Fri. Feb 28th, 2020

Palau in better position to cope

Palau’s decision to cut down the number of direct flights from China in October of 2015 was the best decision, according to President Remengesau, especially now, considering how the corona virus is impacting economies around the world.

“We reduced those flights because we believed in quality over quantity.  We faced backlash from some members of the community but we maintained our position.  Had we not reduced those flights and with over 80% of our visitors coming from China, the impact of this current situation with corona virus would have been devastating to our economy,” expressed Remengesau.

“We will feel a dip in our economy,” said Finance Minister Elbuchel Sadang, “but it’s manageable.”  Minister Sadang cited that Palau has $23.7 million in reserve funds of which $13.2 million can be appropriated if necessary.  In addition, with inaugural flight of Skymark this month, the loss of China market will be offset to some degree with the new direct flights from Japan to Palau.

Sadang echoed Remengesau’s statements that Palau was in a better place due to its quality over quantity tourism policy and its decision to reduce direct flights from China to Palau.

In 2015, Palau reached over 160,000 visitors with visitors from People’s Republic of China representing almost 70% of the total market share. Palau government, in consultation with Palau’s private sector, decided to cut the number of charter flights in half by October of 2015.

Visitor arrivals have been declining each year since.  In 2016, the numbers dropped by 16% compared to 2015. In 2017 arrival numbers was little over 122,000. It dropped further to 106,000 in 2018.

In 2019, Palau had little over 94,000 visitors.Visitors from the People’s Republic of China represented 25% of the market share.

Finance Minister Sadang expressed confidence that Palau will not be adversely impacted by the COVID-19 outbreak.