Analysis | SUNBIZ

John Ross: Concerns About Our Tourism Sector Performance In 2020

This concern is so widespread that it has to be taken seriously and considered, although almost all of the feedback so far is from tourism operators and not from the hotels and resorts, who are remaining tight-lipped on the issue.
17 Nov 2019 11:42
John Ross: Concerns About Our Tourism Sector Performance In 2020
The Fiji Airways A350-900 XWB aircraft, named ISLAND OF VITI LEVU which will boost the Fiji Airways fleet.


For the first time in my 26 years in Fiji, I am hearing a general concern about the tourist market performance in 2020.

This concern is so widespread that it has to be taken seriously and considered, although almost all of the feedback so far is from tourism operators and not from the hotels and resorts, who are remaining tight-lipped on the issue.

What is the concern

All tourism operators contacted, and they form a good base of the industry, are constituent on the issue.

This is that they believe that the total tourism dollar earnings for the year will come in at a lower figure than last year.

It is difficult to quantify the level that they are talking about but the general level is six per cent in dollar terms against the 2019 result.

It is important to understand that they are talking about dollars and not numbers of tourists. The general expectation that the number of visitors to Fiji for 2020 will be about the same as 2019, but the industry will earn a lower dollar return on each visitor.

This will be the first time in a long while that the income earnings have not shown a positive growth year on year.

Because the tourism industry basically earns a percentage of their turnover as operating income, any reduction of the income from each tourist has to be paid for out of profit.

The industry now has to look at ways to reduce their operating costs as a percentage of income and the biggest part of their operating costs is generally wages, so they are looking at reduced numbers of employees or reduced hours, neither of which is good news for the industry.

Tony Whitton of Rosie Holidays comments that: “2020 will be a challenging time for the industry.

“However, at Rosie, we continue to remain optimistic and are looking at a number of ways we can support the business.

“With the trends this year (2019) Australia has not grown and may in fact, even be poised to contract next year, there are a number of signs to support this.

“It is important to look closely at Australian trends as it is our biggest single source market, accounting for around forty per cent of total visitor arrivals and has traditionally been a very stable market.

“Currently, the Australian economy is slowing down after many years of steady growth and the Aussie Dollar is weak in foreign exchange markets”.

The Australian tourism market is not the only one that is showing a decline, there is a worldwide instability in the economies of many countries, but Australia is critical to the Fiji tourism business because of the large percentage it contributes traditionally.

Mr Whitton goes on to comment that: “For Rosie, we have seen very good growth from North America.

“The USA and Canada have grown up to 12 per cent on last year.

“This is about 15 of our total arrivals and this will now be a priority market with the strong US Dollar and the added attraction of the new daily Fiji Airways flights for the Nadi-Los Angles services with the introduction of the new A350 service.

“With the problems in Hong Kong, the China market for Fiji has declined by about five per cent, just when the numbers were starting to build up nicely.

“We have hope for the Japan business, along with the UK and Europe, which is, surprisingly, still growing at about seven per cent.”

Fiji Airways is working in these markets with Rosie Holidays and the One World Alliance airlines Finnair, British Airways, American and Cathay Pacific and we are hopeful of good results.

So, in spite of the concerns with the trending of the international economies, there are certainly some bright spots in the general gloom.

Structural changes

The Fiji tourism market is also undergoing some significant structural changes that have become increasingly apparent during the year and are, again, centred on the Australian and New Zealand market.

For these markets, Fiji is a “Family Destination” and typically attracts the husband, wife and two children. Because of the growing tightness of uncommitted money in these markets, the families are looking for lower-cost holidays.

High priced destination

Fiji is certainly becoming a high priced destination compared to some other destinations for Australian families.

Destinations such as Bali and other South-East Asian countries offer far cheaper deals on food and accommodation and very attractive airfares and are having an impact on the traditional Australian market.

For Australia, Vanuatu also becomes a serious contender for the family business on a cost basis this year.

Many of these destinations have serious health and safety issues but there is a section of the market that will accept these for the reduced cost of the holiday.

For those coming to Fiji, there are alternatives to the types of holidays they took in past years.

There has been a significant shift in accommodation type.

Many families are now looking for self-contained packages, accommodation where they can prepare their own meals and avoid what they see as the expenses of hotel and resorts.

There has been a marked growth in the offerings of homestay and AirBNB type accommodation where families can self-cater.

There has also been a significant shift in the regions in Fiji that are attracting the families seeking to save costs.

More families are choosing packages in the Coral Coast and Sigatoka areas.

These areas have been offering all-inclusive products for a number of years and in fact, several have built their entire businesses on the all-inclusive proposition.

The families looking for a way to minimise the holiday cost find the concept of everything being included attractive and they get no surprises at the end of their stay.

New areas also being included in the family market are the northern parts of Viti Levu, with resorts such as Volivoli and those around Wananavu showing strong growth.

This seems to be mainly off the back cheaper all-in holiday pricing.

One area that appears to be suffering a decline in numbers is the Mamanuca Group.

Sea Fiji, one of the main suppliers of transfers from Denarau to resorts within the Group say that they have seen no increase in numbers this year and over the last couple of months there has been a decline.

The ground operators say that the cost of travel in the group is one thing that concerns families, who can make significant savings by staying in mainland properties.

My Whitton says: “On the subject of average spend per tourist per day, I have seen some resort data where, this year, tourist spend per day has declined between six to ten per cent when compared to the same time last year. So visitors to Fiji are watching their money more than ever.

“We need to understand that Fiji is competing with Vanuatu and Bali and Thailand as a family destination that does offer more affordable meals, drinks, excursions and departure taxes.

“So in the family holiday market, value for money is critical, especially to Australian and New Zealand families who are already struggling with a lack of growth in their incomes and concerns about the stability of their jobs.

“And prices do add up. But on the flip side, visitors to Fiji do love the safety of Fiji and the warmth that is evident in our people and our culture.

“So the key for Rosie in the coming year is to make sure that we have a good spread of business with Australia and New Zealand as a base but that we keep investing in the Northern Hemisphere markets of America, Asia, the UK and Europe, special events groups, cruises ships.

“Air charters and the meetings and incentive market from these long haul markets in order to make up for any reduction in spend from the traditional markets.”

There appears to be no doubt that spending per tourist from Australia and to some extent New Zealand will contract.

It is also clear that smart operators are putting strategies in place to minimise the impact of this.

We have been lucky to have a broad base of sources for this story, but we would welcome any feedback from those involved in the tourism industry as we will be continuing to look at a wide range of other issues next week.


One experienced ground handling operator suggested that talking between the different sections of the industry was crucial to finding a way through the next year, commenting that for years there was constant interaction within sectors but that over the last two or three years this has stopped.

Maybe this paper can be the catalyst for starting this again through your feedback.

Five Square diwali dhamaka 2021

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