needed in high-value markets,(iv)the still limited a
89、doption of resource efficient and environmentally-friendly practices by tourism businesses,and(iv)the vulnerability of tourism businesses to natural disasters.Although these challenges do not cover all the structural constraints undermining tourism development in the Pacific,4 they were selected as
90、particularly relevant to the objective of targeting high-value markets based on research and consultations with tourism stakeholders in PICs.4 These challenges include connectivity,land rights,security,health,and preservation of ecosystems,which are analyzed elsewhere or require country-specific ana
91、lysis outside the scope of this regional report.12 THE FUTURE OF PACIFIC TOURISM MARCH 2023To maintain and increase tourism expenditures per arrival,it will be essential to ensure that a diversity of tourism facilities and services are provided locally by facilitating private sector growth,including
92、 of MSMEs.The entry of many new MSMEs before the pandemic has enriched the offering of tourism services and the quality of visitor experiences,making PICs more attractive as destinations,but structural challenges,including business environment constraints such as burdensome business regulations,poor
93、 hard and soft infrastructure,and lack of access to finance and skills have undermined entrepreneurship and business growth.Moreover,the COVID-19 shock disproportionally affected tourism MSMEs,which led many to close or switch to other activities and sell assets.The financial position of many touris
94、m MSMEs has been significantly undermined and could remain fragile even after reopening.The ability of Pacific MSMEs to recover fully,invest in new and better services,and adapt to structural industry trends,including digitization,will be key to competing in higher-value markets,maintaining visitor
95、satisfaction,and increasing spending.Simulations suggest that seemingly small decreases in visitor satisfaction can lead to significant losses in tourism revenue over time.To cater to higher-value segments,the Pacific tourism industry requires specialized skills,which are often in short supply local
96、ly.Several factors can explain local skills shortages affecting Pacific tourism businesses,including restrictions on recruiting expatriates,lack of basic and advanced education,and occupational migration.COVID-19 has heightened skill constraints in the Pacific tourism sector.Public and private inves
97、tments in specialized vocational training programs could help improve local skills that the industry needs,complementing other policies that may be needed in different PICs(e.g.,public investment in basic education,reform of migrant worker programs,relaxation of restrictions on expatriate recruitmen
98、t).Investments should be guided by international best practices and carefully designed,because there is no guarantee that their benefits will justify the investment cost.Minimizing tourisms negative environmental impacts and mainstreaming sustainable tourism can help PICs preserve their fragile ecos
99、ystems and gain a competitive edge in high-value markets.Like in other regions of the world,there are cases of poorly managed environmental impacts of tourism in the Pacific,which harm the environment and assets for PICs tourism offerings.Many Pacific tourism businesses rely on high-cost,high-impact
100、 energy sources,water supply,and waste management practices,often for lack of access to better alternatives.In addition to their economic benefits,greener practices and resource efficiency can help attract ecofriendly travelers willing to pay a premium for sustainable tourism experiences and generat
101、e broader economic,social,and environmental benefits.Despite these potential benefits,businesses and governments in PICs have struggled to invest in resource 5 Although short-term measures to solidify and broaden the recovery from COVID-19 may be required in PICs,recommendations on this have been co
102、vered extensively in other publications and are not repeated here.efficiency at scale,although numerical simulations show that there are profitable investment opportunities in energy,water,and material efficiency for different categories of Pacific tourism businesses.Natural disasters,which climate
103、change is exacerbating,will continue to affect the sector and test its competitiveness,highlighting the need for more investment in resilience.Tourism MSMEs often lack the awareness,knowledge,technical capacity,and financial resources to reduce their exposure to disaster and climate risks by making
104、such investments.Governments have an important role to play in fostering more-resilient tourism sectors by adopting measures to reduce exposure(e.g.,investment in resilient infrastructure,land-use planning and zoning,adoption,and enforcement of building codes)and manage the residual risk(e.g.,early-
105、warning systems)and helping firms and workers recover quickly from shocks.Establishing a stronger evidence base regarding potential long-term benefits of investment in resilience,which this report attempts to illustrate with simulations for several PICs,can help unlock public and private funding.Pol
106、icy Priorities for Competitive,Sustainable Pacific TourismPICs have long strived for a more-valuable tourism industry and can leverage recovery from the pandemic as an opportunity for reset.To do so,they must prioritize policies and investments that address underlying tourism sector market failures
107、and structural challenges that COVID-19 has exacerbated.Even before the pandemic,PICs struggled to implement strategies to enhance the sectors sustainability and attract higher-value tourists.Now,with additional pressures to regain visitor numbers and limited fiscal space,identifying and prioritizin
108、g the most effective policies and public sector investments is all the more critical.Moreover,to maximize tourisms role as a catalyst for development,stronger linkages between tourism development strategies,other national strategies(e.g.,poverty reduction,resilience),and efforts to address structura
109、l barriers to inclusive growth and economic diversification in PICs will be needed.This reports last chapter highlights four themes of policy challenges that must be addressed to add value in the tourism sector and create more competitive,sustainable,inclusive,resilient Pacific destinations in the m
110、edium to long term:5 These include:(i)Improving tourism sector governance,(ii)Refocusing destination development priorities to enhance service quality and market diversification,(iii)Enhancing skills and training in the tourism workforce,and(iv)Mainstreaming resource efficiency and resilience in the
111、 sector.Prioritization of these themes and their subcategory policy areas can be informed by examining them at a market segment level and identifying where policy reforms can benefit the development of THE FUTURE OF PACIFIC TOURISM MARCH 2023 13Figure ES1.Framework for Policy Intervention Prioritiza
112、tionmultiple market segments(Figure ES1).Targeted policies to strengthen tourism should be coordinated with efforts to address broader horizontal constraints on growth that are particularly problematic in PICs.Although the report attempts to distinguish policy priorities for PICs at different levels
113、 of tourism maturity,follow-up work and dialogue using country-specific data and information will be required to determine specific needs,depending on countries endowments,obstacles faced in tourism,and policy aspirations as expressed in national tourism strategies.Improving Sector Governance To ach
114、ieve meaningful change in the sector,PICs must establish a more-integrated institutional and policy framework for tourism.Several factors,including a mismatch between tourism authorities mandates and resources,the wide scope of regulatory areas relevant for tourism,and coordination failures(within t
115、he government and between the government and the private sector),partly explain the limited results of tourism strategies.Tourism policies and strategies can no longer be standalone documents with implementation left to tourism ministries and agencies.Across all types of PCIs,a new model should focu
116、s on(i)ensuring integrated policymaking through a strong“whole of government”approach,for instance anchored in permanent cross-ministerial tourism committees with high-level leadership and private sector engagement,and with a stronger role for ministries of finance/economy to coordinate reforms and
117、investments given tourism significant contributions to Pacific economies and public revenues;(ii)empowering national tourism authorities/offices and destination management organizations,notably by allocating appropriate resources to finance tourism policy and filling expertise gaps through partnersh
118、ips;and(iii)institutionalizing and strengthening mechanisms for ongoing public-private dialogue on tourism.Investing in data and digital technologies will be key for policy effectiveness.Although progress has been made in compiling sector statistics,lack of granular data on the supply and demand sid
119、es of tourism remains a major impediment to evidence-based policy making in PICs.This is a priority and offers avenues for cooperation between PICs,working with regional bodies such as the Pacific Tourism Organisation.Countries should aim to restart or launch international visitor surveys to collect
120、 data on existing markets and coordinate across regulatory and licensing agencies to create robust supply-side databases.National Note:Dark blue indicates critical areas of policy reform to stimulate and cater to demand from specific market segments,medium blue indicates important areas,and light bl
121、ue indicates moderatly important areas.14 THE FUTURE OF PACIFIC TOURISM MARCH 2023tourism authorities or marketing agencies should seek partnerships with market research firms,universities,and regional organizations to build market intelligence on new target markets.Strong leadership and a clear str
122、ategy for digital transformation has been shown to be an essential part of supporting a mindset shift in digital adoption.This means raising awareness of digital opportunities,establishing the building blocks for an inclusive digital data economy,and building capacity in the public and private secto
123、rs.Refocusing Destination Development Building on integrated tourism planning,the right measures can help PICs build diversified high-quality destinations that attract high-value tourists.To do so,the public and private sectors must work together to invest in targeted destination development through
124、 marketing and product development paired with consistent,transparent communication to markets.This should include a focus on:i.Product development and diversification:This is needed to respond to tourists demands for unique,high-quality experiences,for example by disseminating market intelligence,c
125、reating product development support programs,developing tour routes,making better use of quality standards,and managing protected areas using modern methods.ii.Enabling environment for firms and investors:This would include simplified business regulations,greater access to finance and payment servic
126、es,and streamlined firm entry and exit processes.Targeted measures to open markets for female entrepreneurs are also needed as they face specific constraints,including in terms of access to land and credit,regulatory obstacles,and access to government support schemes.Reforms in this area would addre
127、ss barriers to growth for tourism and other important sectors in the region.iii.Market diversification:This will require that destination management organizations invest in marketing to build awareness of the destination and its full offering in target markets and to communicate a consistent message
128、.Public relations campaigns may be needed for countries with less-developed tourism sectors or those with a poor image.Regulatory reforms,for instance on immigration and aviation policy,may also be required to tap into certain high-value and niche markets.6 Particularly for labor mobility programs t
129、hat build the skill base rather than undermine it.Enhancing Skills and the Workplace Environment Concrete action to address the skills shortage is necessary for Pacific tourism to shift to high-value markets and reduce economic leakage.Even before the pandemic,the Pacific tourism industry found it c
130、hallenging to source workers with the right types and quality of skills.The labor shortage that the pandemic caused has exacerbated this challenge across the region,decreasing firm productivity and increasing the cost of in-house training.Addressing these systemic,economy-wide challenges will requir
131、e a combination of skills development(e.g.,technical and vocational educational training with deeper industry involvement,market-specific skills,digital skills).Measures to improve the workplace environment to attract and retain workers must accompany interventions to address skill mismatches:better
132、 labor policy6 and reforms to promote respectful workplaces,for example by addressing risks of gender-based violence and sexual harassment.Mainstreaming Resource Efficiency and Resilience Enhancing tourisms resilience and resource efficiency will require a coordinated approach by governments,destina
133、tion management organizations,and the industry.Enhanced knowledge,especially on climate adaptation and resilience at the destination level,and strategic investment in essential services(e.g.,electricity,water,wastewater,and waste management),targeted policy and regulatory reforms(e.g.,circular econo
134、my,construction standards),and programs that encourage and equip the private sector to make sustainable investments must underpin this approach.These supply-side actions must also be paired with robust disaster preparedness planning and management.Policy recommendations made in this report focus on
135、high-level constraints that must be addressed across market segments,but this guidance represents only a starting point for PICs,each of which must examine its policy objectives economy wide and tourism specific to determine the best strategic segment to target and the most important policy actions.
136、This will need to be supported by deeper,country-specific analysis,which can be based on the models presented in the simulations included below,to provide the evidence-base and specific policy guidance to achieve greater value from each PIC tourism sector.THE FUTURE OF PACIFIC TOURISM MARCH 2023 15I
137、mage:Tuvalu16 THE FUTURE OF PACIFIC TOURISM MARCH 2023Image:Papua New GuineaTHE FUTURE OF PACIFIC TOURISM MARCH 2023 17The Pacific Island countries and Papua New Guinea face major structural challenges that have inhibited their ability to expand and diversify their economies.As illustrated in Map 1,
138、the 11 PICs examined in this study(Federated States of Micronesia(FSM),Fiji,Kiribati,Palau,Papua New Guinea(PNG),Republic of Marshall Islands,Samoa,Solomon Islands,Tonga,Tuvalu,Vanuatu),7 with a combined population of about 11.3 million people (8.8 million of which are in PNG)(Table 1),are scattered
139、 on hundreds of islands across the Pacific in an area equivalent to 15 percent of the globes surface.Lack of scale in the economies and limited access to markets,combined with high exposure to external shocks Introduction7 Although PNG is not usually classified as a PIC,it is covered in this study a
140、nd included when referring to PICs.Other PICs and territories also have notable tourism industries(e.g.,Cook Islands,Guam,Northern Marianas,New Caledonia,French Polynesia)but are not covered in this report because they are not World Bank members.Nauru,a World Bank member,is considered a PIC but is n
141、ot studied here because of its limited tourism assets,low tourist volumes,and lack of sector data.8 The study cited uses different country groups as comparators,including Asian low-income countries,Eastern Caribbean SIDS,and other small states.Map 1.Pacific Island Countries and Papua New Guinea(e.g.
142、,commodity price fluctuations,natural disasters and other climate-related hazards),partly explain why the level and growth of gross domestic product(GDP)and real income per capita in the Pacific has been much lower since the 1990s than in comparator countries(Khor,Tumbarello,and Kronenberg 2016).8 M
143、anufacturing-led development models have not worked in the region,given major constraints on production and trade.PICs export only a few natural resource commodities and agricultural and fishery products,relying on imports for fuel,food,and most other products.Much of the regions growth in recent ye
144、ars has come from the services sector,including tourism.THAILANDI N D O N E S I AA U S T R A L I ANEWZEALANDLAOP.D.R.TIMOR-LESTEPH IL IPPINE SNAURUNorthernMarianaIslands(U.S.)Guam(U.S.)NewCaledonia(Fr.)AmericanSamoa(U.S.)Niue(N.Z.)Cook Is.(N.Z.)French Polynesia(Fr.)Wallis-et-Futuna(Fr.)Pitcairn Isla
145、nds(U.K.)Hawaii(U.S.)PalmyraAtoll(U.S.)Jarvis(U.S.)Howland(U.S.)Baker(U.S.)FEDERATED STATESOF MICRONESIAFIJIK I R I BA T IVANUATUSOLOMON ISLANDSPALAUMARSHALL ISLANDSPAPUANEW GUINEATUVALUSAMOATokelau(N.Z.)TONGATHAILANDI N D O N E S I AA U S T R A L I ANEWZEALANDLAOP.D.R.TIMOR-LESTEPH IL IPPINE STONGA
146、NAURUNorthernMarianaIslands(U.S.)Guam(U.S.)NewCaledonia(Fr.)AmericanSamoa(U.S.)Niue(N.Z.)Cook Is.(N.Z.)French Polynesia(Fr.)Wallis-et-Futuna(Fr.)Tokelau(N.Z.)Pitcairn Islands(U.K.)Hawaii(U.S.)PalmyraAtoll(U.S.)Jarvis(U.S.)Howland(U.S.)Baker(U.S.)FEDERATED STATESOF MICRONESIAFIJIK I R I BA T IVANUATU
147、SOLOMON ISLANDSPALAUMARSHALL ISLANDSPAPUANEW GUINEATUVALUSAMOAN O R T H P A C I F I C O C E A NS O U T H P A C I F I C O C E A N160 E150 E140 E130 E160 E170 E150 E140 E130 E120 E110 E100 E180170 W160 W150 W180170 W160 W140 W130 W120 W30S10S20S30S40S10S20S010N20NIBRD 46680|JUNE 2022This map was produ
148、ced by the Cartography Unit of the World Bank Group.The boundaries,colors,denominations and any other information shown on this map do not imply,on the part of the World Bank Group,any judgment on the legal status of any territory,or any endorsement or acceptance of such boundaries.18 THE FUTURE OF
149、PACIFIC TOURISM MARCH 2023Between 2000 and 2019,tourism became one of the most important drivers of economic growth across the Pacific,generating revenue and employment,where opportunities for other sectors were limited.With few opportunities for PICs to enter global value chains,most of their gover
150、nments have seen tourism as a pathway to economic prosperity and have sought to capitalize on their natural and cultural endowments to develop the sector by adopting targeted policies and making needed investments.As international tourist arrivals grew across the region,so did financial receipts and
151、 GDP contribution,although the benefits have been uneven across PICs.As this report shows,tourism has made a substantial economic contribution to PICs overall,but growing dependency on the sector has increased these countries vulnerability to various shocks that can disrupt the sector,such as natura
152、l disasters and the COVID-19 pandemic.Another question that has become more relevant as tourism has grown is whether the policies adopted and investments made to foster this growth have benefitted other sectors and increased economic diversification.The COVID-19 crisis has had a devastating impact o
153、n tourism in the Pacific,with severe immediate impacts and likely durable consequences.The pandemic has been the worst crisis in the history of modern tourism,with small island developing states(SIDS)especially hard hit(UNWTO 2020a;World Bank 2020a).COVID-19 brought international travel to and from
154、the Pacific to a standstill in March 2020 for more than two years.It is estimated that international visitor spending declined by about 81 percent in PICs in 2020,more than in most other SIDS(PNG TPA 2022;SPTO 2021b;UNWTO 2022b).Tourism has now resumed across much of the region,and some Pacific tour
155、ism destinations could rebound fully by 2023 under an optimistic scenario(PATA 2022).Despite these positive trends,COVID-19s deep damage to global tourism value chains will continue to affect supply and demand for years.In PICs,the sectors prolonged closure is likely to leave long-lasting marks as m
156、any firms closed or transitioned to other activities and thousands of workers turned to alternative livelihood opportunities locally,notably in farming and fishing,or abroad.This means that some firms,particularly micro,small,and medium-sized enterprises(MSMEs);jobs;and skills may not come back even
157、 when aggregate demand recovers,with potential adverse impacts on tourism offering and PIC economies.As the crisis subsides,tourism is likely to reemerge as a key driver of economic growth and source of livelihoods for PICs,despite differences in recovery pathways across the region.In the context of
158、 a weak private sector especially in comparison with the heavy weight of the public sector in these economies tourism is an important source of tax revenue and foreign exchange.It is also a key source of much-needed jobs and income for Pacific islanders,including women and youth.It is one of the few
159、 sectors that can offer formal employment opportunities to low-and semi-skilled workers.In 2017,the Banks flagship report,Pacific Possible,estimated that,by 2040,PICs could reap an additional USD 1.7 billion in revenue annually and 116,000 jobs by boosting demand from certain high-potential markets(
160、Box 1).Although overall growth potential remains strong,sources of growth may diverge from pre-pandemic projections,especially as countries seek a more-sustainable and-valuable tourism future.As governments have a chance to reset their tourism sectors,some previous opportunities should be reconsider
161、ed.For example,focusing on market segment diversification(e.g.,adventure or wellness tourism)rather than specific source markets(e.g.,China)can reduce vulnerability to future demand-side shocks.Similarly,with greater focus on value per arrival and sustainability,volume cruise tourism may no longer b
162、e an attractive segment to develop.The report presents and prioritizes policy guidance that supports holistic tourism sector growth across a range of market opportunities(including most outlined in Pacific Possible)to foster sustainable economic gains.In the context of small economies like PICs,tour
163、ism development policies can also be leveraged to address broader cross-cutting constraints on economic transformation in terms of such factors as the quality of the investment climate,the state of the infrastructure,connectivity,and level of skills.Table 1.Land Area and Population RegionCountryLand
164、 area(km2)Population(thousands)MicronesiaFederated States of Micronesia702114Kiribati811118Palau46018Republic of the Marshall Islands18159MelanesiaFiji18,000890Papua New Guinea463,0008,776Solomon Islands28,000670Vanuatu12,000300PolynesiaSamoa2,800197Tonga748105Tuvalu2612Total526,72811,257Source:Worl
165、d Development Indicators(database).World Bank,Washington,DC(accessed November 2022),https:/databank.worldbank.org/source/world-development-indicators.THE FUTURE OF PACIFIC TOURISM MARCH 2023 19The COVID-19 recovery provides an opportunity to address Pacific tourisms preexisting challenges,although t
166、here are also risks.Many observers expect the pandemic to catalyze durable changes in the global tourism industry.At the global level,COVID-19 has reignited debates about the industrys economic,social,and environmental impacts,particularly under a volume-driven growth model,and its role in the fight
167、 against climate change.9 There have been calls to reimagine tourism by addressing its preexisting structural problems and rebuilding the industrys competitiveness in light of changes resulting from the pandemic(Destination Think 2020;IMF 2021a;UNDP 2020;UNWTO 2020b;World Bank 2020a).10 Similar deba
168、tes have been had about challenges faced in terms of competitiveness,inclusion,environmental sustainability,and resilience(UNESCAP 2020),many of which have been identified at least since the 1990s(Scheyvens and Russell 2009).11 During the crisis,Pacific stakeholders have emphasized the role of a sus
169、tainable,ocean-based tourism sector to build back better(Krishnamurthi 2020;SPREP 2020;Taylor 2020;UNESCAP 2020).Recent surveys in tourism-dependent PICs have revealed community aspirations for a reset of the regional tourism model to provide broader benefits to the local economy(Movono and Scheyven
170、s 2020).PICs have not taken specific action to chart a more-sustainable and-inclusive path for tourism growth.There is a risk that some policy makers will focus on short-term measures to increase visitor numbers to the pre-pandemic growth trend as quickly as possible.Although this is a justified obj
171、ective,particularly for less-developed PIC destinations that can still arguably develop the carrying capacity for more visitors,in the longer run,broader economic benefits would come from addressing the structural problems that limit the sectors capacity to enter higher-value markets and undermine e
172、conomic growth beyond tourism.This study takes a fresh look at tourisms role in development in the Pacific;its future after COVID-19;and the scope to foster a green,resilient,competitive,inclusive sector.It complements and challenges the previous analysis in Pacific Possible by factoring in the impa
173、cts of the pandemic and considering changes to the industry that could maximize economic value for Pacific Islanders,in line with the World Banks twin goals(eliminate extreme poverty,boost shared prosperity)and the Sustainable Development Goals.12 It also takes a holistic approach to analysis and po
174、licy guidance,identifying policy interventions that can stimulate demand in different high-value tourism markets while generating as much benefit for the broader economy as possible,enhancing the sectors resilience,and improving its sustainability.The study was a core input to the World Banks recent
175、 update to the Systematic Country Diagnostic for nine of the PICs,which highlights sustainable tourism as a key economic opportunity for development in Box 1.Pacific Possible Interventions and Long-Term ResultsThe Pacific Possible study examined opportunities in four tourism products and markets to
176、generate long-term transformational change for Pacific Island countries economies:Targeting the Chinese visitor market could add more than 650,000 tourists,bringing nearly USD 950 million in additional tourism receipts and generating more than 65,000 additional jobs.Engaging more directly in the gro
177、wing Pacific cruise industry by introducing a home-based cruise offering could add more than 250,000 tourists,generating an additional USD 60 million in tourism receipts and more than 4,000 additional jobs.Expanding high-end resort offerings could add more than 130,000 tourists,bringing more than US
178、D 450 million in additional tourism receipts,and generating more than 30,000 jobs.Expanding long-stay visitor options for retirees could add 10,000 resident foreign retirees,bringing USD 200 million in additional receipts and generating more than 13,000 additional jobs.Policy recommendations focus o
179、n increasing transportation connectivity by expanding and establishing markets,developing long-term markets,improving the investment climate and effectiveness of public sector participation,reducing barriers to travel(e.g.,visa regimes),and improving supply linkages with the tourism sector to increa
180、se efficiency and value(e.g.,agricultural linkages).Market-specific actions were also identified for each of the four opportunities.These interventions centered mostly on destination development(product development and marketing)and enabling environment recommendations and did not directly address w
181、ider tourism governance challenges and key enabling factors such as skills,resource efficiency,and resilience,which are examined in the present report.Source:World Bank 2017b.9 See Gsling and Higham(2021)for reflections on climate mitigation challenges in tourism and a vision for a low-carbon,resili
182、ent,inclusive tourism development model that increases domestic value creation while stabilizing or reducing arrivals.10 For instance,the United Nations World Tourism Organization encouraged tourism stakeholders to focus recovery efforts on six pillars:public health,social inclusion,biodiversity con
183、servation,climate action,circular economy,and governance and finance.11 As discussed in this report,key concerns include geographic concentration of tourism activity,limited diversity of products and markets,lack of entrepreneurship within the sector,“leakages”of tourism expenditures outside of PICs
184、,and limited linkages with domestic goods and services providers(IMF 2021a,37-40).12 See UNESCAP(2020)for a discussion of tourisms potential contribution to the Sustainable Development Goals.20 THE FUTURE OF PACIFIC TOURISM MARCH 202313 The update to the PIC9 Systemic Country Diagnostic covers FSM,K
185、iribati,Nauru,Palau,RMI,Samoa,Tonga,Tuvalu,and Vanuatu.14 On short-term priorities for recovery of tourism,see IMF(2021)and World Bank(2020).15 Such priorities include connectivity,land rights,security,health,and preservation of ecosystems.As discussed in Chapter 3,some have been analyzed elsewhere,
186、and others are too complex to cover in a regional report and require an in-depth,country-specific analysis.Box 2.Development Pathways Identified in the Systematic Country Diagnostic Update for Nine Pacific Island Countries(PICs)Like the initial PIC Systematic Country Diagnostic,which the World Bank
187、published in 2016,the 2022 update highlights the role of economic geography(extreme remoteness;small,dispersed populations)and exposure to shocks as key structural constraints on growth and economic diversification across the region.Given these challenges and considering challenges that have arisen
188、because of the COVID-19 pandemic and increasing awareness of disaster risks,the Systematic Country Diagnostic update identifies three pathways to end extreme poverty and boost shared prosperity in the Nine PICs it covers:1.Expand economic opportunities:Revitalize and realize sustainable tourism,expa
189、nd economic opportunities in oceanic fishing,enhance labor mobility opportunities,and improve digital connectivity and services in the private and public sectors.2.Maximize human capital and its economic returns:Improve the quality of education and increase access to secondary and higher education;s
190、trengthen health care systems to increase coverage,quality,and resilience;and increase womens paid employment and reduce gender-based violence.3.Build resilient incomes and livelihoods:Strengthen climate and disaster risk management tools and policies,develop adaptive social protection systems,and s
191、upport resilient agriculture for small-scale farmers and coastal fisheries.these countries and emphasizes the role of resilience(Box 2).13 It was prepared by analyzing available data and information from previous reports,government sources,and the academic literature and collecting new information i
192、n consultations with regional and national stakeholders.Given the scarcity of data on Pacific tourism and frequent discrepancies between sources,one of its main contributions is to provide a detailed quantitative assessment of the sector and its economic impacts,for instance on jobs,poverty,and publ
193、ic revenue,based on an extensive data collection,cross-checking,and integration exercise.The study focused on selected challenges for long-term development of high-value tourism that are relevant at the regional level.Although the pandemic is not fully over,the study focuses not on immediate priorit
194、ies to help the sector weather the crisis but on medium-and long-term needs for after COVID.14 Although it is regional in scope and does not pretend to establish a precise diagnostic for any particular country in the region,the study strives to consider the different country contexts and to identify
195、 priorities of PICs with different endowments and tourism maturity and potential opportunities for regional cooperation.The analysis considers broad constraints on tourism development and particular attention is paid to small local providers of tourism services,referred to as MSMEs throughout this r
196、eport,which can play a large role in increasing the quality and diversity of a destinations offering.Finally,the study does not address in detail all structural barriers to tourism development in the Pacific but focuses on priorities to increase economic value by repositioning the sector in higher-v
197、alue markets that were identified through research and consultations with tourism stakeholders in PICs.15 As such,it complements other ongoing World Bank analytics and operations addressing,for instance,tourisms environmental impacts and connectivity.The studys structure provides a backward-and forw
198、ard-looking analysis of tourism in the Pacific.The first chapter presents the available evidence on tourisms historical contribution to economic development in PICs and on COVID-19s impacts,differentiating between destinations at different maturity levels and reviewing several frequently debated top
199、ics,including tourisms role in poverty reduction and distribution of its gains.The chapter also discusses current and potential tourism market segments in the Pacific,assessing potential benefits of targeting higher-value markets.To inform strategic choices for the industry in the medium to long ter
200、m,the second chapter more closely examines current obstacles to and potential opportunities for a more competitive,sustainable Pacific tourism,focusing on factors deemed key to targeting higher-value markets.The third chapter discusses and recommends medium-to long-term policy priorities and investm
201、ent needs to(re)position the Pacific tourism model,focusing on competitiveness,environmental sustainability,resilience,and inclusiveness.This report is intended to serve as a basis for a renewed policy dialogue on tourisms contribution to building more competitive,inclusive,sustainable,and resilient
202、 economies in the Pacific.This dialogue between PIC governments,tourism stakeholders,and development partners,including the World Bank,should take place at the country level to identify specific local challenges and opportunities.It could also be pursued at the regional level to explore potential sy
203、nergies and cooperation modalities.As the Pacific recovers from the COVID-19 crisis,the World Bank stands ready to help the 11 countries covered in this report identify and implement priority reforms and investments in tourism and linked sectors through further analytical work,technical assistance,a
204、nd financial support.Image:FijiTHE FUTURE OF PACIFIC TOURISM MARCH 2023 2122 THE FUTURE OF PACIFIC TOURISM MARCH 2023Image:Vanua Levu,FijiCredit:World BankTHE FUTURE OF PACIFIC TOURISM MARCH 2023 231.The Boom of Pacific Tourism and COVID-19s Impacts1.1.Tourisms Contribution to Economic Development i
205、n the PacificTourism has had increasingly strong benefits for PICs economies since the turn of the century.Tourism receipts and employment indicators have been the prevailing measures of the sectors economic impact,although data shortcomings make detailed analysis and regional comparisons challengin
206、g(Box 3).One of this reports main contributions is to consolidate data from existing sources and provide new quantitative evidence of tourisms contribution,for instance to public revenue and poverty reduction.Box 3.Measuring Tourisms Economic Impact in the PacificCalculation and reporting of economi
207、c indicators for tourism are relatively new for Pacific Island countries(PICs),and methods are often inconsistent.Use of a tourism satellite account was unique to Fiji until 2022,when PNG released its first tourism satellite account report.a Otherwise,PICs have determined the value of tourism using
208、balance of payments or the more rudimentary approach of multiplying visitor numbers by average visitor spending,where available.Agencies such as the Pacific Tourism Organisation,the United Nations World Tourism Organization,and the World Travel and Tourism Council use country data to produce reports
209、 on key tourism indicators using different methodologies.As a result,different sources cite conflicting figures for some countries.This study draws on receipts,gross domestic product(GDP),and employment data from a variety of sources.UN World Tourism Organization data were used for receipts where av
210、ailable and substituted for data from countries tourism or statistics authorities.b Tourisms contribution to GDP was calculated using these receipts data and World Development Indicator data for national GDP.Tourism employment data were sourced from the Pacific Tourism Organisations 2019 Annual Revi
211、ew,except where more-recent data were available from statistics authorities.The report also includes supplementary data for the six countries for which the World Travel and Tourism Council estimated the total(direct,indirect,and induced)contribution of tourism to GDP.As argued in the last chapter of
212、 this report,developing the capacity to collect and analyze different types of tourism-related data should be a priority for PICs,to enable more evidence-based policy for the sector.a.Tourism satellite accounts are standard statistical frameworks for economic measurement of tourism that allow touris
213、m statistics to be harmonized and reconciled from a national accounts perspective and enable economic data on tourism comparable to other economic statistics to be generated.b.Tourism receipts are expenditures of international inbound visitors,including payments to national carriers for internationa
214、l transport and prepayment for goods and services received in the destination country.Tourism receipts are not perfectly equivalent to the sectors value added(as included in GDP)because they do not deduct tourism businesses domestic and imported supply chain purchases.16 These arrivals accounted for
215、 73 percent of international overnight visitors to a larger group of 16 PICs:the above countries plus American Samoa,Cook Islands,French Polynesia,New Caledonia,and Niue.17 Based on data from the United Nations World Tourism Organization Tourism Dashboard and updates from national tourism and statis
216、tics authorities.18 Arrivals data uses UNWTO data where available and reliable.SPTO,NTO and NSO data used where not available.Historical Tourism Demand Arrivals of international tourists to the Pacific doubled from 2000 to 2019.In 2019,PICs saw combined international overnight tourism reach an all-t
217、ime high of 1.5 million arrivals16(1.8 million including cruise ship and day visitors)(Figure 1),but volumes and growth were highly uneven between countries,with Fiji accounting for more than half of overnight arrivals,followed by Samoa,Vanuatu,PNG,Palau,and Tonga,with a combined share exceeding one
218、-third.17 Growth in arrivals had averaged 3.6 percent per annum over the two preceding decades,although individual country compound annual growth rates ranged from 0.6 to 6.1 percent(Figure 2).Some other PICs that account for a small percentage of total arrivals to the region have seen sustained gro
219、wth in arrivals since 1999,with Tuvalu achieving the fastest pace(albeit from a low base).Several countries,notably Fiji,PNG,and Vanuatu,have also seen strong,if uneven,growth in the cruise ship market,a segment that more than tripled from 1999 to 2019,to reach approximately 511,000 day-passenger vi
220、sits (Figure 3).18 COVID-19 significantly and temporarily impacted visitor arrivals growth(Box 4).24 THE FUTURE OF PACIFIC TOURISM MARCH 2023Neighboring markets have accounted for most arrivals in PICs,driven by proximity,air connectivity,and targeted marketing.Australia and New Zealand are by far t
221、he dominant source markets for PICs as a whole(Figure 4),accounting for more than 60 percent of arrivals to Fiji,Samoa,Tonga,and Vanuatu in 2019,but for some countries,such as FSM and Palau,more tourists arrive from China,Japan,and the United States.Some countries have taken steps to diversify sourc
222、e markets,with Palau,for instance,targeting Taiwan,and Fiji increasing marketing activities in Japan and North America.Fiji was able to increase arrivals from Canada and the United States by 63 percent between 2013 and 2019 and tripled arrivals from Japan between 2014 and 2019.Figure 2.Disaggregated
223、 Growth of International Overnight Visitor Arrivals in Pacific Island Countries,19992019Figure 3.Growth of Cruise(Day)Visitor Arrivals in Pacific Island Countries,19992019Figure 1.Regional Growth in All Visitor Arrivals in Pacific Island Countries,1995-2021Source:UNWTO 2022b;FSM Statistics 2022;PNG
224、TPA 2022;STA 2022;Tonga Statistics Department 2022.Source:UNWTO 2022b;FSM Statistics 2022;PVA 2021;Solomon Islands NSO 2022;STA 2022;Tonga Statistics Department 2022.Source:UNWTO 2022b;FSM Statistics 2022;PVA 2021;PNG TPA 2022;Solomon Islands NSO 2022;STA 2022;Tonga Statistics Department 2022.THE FU
225、TURE OF PACIFIC TOURISM MARCH 2023 25Source:FBOS 2022;FSM Statistics 2022;Kiribati NSO 2022;PVA 2021;PNG TPA 2022;RMI EPPSO 2022;Solomon Islands NSO 2022;STA 2022;Tonga Statistics Department 2022;Tuvalu CSD 2022;Vanuatu NSO 2022.Figure 4.Top Source Tourism Markets for Pacific Island Countries,201926
226、 THE FUTURE OF PACIFIC TOURISM MARCH 2023As PICs gradually reopened their borders in 2022,visitor arrivals to the region began to rebound,with partial or full recovery anticipated by 2024.Risk appetites for reopening to tourism varied across PICs,but most took a conservative approach.a By October 20
227、22,all but Tuvalu had reopened their borders with some vaccination,testing,and masking restrictions in place.Tuvalu was expected to reopen by the end of 2022.As of August 2022,Fiji had received 354,277 visitors(60 percent of 2019 levels for the same period)with third quarter arrivals anticipated to
228、be 80 percent of third quarter 2019 volumes.In its first month of opening,Vanuatu received 3,439 international visitors,27 percent of July 2019 levels.By July 2022,Palau experienced a 13 percent recovery for the second quarter.Interest was strong for the late 2022 dive season in Palau,but evidence i
229、ndicated that expensive and infrequent flights constrained demand.b The Pacific Asia Travel Association forecasts for selected PICs indicate that arrival volumes will recover fully by 2023 under an optimistic scenario and to 80 to 90 percent by 2024 under a conservative scenario(PATA 2022).a.The rat
230、e of vaccine rollout was slower in some countries than others.Vaccination targets were cited as a reopening criterion for Fiji,Kiribati,Samoa,Tonga,and Vanuatu.Visitor entry conditions for reopening borders have varied from country to country and over time,but have included requirements for traveler
231、 vaccination,pre-and post-travel testing,restricted movement,use of contact tracing systems,and mask wearing.b.As reported to the Palau Visitors Authority at the Scuba Show in the United States in May 2022.Box 4.COVID-19 Impacts on Tourism Demand and RecoveryPICs rapidly closed their borders to inte
232、rnational visitors in March 2020 at the onset of the pandemic and maintained strict travel restrictions during the crisis.They imposed rigorous,prolonged restrictions on inbound and outbound travel to contain the spread of the virus,with restriction levels remaining long after Caribbean small island
233、 developing states decreased restrictions(Figure 5).The extended border closures protected public health but resulted in an unprecedented 84 percent decline in combined annual visitor arrivals to PICs in 2020 and a further 83 percent decrease in 2021.Combined inbound overnight visitors plummeted fro
234、m an all-time high of 1.51 million in 2019 to around 240,000 in 2020(mainly first quarter arrivals).Combined international overnight arrivals remained low in 2021,at about 40,000.Figure 5.Stringency of Travel Restrictions in the Caribbean and Pacific and Pacific Island Country Reopening DatesSource:
235、University of Oxford 2022.Notes:Caribbean countries include Aruba,Bahamas,Barbados,Belize,Cuba,Dominica,Dominican Republic,Guyana,Haiti,Jamaica,Suriname,Trinidad and Tobago,and U.S.Virgin Islands.PICs include Fiji,Guam,Kiribati,Papua New Guinea,Solomon Islands,Tonga,and Vanuatu.The Travel Restrictio
236、ns Index is calculated on a scale of 0(least restrictive)to 100(most restrictive),using data from the Oxford COVID-19 Government Response Tracker.THE FUTURE OF PACIFIC TOURISM MARCH 2023 27Contribution of Growing TourismReceipts to GDP Tourism revenues for PICs were growing at more than 5 percent pe
237、r annum before the pandemic.At the regional level,the value of tourism receipt expenditures of international inbound visitors19rose from USD 1.5 billion in 2010 to USD 2.4 billion in 2019(PNG TPA 2022;SPTO 2020;UNWTO 2022b).20 This growth represented a compound annual growth rate(CAGR)of 5.2 percent
238、 between 2010 and 2019,although growth was uneven because some countries grew faster and started from a higher base.Most notably,Fiji accounted for more than half of total receipts in 2019,reflecting its dominance in the region(Figure 6).This performance can be linked to an advantageous location and
239、 a history of substantial government support of tourism through policy reforms,early establishment of a national tourism organization(NTO),investment incentives,and public investment since the end of World War II.Before COVID,Palau,PNG,Samoa,and Vanuatu,which together shared more than one-third of r
240、eceipts,followed Fiji.19 In addition to expenditures in the destination country,they include payments to national carriers for international transport and any other prepayments for goods or services received in the destination country.Receipts are lower for countries without national carriers.20 PNG
241、 data reported in PNG Kina converted to USD.21 In Tongas case,the relatively low contribution of tourism receipts to GDP(11.1 percent)is because of the high value of remittances.22 The World Travel and Tourism Council estimates the total(direct,indirect,and induced)contribution that travel and touri
242、sm have made to GDP in six PICs.They attempt to capture the sectors value added plus indirect(domestic)supply chain purchases plus induced effects through the spending of workers directly and indirectly employed in the sector.This approach complements data on receipts only.23 Unweighted averages.Cou
243、ntries included for the Caribbean average are Antigua and Barbuda,the Bahamas,Barbados,Dominica,the Dominican Republic,Grenada,Jamaica,Saint Kitts and Nevis,Saint Lucia,and Saint Vincent and the Grenadines.Countries included for the Atlantic and Indian Ocean averages are Cabo Verde,the Maldives,Maur
244、itius,Sao Tome and Principe,and the Seychelles.Before the pandemic,tourism receipts accounted for a considerable share of GDP in many PICs,demonstrating the sectors weight in the economy.As international tourist arrivals grew across the region,so did tourism receipts expressed as a share of GDP,alth
245、ough the benefits have been uneven across the studied countries(Table 2).Throughout the 2010s,tourism receipts grew faster than GDP in five of the eleven PICs and slightly slower than GDP in the others.Before the pandemic,they exceeded 10 percent of GDP for seven of the 11 studied countries(Figure 7
246、).Some PICs are among the most tourism-dependent countries in the world;Fiji,Palau,Samoa,and Vanuatu had the highest receipts relative to GDP,at around 25 to 35 percent in 2019(Figure 8),21 but other countries in the region(e.g.,PNG and Kiribati)were considerably less dependent on the sector.In PNG,
247、this is particularly because of the large natural resources and mining sectors.The economic value of tourism extends beyond direct receipts because many economic activities are indirectly associated with tourism and travel.Tourism stimulates economic activity in several linked sectors,such as constr
248、uction,agriculture,manufacturing,the arts,and cultural industries.World Travel and Tourism Council estimates suggest that the total contribution of travel and tourism to GDP in some PICs(e.g.,Fiji,Vanuatu)is well above the world average(Figure 8),22 although they also show that it is lower than the
249、averages for SIDS in the Atlantic,Caribbean,and Indian oceans.23 Supply linkages with agriculture and fisheries,which are among the main channels to broaden tourisms economic impact in other sectors and to generate income for lower-income households,have grown in some PICs,as recent studies have sho
250、wn,and could be developed further(Box 5).Beyond supply linkages,tourism can generate productivity spillovers in other economic sectors(Box 6),but research is yet to be conducted on this in the Pacific.Figure 6.Tourism Receipts in Pacific Island Countries,2010,2019,2020Source:PNG TPA 2022;SPTO 2020;U
251、NWTO 2022b.28 THE FUTURE OF PACIFIC TOURISM MARCH 2023Table 2.Profile of Pacific Island Economies and Tourism Sectors,2010-2020(USD Million)Sources:a.World Development Indicators(database).World Bank,Washington,DC(accessed November 2022),https:/databank.worldbank.org/source/world-development-indicat
252、ors.Data for 2019 and 2020 in current USD.b.PNG TPA 2022;PVA 2021;SPTO 2020;UNWTO 2022b.Figure 7.Evolution of Tourism Receipts as a Share of Gross Domestic Product(GDP)in Pacific Island CountriesCountryGross domestic productaTourism receiptsb2001020192020Federated States of Micronesia 297
253、 412 408 24 44 -Fiji3,141 5,496 4,574 825 1,345 236 Kiribati 155 178 181 4 3 0 Palau 186 274 258 69 96 17 Papua New Guinea14,251 24,751 24,667 141 211 45 Republic of the Marshall Islands 160 239 244 4 21 -Samoa663 852 807 124 206 23 Solomon Islands847 1,570 1,546 51 82 7 Tonga 367 512 489 17 57 48 T
254、uvalu32 54 55 2 9 -Vanuatu 671 937 897 242 295 67 Regional20,769 35,277 34,1261,504 2,370 443 Figure 8.Total Contribution of Travel and Tourism to Gross Domestic Product(GDP)in Select Pacific Island Countries(PICs)and Comparators,2019Source:PNG TPA 2022;PVA 2021;SPTO 2020;UNWTO 2022b;World Developme
255、nt Indicators(database).World Bank,Washington,DC(accessed November 2022),https:/databank.worldbank.org/source/world-development-indicators.Note:Federated States of Micronesia,Republic of the Marshall Islands,and Tuvalu did not have data for 2020.Source:WTTC 2020.Note:Benchmark data are averages.THE
256、FUTURE OF PACIFIC TOURISM MARCH 2023 29Accommodation providers in the PICs offer a range of services,including food and beverage,24 but most do not function on an all-inclusive model like many Caribbean resorts.Those that are all-inclusive tend to be luxury resorts located in remote areas that have
257、limited or no external options for food and beverage services nearby.However,many guests still tend to concentrate a large portion of their spending within the hotel.Inbound tour operators and airlines work with outbound tour operators 24 Breakfast or half-board is often included in the price.25 Som
258、e tour operators are considered land only operators and focus on the aspects of the package once tourists are in destination.in source market countries to provide tour packages that contract,book,and deliver various components of a holiday(such as hotel,in-destination transportation,and flights).25
259、They also provide on the ground services to visitors once in destination,mostly focusing on activity organization(e.g.,tours,site visits,entertainment)and local transportation.This is a major source of revenue for operators and provides a link between visitors and local activity providers,who might
260、not otherwise be able to access the market.Box 5.Tourism Businesses Food Procurement in Pacific Island Countries(PICs)Demand for fresh food from accommodation providers and restaurants is an important opportunity for local producers of these products in the Pacific and can support typically lower-in
261、come farming households.Evidence from studies in several PICs suggests that local production accounts for about half of this demand,imports meeting the rest.-Fiji:Of the 74.4 million Fijian dollars(USD 36.4 million)that hotels and resorts in Fijis main tourism areas spent on fresh produce in 2017,48
262、 percent was procured locally,and 52 percent was imported(down from 70-80 percent 10 years earlier)(FAO 2011;IFC 2018a).-Palau:A 2020 survey of hotels and restaurants in Palau found that almost all fish and root vegetables used were sourced locally but only 65 percent of fruits and 50 percent of oth
263、er vegetables.a-Vanuatu:Of the 1.5 billion vatu(USD 15.6 million)that hotels and restaurants in the capital Port Vila spent on fresh produce in 2014,46 percent was spent on local produce(IFC 2015).Several constraints must be addressed to maximize local supply linkages of fresh produce in PICs.Accomm
264、odation providers and restaurants in the region have long expressed a willingness to reduce reliance on imported fresh foods,but key barriers to doing so include lack of networking between key decision makers in hotels and local producers and suppliers;inconsistency of local supply,particularly for
265、fruits,vegetables,seafood,and dairy products;seasonality of produce available locally(particularly fruits and vegetables);poor quality of some local products(particularly meat,seafood,and dairy products);and lack of food safety standards for meat and seafood(IFC 2018a).a.Source:unpublished survey of
266、 hotels and restaurants by Sustainable Travel International.Box 6.Tourism,Productivity Spillovers,and GrowthThere is strong theoretical and empirical evidence that productivity is a key driver of economic growth.In addition to its direct contribution to value addition,productive sectors and firms ca
267、n foster overall economic growth if they develop innovative,efficient production techniques(including using more-skilled workers)that spill over to other sectors and firms,making them more productive.In tourism,such spillover effects may occur through supply chain linkages(e.g.,suppliers to a foreig
268、n-owned hotel learn new management techniques,tourism growth increases local firms access to productivity-enhancing business services),movement of workers(e.g.,workers apply skills learned as tourism employees when they move to other sectors),or linkages with foreign markets (e.g.,links with particu
269、lar tourism markets facilitate establishment of export relationships with these markets for local merchandise producers).Identifying potential productivity spillovers to other sectors can help reveal tourisms overall economic impact and justify more-targeted support for this sector,but empirical evi
270、dence of productivity spillovers from tourism is limited.One study that has been conducted to fill this knowledge gap(Faber and Gaubert 2019)focused on Mexico and found that tourism has a strong,significant positive effect on local economic activity,with a 10 percent increase in local tourism revenu
271、es leading to a 2.5 percent increase in employment and a 4 percent increase in municipality gross domestic product.Sizable local multiplier effects on production of manufacturing,including for sectors that are not intensively used as inputs in the tourism supply chain,drive these effects in part.At
272、the aggregate level,the positive effects of tourism are partially offset by reductions in manufacturing scale and productivity.Overall,however,the study estimates that tourism provides benefits to the average household of the order of 5 percent of household consumption.30 THE FUTURE OF PACIFIC TOURI
273、SM MARCH 2023Assessing the extent of local value retention in Pacific tourism requires a nuanced approach.Like in other countries and regions,there have been frequent debates in the region about the respective shares of tourism income staying in PICs and“leaking”abroad.Economic leakage can occur at
274、various stages of the tourism supply chain,starting with the booking process,during which overseas travel intermediaries and online travel agents retain a portion of visitor spending through commissions or fees.26 Although these can account for 15 to 30 percent of the price of the product,consolidat
275、ors also provide value to local tourism businesses that do not have the resources to manage this essential business function themselves.Leakages also occur when tourism revenue is spent on imported goods and services.This is often unavoidable in PICs where certain inputs are not available locally an
276、d where it is not efficient to produce these products locally.27 However,as previously discussed,there is potential to further develop supply linkages.Debates about leakages often focus on repatriation of profits by foreign-owned tourism businesses or hotels managed by international brands.Although
277、holistic data do not exist on hotel ownership,corporations(domestic and foreign)and national provident funds typically own large and medium-sized hotels,or they have strata title ownership structures.Property development companies or high-net-worth individuals and some domestic corporations generall
278、y own small to medium-sized,high-end resorts.There are also small resort properties that are lifestyle investments that expatriates and returned diaspora own.Of the 42 internationally branded hotels in PICs,28 60 percent are locally or regionally owned,29 19 percent have mixed local and foreign owne
279、rship(including strata titles),and 21 percent are wholly foreign owned.30 Although such leakage happens to some extent in all sectors with foreign direct investment,it must be weighed against the benefits of the foreign direct investment in developing tourism.Foreign-owned hotels provide much-needed
280、 jobs,knowhow,and investment capital in the region,including in infrastructure that benefits local communities.They also,especially those with international brands,typically invest in marketing that promotes the destination to target markets and provides skills development through in-house training
281、programs.26 Detailed data are not available for PICs,but accommodation providers typically must factor up to 30 percent into their rate structure to cover booking administration and marketing costs that distribution partners incur(e.g.,market-based travel wholesalers and agents).27 For example,in th
282、e case of Fiji,the IFC study on local agricultural linkages found that locally grown carrots and onions could not compete on price and quality with imports.28 Most internationally and regionally branded resorts are in Fiji,Samoa,and Vanuatu.Development of brand hotels in PNG was initiated when the c
283、ountry became host of the Asia-Pacific Economic Cooperation Ministerial Meeting in 2018.29 Including only owners from other PICs.30 Data on accommodation ownership based on research by authors.31 Estimate of Direct Contribution in USD million.32 No 2020 data were available for FSM.33 Fijis Environme
284、ntal Climate Change Adaptation Levy,introduced in 2018,was collected through different businesses,including accommodation providers,tour operators,and restaurants.Generating an estimated FJD 270.2 million in 2019,Environmental Climate Change Adaptation Levy collection was suspended in 2022 as a reli
285、ef measure for businesses.In Palau,the USD 100 Pristine Paradise Environmental Fee applies to arriving visitors.Based on 2019 arrivals,it would have earned USD 95.5 million.34 Some countries also have departure taxes for cruise and yacht passengers,and visitor visa fees apply in some instances,altho
286、ugh holiday arrivals from key source markets are typically exempt.With the onset of the pandemic and the subsequent collapse of arrivals,tourism receipts in PICs were 81 percent lower in 2020 than in 2019.Receipts for the group dropped from USD 2.4 billion in 2019 to USD 443 million in 2020(Table 2)
287、.Fiji,which accounted for more than half of aggregate receipts in 2019,faced the largest losses in absolute terms,although the losses were also significant for the smaller economies(PNG TPA 2022;PVA 2021;SPTO 2020;UNWTO 2022b;World Bank 2022c.).31 At the time of writing,annual regional receipts data
288、 are not available for 2021,but it is anticipated that revenues will have been considerably lower than for 2020,based on the 83 percent drop in arrivals between 2020 and 2021.32 Expressed as a share of GDP,tourism receipts in PICs also fell substantially during the pandemic,particularly in the most
289、tourism-reliant countries,declining by as much as 29 percent for Palau,24 percent for Vanuatu,21 percent for Samoa,and 19 percent for Fiji.The decline varied for the other less-tourism-dependent PICs but was nonetheless substantial.Tourism as a Major Source of Public RevenueIn addition to private in
290、come that is directly and indirectly generated,tourism has become an increasingly essential source of tax revenue for PIC governments.In Fiji,tourism was among the largest source of revenue for the state before the pandemic,generating about FJD 1 billion(USD 452 million)annually(Government of Fiji 2
291、021),about 28 percent of the total in 2019/20,and in PNG it contributed 122 million kina(USD 34 million)(PNG TPA 2022).Although lower in absolute terms,tourism makes significant contributions to public budgets in other PICs.The most common form of direct tourism tax is an airport departure tax(facto
292、red into airline tickets for visitors and residents),although arrival fees(including for visitor visas),turnover and bed taxes,site user fees,and special environmental taxes33 have been used in some countries(PSDI 2021a).34 In Fijis case,the FJD 200 per passenger departure tax would have collected a
293、round FJD 179 million(USD 80 million)based on international visitor numbers in 2019.Value-added taxes,service turnover taxes,and goods and services taxes(GSTs)also generate significant revenues from international THE FUTURE OF PACIFIC TOURISM MARCH 2023 3135 Based on a conservative assumption that 2
294、019 departure tax revenues would have been replicated in 2020 and 2021 had borders not closed.These figures reflect the difference between this assumption and actual receipts for the two years combined;losses for Fiji were even higher because the departure tax was halved in mid-2020.36 Based on coun
295、try data available between 2014 and 2019 in the Pacific Tourism Organization Annual Review 2019.Data are from employment surveys or censuses that national statistics offices publish using the same or closest available year.This roughly corresponds to the total number of persons employed,although for
296、 Fiji,it is the number of wage and salary earners.Employment data were compared workforce data from national statistics authorities.37 National statistics offices report data not on tourism jobs per se but on jobs in accommodations and food services,although this is narrowly defined and does not dif
297、ferentiate between those that serve international tourists and domestic markets.visitors and tourism businesses.Although some taxes,such as environmental levies in Fiji and Palau,have been earmarked for environmental conservation projects,most tax revenue that the tourism sector generates has been u
298、sed to finance public policy priorities through the general public budget.Tourisms importance as a source of public revenue has also increased PICs budget exposure to shocks affecting the sector.For example,the decrease in visitors in 2020 and 2021 translated to forfeited departure tax income of app
299、roximately USD 321.82 million in Fiji and USD 8.32 million in Palau.35 In Vanuatu,government revenue was about 14 percent lower in 2020 than in 2019,partially as a result of the suspension of tourism travel.In PNG,there was an estimated 81 percent(USD 26 million decrease in tourism-related tax reven
300、ues in 2020 from 2019(IMF 2022).GSTs in almost all of the studied countries were lower in 2020 than 2019(Figure 9).GST revenues were affected most dramatically in three of the most tourism-dependent economies,declining by USD 165 million in Fiji(39 percent),USD 2 million in Vanuatu(23 percent),and U
301、SD 2.3 million in Palau(16 percent).Although this shortfall cannot be attributed solely to tourisms decline,the high ratio of tourists to population in these countries suggests that their contribution to GSTs before 2019 was considerable.Figure 9.Relationship Between Decreases in Arrivals and Goods
302、and Services Tax Receipts in Selected Pacific Island Countries,2019/20Tourisms Contribution to Employment:Reducing Poverty and Providing Employment Opportunities for WomenBefore the pandemic,tourism directly employed approximately 71,000 people in formal jobs across PICs.In Fiji,Samoa,Tonga,and Vanu
303、atu,such formal jobs directly accounted for eight to 11 percent of employment(Figure 10).36 In Palau,formal tourism employment in accommodations and food service was considerably higher,accounting for about 26 percent of national employment.On the low end,available data suggest that tourism accounte
304、d for only 0.8 percent of formal employment in PNG because of its large natural resource sector.Compared to other tourism dependent SIDS regions,tourism contributes a lower share to overall tourism employment(Figure 11).Like most tourism data in the Pacific,detailed employment data are scarce,and th
305、ere are sometimes large discrepancies between sources.37Sources:International Financial Statistics(database).IMF,Washington,DC(accessed Jun 2022),https:/data.imf.org/?sk=4c514d48-b6ba-49ed-8ab9-52b0c1a0179b;Schedules Analyzer(unpublished database).OAG,Luton,England(accessed Jun 2022),https:/ THE FUT
306、URE OF PACIFIC TOURISM MARCH 202338 A regional business survey that the Pacific Tourism Organisation conducted in March 2021 found that tourism employment was 51.5 percent lower than in March 2020(before travel restrictions)(SPTO 2021b).Figure 10.Tourism Jobs and Share in Formal Employment in Pacifi
307、c Island Countries before COVID-19Beyond formal direct jobs,the true impact of tourism on employment extends to a large number of informal direct jobs and indirect jobs that the sector supports.Although there are no official data on informal tourism employment for the studied countries,the sector pr
308、ovides a large number of direct informal jobs,such as independent tour guides,cultural performers,and souvenir sellers.Given the size of tourism in PICs and the fact that informal workers account for a large share of total employment in these countries(estimated at 78 percent in Tonga,37 percent in
309、Fiji,and 33 percent in Samoa)(ILO 2020a),it is likely that total direct tourism employment including formal and informal jobs was much higher than before the pandemic.In addition,tourism indirectly supports many jobs,including providers of goods and services in tourism businesses supply chains(e.g.,
310、construction services,retail outlets,farm products).Although data are limited,these direct and indirect channels provide substantial earnings for local populations.The evidence suggests that jobs created through tourism growth reduced poverty in the region before 2020(Box 7),although the pandemics i
311、mpact on the sector pushed many back into poverty in 2020,when tourism employment was reduced by up to 50 percent in some countries.38Box 7.Measuring Tourisms Poverty ImpactsAlthough there is a need for additional study to determine the contribution of tourism to poverty reduction,recent simulations
312、 suggest that the sector reduced poverty in the years preceding the pandemic.A simple elasticity analysis suggested that a 1 percent increase in tourism sector gross domestic product during this period was associated with reductions in poverty of 0.68 percent in Fiji,0.074 percent in Vanuatu,and 0.0
313、78 percent in Kiribati(based on the upper-middle-income poverty line of USD 5.5 per capita per day in 2011 purchasing power parity terms).When assessing tourisms poverty impacts at the USD 3.20 poverty line,lower impacts were found in all three countries.Although the limited data make it difficult t
314、o draw firm conclusions,especially over a long period of time,this may imply that tourism offers greater economic mobility once above the lower threshold of povertythat is,from vulnerability to economic security.A microsimulation analysis of the distributional impacts of the COVID-19 shock on househ
315、old welfare and poverty in 2020,when border closures affected tourism employment,supports these findings.Figure 11.Total Contribution of Travel and Tourism to Employment in Select Pacific Island Countries(PICs)and Comparators,2019Source:FBOS 2022;SPTO 2020;STA 2022.Note:The Pacific Tourism Organisat
316、ion did not obtain data for the Federated States of Micronesia(FSM)(2018),Republic of the Marshall Islands(2015),Tuvalu(2016),and Vanuatu (2018).Alternative sources were used.Source:WTTC 2020 THE FUTURE OF PACIFIC TOURISM MARCH 2023 33The quality of local tourism jobs varies within countries,with wa
317、ges and other benefits depending on the size and sophistication of the employer.Tourism has been one of the few sectors to offer formal employment opportunities and associated benefits to low-and medium-skilled workers.Although detailed data is lacking,tourism wages in the Pacific are reportedly abo
318、ve the minimum wage for most roles and relatively high for skilled jobs.However,wages and other benefits can vary between larger and smaller businesses(Scheyvens&Russell,2012).Larger tourism firms more often provide job security to their employees through formal contracts that also typically contain
319、 more generous compensation packages.The tourism sector employs a significant share of female and low-skilled workers,with implications for the sectors potential to bridge gender gaps in employment and reduce poverty in vulnerable groups.Persistently low female labor force participation and a large
320、gender gap in employment rates characterize PIC economies.The average female labor force participation for PIC economies is 45.8 percent,compared with 58.8 percent overall in the East Asia and Pacific region(ILO n.d.).Across the Pacific,the tourism sector tends to employ men and women in similar pro
321、portions,with the hospitality and retail sectors being a key source of income for women.In all PICs,hospitality represents a larger share of womens than mens employment,and in Fiji,FSM,Solomon Islands,and Tonga,women working in hospitality outnumber men nearly two to one.39 As such,tourism tends to
322、be more inclusive than other sectors in a region where womens labor force participation remains,on average,22 percentage points lower than mens(ILO 2020a).Tourism has been particularly important for women and rural workers in the Pacific,who still face more-limited opportunities than men in urban ar
323、eas,especially for paid employment and entrepreneurship.In Fiji,most rural mens and womens direct tourism employment consists of wage jobs.Nearly 70 percent of rural womens retail work(and 40 percent of mens)consists of self-employment and is concentrated in the sale of traditional handicrafts and t
324、extiles,partially to the tourism sector.40 1.2.Differentiating PICs as Tourism DestinationsPICs are at very different levels of tourism maturity because they have different characteristics,en-dowments,and levels of government support.Although the PICs share traits that have influenced how they have
325、emerged as tourism destinations,critical country-specific factors have also influenced the nature and scale of the sector,including:COVID-19 has severely affected livelihoods and increased poverty in Pacific Island countries(PICs),notably because of its impacts on tourism.The sudden collapse of inte
326、rnational travel had dramatic economic and social impacts on firms and workers that relied on tourism,which relief measures that some PIC governments adopted only partially offset(Connell 2021).The crisis has pushed many into poverty,particularly in the most tourism-reliant countries,such as Fiji an
327、d Vanuatu(Gounder 2020,World Bank 2020b).Anecdotal evidence of increasing poverty linked to loss of tourism jobs has been the subject of media reports throughout the crisis,including in Fiji(Baleinakorodawa and Vaai 2021),Palau,Samoa(Tahana 2020),Tonga,and Vanuatu.For this study,a macro-micro simula
328、tion analysis was conducted in three PICs for which reliable data are available:Fiji,Kiribati,and Vanuatu(Montanes and Nakamura 2022).Translating aggregate output and employment data to individual and household income for 2019 and 2020,it found that adverse developments in the tourism sector account
329、ed for one-quarter to half of the poverty increase.Specifically,the decline in tourism accounted for poverty increases of some 2.5 percentage points in Fiji,1.5 percentage points in Vanuatu,and 0.9 percentage points in Kiribati based on the upper-middle-income poverty line of USD 5.5 per capita per
330、day in 2011 purchasing power parity terms.Given tourisms relatively small employment shares in these countriesabout 11 percent in Vanuatu,10 percent in Fiji,and 1.6 percent in Kiribatiits contribution to the recent poverty growth is sizeable.These results confirm previous studies that have found sim
331、ilar poverty-reducing impacts of growth in tourism and tourism-related employment.A 2015 study of several small island developing states(American Samoa,Aruba,Fiji,Jamaica,the Maldives,Mauritius,the Seychelles)using input-output analysis,linkage analysis,and a computable general equilibrium model fou
332、nd that tourism had a positive effect on economic and poverty indicators(Pratt 2015).It found that,for Fiji,a 10 percent increase in international tourism expenditures led to a 3.06 percent increase in household consumption(the highest rate in the sample group)and a 2.16 percent increase in welfare(
333、second only to the Maldives).The study also identified a positive relationship between the size of the economy and the size of the tourism multipliers,as evident in Fiji and Jamaica,which are larger economies.A 2011 study conducted in 49 small island developing statesincluding Fiji,Papua New Guinea,Samoa,Solomon Islands,Tonga,and Vanuatualso found that tourism had a positive impact on the poor(Jia