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Bank not optimistic about Samoa's tourism prospects

Promoting domestic tourism and developing travel bubbles may help other Pacific Islands revive their tourism industries but the Asian Development Bank (A.D.B.) does not appear optimistic about Samoa’s odds.

In a new report released this month, A.D.B. economists, Matthias Helbe and Anna Fink report among the highly-tourism dependent economies like Samoa, local remedies to the tourism dilemma come with challenges.

The International Air Transport Association (IATA) predicts travel will not return to pre-COVID-19 levels for another five years, so countries will have to depend on their own people for their economic recovery.

In the report, the A.D.B. analyses ways forward for the tourism industry’s recovery across the Asia Pacific. Among different strategies, some countries are predicted to fare better than others, while Samoa appears to lose out every time. 

“Across Asia and the Pacific, in more than half of cases, domestic tourism technically has the potential to fully replace foreign visitors,” the economists state, careful to emphasise that it is a potential reality only. 

“This may not be the case, however, in economies that depend heavily on tourism, in that they would still face large gaps in demand even if they could fully mobilize domestic tourism.”

Tourism accounts for 22.4 per cent of Samoa’s gross domestic product, according to United Nations World Tourism Organisation statistics.  

In their scenario analysis where domestic tourists could replace foreign tourists, Samoa is among 22 countries that show a “tourism deficit,” alongside Fiji, Thailand and 

When based on Samoa’s arrival figures, the deficit comes to nearly 80 per cent, suggesting there would be a major gap in the country’s ability to replace its international tourism, even if domestic tourism is fully mobilised. 

In a scenario based on tourism expenditure Samoa’s deficit comes closer to 100 per cent, alongside Vanuatu, Fiji, and Myanmar. 

Countries more likely to succeed with domestic tourism are Kiribati and Papua New Guinea, the research suggests. 

“Promoting domestic tourism is not straightforward,” the researchers state.

“Many people will have less disposable income for leisure activities, and social distancing and other containment measures may make it difficult or unappealing.

“Equally, where the tourism attractions are geared toward foreign markets it may take time to reorient toward domestic preferences. In many cases there is also a clear difference in spending between domestic and foreign tourists.”

To try a different recovery method, countries could work towards negotiating travel bubbles with partners, either globally or regionally, with attached health conditions. 

Several countries in Asia have already been experimenting with these arrangements, like between China and Korea, which is limited to business travellers. 

China has also opened up to Singapore, and Japan and Vietnam have a travel arrangement too, both of which are for business travel only. 

Regionally, just two arrangements are under negotiation, the trans-Tasman bubble between Australia and New Zealand, and the Bula Bubble between Australia, New Zealand and Fiji, both of which are largely targeted towards tourists. 

“The Australian Chamber of Commerce and Industry not only aims to attract the 1.4 million visitors that came to Australia from New Zealand before COVID-19; ideally, Australia would like to receive all 3.1 million New Zealanders that travelled abroad in 2019,” the report states.

“While it might be desirable for the receiving economy to attract all outbound tourists of the partner economy, it is unlikely that this could be achieved.”

This second strategy is not hugely promising, the researchers suggest. When analysing a country’s potential to replace international tourism with a travel bubble with its largest travel partner, they found just seven could significantly succeed.

In the Pacific, a theoretical bubble between the Marshall Islands and the United States could hit the 100 per cent mark. But a bubble between Samoa and New Zealand is predicted to have an approximately 40 per cent tourism deficit. 

The economists predict a more regional travel bubble for the Pacific would “substantially improve the situation.

“The main reason is that many tourists to the Pacific islands originate from Australia and New Zealand.”

But under a closer look, Samoa is still predicted to expect a tourism deficit of around 20 per cent, which the Cook Islands, Tuvalu and Vanuatu are expected to get more than 80 per cent of their tourism numbers back in a regional bubble arrangement. 

Not only that, but the health situation could mean a regional arrangement is far from easily organised.

“In the Pacific, potential is high as several Pacific islands are COVID-19 free. However, their preparedness to handle an outbreak is limited. Therefore, only Australia and New Zealand could enter into bilateral deals with their preferred partner.

“It is also very important to remember that travel bubbles are only a second-best option, which should only be temporarily in place.

“If the pandemic allows, a nondiscriminatory approach should be preferred."

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