Tourism
How To Recover?
The North Pacific Visitor Industry Has Taken One Hit After Another
In 2003, tourism in the North Pacific is a game of endurance and optimism, a late round in a bruising bout. The bell for the first round rang in the mid-1990s when the Asian market collapsed. In the years to follow, most Micronesian islands battled just to get back to their 1997 visitor numbers. The islands managed to make some modest gains leading up to Sept. 11, 2001, before the terrorist attacks on America sparked a prolonged chain of events that carried far beyond the initial consumer fear of flying.
War in Afghanistan. The attacks in Bali. Another war in Iraq. By February of this year, when Lubuw Falanruw motioned toward the swirling image projected on a white screen behind him, travel industry executives gathered in Palau were truly ready for change. Falanruw, a Yapese man who runs the highly successful Honolulu-based Digital Mediums, was explaining to the Pacific Asia Travel Association Micronesia Chapter what the Internet could do for islands with low budgets. His company has designed much of the tourism software being used in Hawaii today.
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That was in February, before SARS. "Then, all of sudden, the bottom fell out," says John Salas, board chairman for the PATA chapter and professor at the University of Guam International School of Tourism.
For the first time since 1994, Guam, the biggest tourism destination in Micronesia, is expected to see less than one million visitors. In the Commonwealth of the Northern Mariana Islands, the number two destination, there was a 30 percent drop in visitors in May compared to the same month a year earlier, from 37,000 to 29,000. In Palau, the number three destination with about 60,000 annually, saw a 16 percent drop in visitors in May.
Island economies depend heavily on tourism and, when numbers fall dramatically, the hurt is deep. 9/11, the war on terrorism and SARS were a wake-up calls to the Islands that it was time for change. Then SARS. "We have to start giving ourselves a fresher face. We can't expect to do the things that we have done for years," Salas concludes.
As staff vice-president of sales and marketing for Continental Micronesia, Walter Dias is paid to recognize potential and develop it. So he can't help but notice some similarities between the islands in the Caribbean and in the North Pacific. Both island groups are tropical getaways for nearby wealthy nations with high-end tourists. Surely, those who fly from New York City to the Caribbean experience something similar to a Tokyo to Micronesia flight.
"I have always said Micronesia is in perfect position to become the Carib-bean of North Asia," Dias contends.
If this is to become a reality, it mean some islands like those in the Federated States of Micronesia and the Marshall Islands, have to develop their tourism infrastructure. And Palau, too, for that matter, where a new 53-mile road on its undeveloped big island, Babeldaob, should clear the way for big growth. The question for Palau and other North Pacific locations is how to grow without sacrificing the environment or their identities as Pacific Islanders. The damage to the reefs of the Caribbean is an ominous warning sign.
Tapping visitor potential also means beefed-up, gold-studded marketing campaigns that highlight the culture and warmth of the Pacific. Micronesian locations have historically failed to dedicate serious money to promoting themselves.
Admittedly there is little that islands can do to pull Japan out of its economic rut. Yet it is by far the biggest market for Micronesia, making up 70 percent of Continental Micronesia's business. And that economic rut is now deeper than ever. In April, outbound traffic in Japan dropped 42 percent compared to the previous year. "I don't think we have seen that kind of decline before," says Dias. "And travel agencies in Japan don't see any large recovery over the next two, three months."
That is where the endurance and optimism comes in.
As far as who to target, Japan must continue to be the number one market, since it has the most travelers in the region, and the highest spenders, experts say. Guam and Saipan are taking a good step by looking at Japan's growing silver market-senior citizens. The other Asian nations, like South Korea, Taiwan and China-a boundless potential market in years to come-are also good side bets. Americans are a smaller part of the market, but with PATA considering the development of a Web program to lead people to Micronesia, that traffic could also grow. Europeans are another small market, but a good one. Europeans have time to travel, usually stay for a few weeks, like less developed islands, and will travel to several locations. Sports tourism is also a budding development goal for Micronesia.
If Micronesia fails to act, it could soon find high-end developments popping up in places like Thailand and the Philippines providing cheaper alternatives and drawing away more and more of its market share. It is too early to know whether the tourism cooperation talks among the Islands will yield action. And time is the most dependable judge in Micronesia.
North Pacific Tourism
Here are some numbers for the North Pacific that tell the story for an industry struggling to survive in the tumult of the global village.
• Guam, the biggest North Pacific tourist destination by numbers, is expected to come in under one million visitors for the first time since 1994. Through May the Guam Visitors Bureau reported a 12 percent decrease overall for the year compared to 2002, which was an already low year in the wake of the 9/11 attacks.
• In the Commonwealth of the Northern Mariana Islands, like most of Micronesia, tourism peaked in 1997. But after the Asian market crash, visitors dropped 28 percent, from roughly 727,000 to 526,000. In 2002, they were down to 424,000 visitors. In 2003, May had 30 percent less travelers in the same month in 2002.
• Palau surveyed businesses in the wake of SARS and a flight ban on Taiwan-its second largest tourism market-and found that 20 percent were considering closing down. It was in mid-May that Taiwan flights stopped and visitors dropped 16 percent that month alone. June had no Taiwan flights so the visitor decline could only have continued.
• The Marshall Islands, unlike most other Micronesian places, has seen tourism grow 9.3 percent since 1997. But tourism officials there note that the Marshalls only began their push for greater tourism development in 1997, and they have yet to draw large numbers of people. The Marshalls had a modest 6,000 visitors arriving by plane in 2002.
• The Federated States of Micronesia has not developed tourism in any large-scale way by any means. But the impact of SARS and related issues was felt just the same. May arrivals dropped nearly 80 percent from the same month in 2002, from 1,400 to less than 300.
