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Focus: Tourism Earnings

Since we talked about visitors’ numbers last week, I thought we would compare these against the total earnings received in terms of tourism for the same period which is September
07 Feb 2015 10:26
Focus: Tourism Earnings

Since we talked about visitors’ numbers last week, I thought we would compare these against the total earnings received in terms of tourism for the same period which is September of 2014.

As mentioned in my commentary for the previous week, “Tourism” is currently the backbone of our country.

It is by far the largest foreign exchange earner for Fiji. Earning from tourism is more than sugar, gold, fish, timber and garments combined.

It has numerous industries linked to it and as such it contributes approximately one-third of the Fiji’s GDP. Hence, it is an important source of employment and development.

Provisional data shows that earnings from September quarter of 2014 was estimated at $413.2 million.

Compared against the same quarter of 2013, tourism earnings was $389.2 million, it was an increase of 6.2 per cent or $24.0 million.

It can be portrayed from Graph 1 that the September quarter of each year is when tourism earning is always at its highest.

So this ties up well with the visitors arrival statistics stating that September quarter of each year is when visitors arrival are at its peak with visitors from our neighboring countries Australia and New Zealand leading the tally.

Australian visitors contributed $212.7 million or 51.5 per cent of the total earnings with $86.7 million or 21.0 per cent attributed to New Zealand visitors.

 

Source markets

Our major source markets, Australia, New Zealand, United States and Continental Europe accounted for 84.2 per cent of the total earnings in the September quarter of 2014, a 0.2 percentage point increase when compared to the September quarter of 2013.

It also shows that September 2014 was a record year in Tourism earnings since 2011.

 

Changes

The changes in earnings recorded by Major Source Markets were as follows:

– Australia increased by $12.9 million (6.5%) from $199.8 million to $212.7 million;

– New Zealand increased by $5.5 million (6.8%) from $81.2 million to $86.7 million;

– United States of America increased by $1.8 million (5.9%) from $30.3 million to $32.1 million and

– Continental Europe increased by $0.7 million (4.4%) from $15.8 million to $16.5 million.

 

Industry’s strife

Despite tourism being a volatile industry, it keeps on striving as it can be construed from Graph 2.

Tourism is perilous to government revenue and this comes from government taxes, vat, departure taxes, and airport landing fees, duties and services that funds health, education, and rural development.

The Government has increased its emphasis on the development of the tourism industry by announcing in its 2015 budget announcement that the industry will be allocated $23.5 million thus a boost to the tourism sector.

The recent downgrade of world economic growth and the weakening of the AUD and NZD may pose some challenge for Fiji as almost two-thirds of visitors come from Australia and New Zealand.

Nonetheless, both these economies are still expected to expand and their visitors are normally repeat tourist to Fiji and therefore the expectation is that arrivals from them will continue to grow.

In addition, the strong growth in the US economy coupled with the appreciation of the US$ should see more tourist from north America.

Further FX updates and forecasts available at HFC Bank with relevant products.

– This is an informative publication, sponsored by The Fiji Sun, Fiji Bureau of Statistics and HFC Bank. All views expressed or implied are purely of the Treasurer at HFC Bank, Peter Fuata.

 



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