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ADB: Palau tourism remains stagnant

By Mar-Vic Cagurangan

Palau has been open to international tourists since mid-2021, but the nation’s visitor industry remains at a standstill, according to Asian Development Bank.

Statistics showed that visitor arrivals have hit only about 14 percent of pre-pandemic levels by September 2022.

“This is largely driven by a more conservative approach to resuming international tourism by Palau’s main source markets in East Asia,” ADB stated in its Pacific Economic Monitor released this week.

“Community transmission of Covid-19 in early 2022—along with rigidities in restoring flight connections with major source markets for tourists, destination competition with neighboring economies in Asia, and lingering uncertainties to the global tourism outlook— constrain the outlook for near-term recovery,” ADB said.


The report noted that even with restored flight links, tourism from Japan— Palau’s second-largest source of tourists—to neighboring Guam and the Northern Mariana Islands remains at less than 5 percent of pre-pandemic levels as of July 2022.

“Outbound tourism from the United States (Palau’s fifth largest source market) to Asia and Oceania has also not recovered at the same pace as Australia and New Zealand that has benefited South Pacific destinations,” ADB said.

Rommel Rabanal, leader of the Palau section of the PEM report, noted that the Pacific nation, which is a tourism-driven economy, has been among the hardest hit by the adverse economic and social impacts of the Covid-19 pandemic.

Travel restrictions reduced tourist arrivals from close to 90,000 just prior to the pandemic to 41,753 in fiscal 2020 and further to just 3,407 in fiscal 2021.

“As a result, the economy contracted sharply by a cumulative 26.1 percent during this two-year period,” the report said.

The Palau government has launched a comprehensive package of temporary relief measures, with budget support from ADB, as an immediate measure to mitigate hardship.

The Coronavirus Relief One-Stop Shop or CROSS program, provided unemployment assistance, temporary jobs, concessional loans for businesses and expanded lifeline utility subsidies to help cushion the most severe socioeconomic impacts on affected businesses and workers.

Beyond restoring flight links, ADB recommended that Palau adopt innovative marketing and recovery strategies to reclaim lost ground, particularly considering the likely intense competition from neighboring destinations in Asia in the coming months and years.

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