The tourism situation

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Dear Editor,

Re: Dumb decision from one party government 

Siaosi, arrivals do not equal Tourism. The devil is in the Detail!

I have to use 2016 figures, as there has not been any figures published since April 2017, probably due to the ongoing decrease in visitors.

According to STA and the Bureau of Statistics, the Visitors only amount to 74% of Arrivals during 2016, totalling about 146,000 people.

Of these the official figure for Tourists was 39.2% or about 58,000 as opposed to returning Samoan Visiting Friends and Relatives (VFR’s) at 33.4% or about 49,000.

However, 55.7% of Visitors, 82,000 say they are staying in private accommodation or with friends and relatives, so the real VFR figure is really about 50% or 73,000 people and the real Tourist figure is probably more like 22% or about 32,000 people.

How can this be? Simple, many of the real VFR’s legitimately tick the Holiday box on their incoming immigration card, as they are taking their annual holiday to come home to Visit Friends and Relatives, so they get counted as Tourists despite the fact that they are not.

Why does this matter? The economic benefits of Tourists and VFR’s are quite different, with both spending money here in very different ways. Tourists spend money on Accommodation, Car or Motorcycle Rental, Food and Beverage and Tourist attractions or Tours.

VFR’s don’t spend as much on accommodation, tourist attractions or Tours, nor do they go to restaurants as much, however they do rent Cars or Vans rather than motorcycles and they do spend a lot of money with local supermarkets, building supplies and the like, not to mention the cash they hand out to family, friends and anyone else that comes to pay their respects.

All in all on a per head basis, VFR’s inject much more into the Samoan economy than Tourists do, as well as being more than double the number of real tourists.

Another major difference between the VFR and Tourists is the growth potential with more flights and lower fares.

If more VFR’s come as a result, they will end up spending less per visit and may possibly see less money come into the Samoan economy if they end up buying more airfares from overseas carriers.

Money transfers will be reduced as they will be carrying more cash to their families more often. More tourists on the other hand will see a parallel increase in benefit to the Samoan economy.

So, if more is better, why worry about the details? The details are important if you are operating a business in the tourist sector, because you need to plan for anticipated demand and growth. It is no good planning for 58,000 tourists when the real figure is more like 22,000.

This is one of the reasons why so many accommodation providers are hurting, because they followed the advice of the authorities and have over-capitalised on building capacity without the necessary increased tourist numbers.

Since 2009, rooms in Samoa have grown more than 80%, while real Tourist figures, taking into account where people stay, have remained about the same.

For those of us that rely on Tourists, this is a worrying trend and goes directly against the premise that is put forward by the authorities, which is the Tourism sector is the largest contributor to the Samoan economy.

Clearly, Overseas Remittances and Cash spent by VFR’s is the largest contributor and the authorities have done a great job in developing this sector, possibly at the expense of Tourism.

Tourism is clearly the sector with the biggest potential for growth, as we have a claimed occupancy of only 40% and plenty of capacity to fill, meaning that there is little additional investment required to accommodate extra Tourists.

The NZ market delivers more than twice the number of Visitors compared to Australia, despite their population being about a quarter of the population of Australia’s eastern seaboard.

The smart money would be to look at developing more routes to Sydney, Brisbane and especially Melbourne, where people want to escape the cold winters, rather than fighting at taking over established routes from Auckland.

If the authorities were serious, they would work with every airline that wanted to come to Samoa, opening up new routes and routes that are underdeveloped, rather than trying to steal their existing business on established routes.

More flights will lead to lower prices and more tourists, but the same number of flights, with a national carrier that does not have the same economy of scale that Virgin has, will lead to more expensive flights and a continued drop in out tourist numbers, or another failed national carrier.

Please put aside all the animosity, ego and one-upmanship, give Virgin their license to continue their existing routes and provide incentives to all carriers to open up new routes, leading the way with Samoa Airways.

 

Kevin

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