As Fiji’s largest foreign exchange earner pre-COVID-19, the tourism and hospitality sectors went into free fall when international borders closed due to the spread of the pandemic, and the nation entered into lock down mode.
Up to 112,000 workers were out of work almost overnight, most of whom worked in Fiji’s hotels and resorts. Most of them are now surviving by drawing on their life savings at Fiji’s National Provident Fund.
As workers adjust to the new normal, Fantasha Lockington and her team at the Fiji Hotel and Tourism Association have been busy helping members to prepare for the wholesale operational and indeed, cultural changes, the industry requires.
She explains some of these changes in an interview with Islands Business publisher, Samisoni Pareti:
Fantasha Lockington: We’ve worked with the Ministry of Health and the Ministry of Tourism for COVID safe guidelines to be put in place. The Association is using those guidelines as a baseline for what we do in the tourism industry.
Obviously the larger branding properties would defer to their overseas brands or their sister hotels overseas to incorporate the requirements that get rolled out throughout the hotels. But we want to make sure that our medium and small size operators that don’t have those linkages can also do best practice themselves. So, we’ve used the government’s COVID-safe guidelines and we are putting more details into it that identify with the different tourism segments.
The idea is that we ensure that we provide the confidence level that potential visitors would need for them to actually book. Fiji will need to have every single business buy into this COVID-safe guideline. It can’t be just tourism businesses that need to do it. If you’re a bank and your clients are tourism businesses, you must be implementing these things too. If you’re a supplier of some sort, and you’re going to have to drop off some supplies at a hotel you need to do this as well.
That includes downloading the Fiji Care app, and already at the hotels if you check in now, they will be scanning you at the entrance of the door, they will be taking your name, they will be reminding you to download the app. Fiji Airways is making it compulsory to download the app to make sure they can do contact tracing. We’re just putting together the last part of the plan which will determine the training section of what the Ministry of Health would also need in terms of the special medical practices.
If somebody is sick what do you do, what are the processes, how do you isolate them, who do you call, and then what is the process that works from there. Every possible scenario or question has to be responded to.
I will be working with TLTB (iTaukei Land Trust Board), FITBA (the backpacker’s association), SOFTA, the transfer vessels and companies that take tourists out to the outer islands. They are not all our members out in the islands, so we want to be able to touch base with them and I’m hoping that TLTB can assist us do that, and we’re signing an MOU with them very soon to promote a closer working relationship with locally owned businesses that they work with.
Read the full interview at https://emag.islandsbusiness.com/
One of Fiji’s oldest island resorts is now on the market.
Beachcomber Island Resort in the Mamanuca islands in Western Viti Levu was chalked onto the “For Sale” list by Bayleys Real Estate this week with a price tag of F$25 million.
“From time to time exceptional real estate opportunities are presented to the international market place. This is a one-time opportunity,” Bayleys’ advertisement reads.
“There are more opportunities for further development such as integrated resort rooms, villas, apartments, and residential homes. Interest has also been shown in the possibility of adding marina facilities to enhance the new resorts and residential lifestyle.”
Beachcomber Island Resort is the latest addition to the list of resorts currently on the market in Fiji, a list that may well grow if Fiji’s tourism sector fails to recover from the COVID-19 pandemic any time soon.
According to the Fiji Hotel and Tourism Association (FHTA), the struggle to stay in business will become more pronounced over the coming weeks or months if the current crippling impact of COVID-19 on Fiji’s tourism sector drags on.
“Many properties such as Beachcomber, Pullman, The Pearl, Smugglers Cove, etc, were listed for sale before the onset of COVID-related restrictions in Fiji and subsequent dip in the tourism industry. Other properties will be fighting hard to buck that trend of pulling up pegs and selling and this is evident by the mass layoffs/redundancies that have been hitting the news headlines in recent months,” FHTA chief executive officer Fantasha Lockington told Islands Business.
“No business will want to close up shop for good, so properties have gone into saver mode - reducing expenditure and focusing on domestic guests.”
The big resorts may be better equipped with cash to hold on longer, but the hardest hit, said Lockington, will be the smaller properties.
“Even if they release all their staff and minimise expenses, they still have substantial fixed payments to make and these don't just disappear. Sure they have been given grace periods by the various financial institutions but that all comes to an end in the next few weeks. We are sure that some of the properties that closed their doors because of COVID-19, have closed their doors for good. In the next few months, we project that the economic downturn will finally reach Suva and will affect many other industries and sectors. Tourism brought in 46% of Fiji's GDP income last year and it touches every person in Fiji, directly and indirectly. So the tourism downturn will hit the hardest in the next few months and Government has forecasted this, hence their historic National Budget,” said Lockington.
The extent of COVID-19’s impact upon Fiji’s tourism sector was recently quantified in a business survey conducted in May and released last week by the International Finance Corporation.
The survey – of which 620 of the over 3,500 respondents were tourism specific businesses – found that 29% (or over 170 tourism specific businesses) expected to go bankrupt if things don’t change by November.
The meltdown also involved a huge sector-wide loss of income, resulting in most operators identifying the “lack of cash flow to cover operating expenses” as their topmost concern.
“Things are not good, as you would expect. The industry cannot fully rely on domestic tourism due to the low revenue generation so they are struggling to even break-even, said Lockington.
“But FHTA is working together with Government and other tourism stakeholders to ensure that when the borders do reopen, Fiji is ready to compete with all the other tourism hotspots around the world.”
Beachcomber Island Resort owner Brendan Hannon was not available for comment when contacted by Islands Business.
The resort traces its roots back to the 1950s when it was founded by veteran local hotelier the late Dan Costello, who also started the equally well-known Beachcomber Cruises to complement the hotel business.
Costello, a descendant of the pioneering Costello family that came to Fiji in the early 1920s, was also a founding member of the Fiji Hotel and Tourism Association and remained a strong supporter of the development of Fiji’s tourism industry until his death in 2010.
At around that time too, Beachcomber Island Resort, which had quickly become a popular spot for young travellers, was bought by Hannon, who now also owns and operates Anchorage Beach Resort in the Mamanucas and Funky Fish Resort in Malolo.
Beachcomber Island Resort is about 30 minutes by sea from Port Denarau.
Responses to the Fiji budget have been mixed. A summary follows.
The Fiji Hotel and Tourism Association has welcomed the budget and its move to reduce overheads, calling it “bold and innovative.”
“We are confident that our members will support the initiatives to ensure that the savings are passed on to the customers and know they are keen to provide value for money packages to rekindle the tourism industry. Government has taken a critical enabling step towards this goal.
The Association says it is optimistic that quarantine-free travel will start soon with New Zealand, and shortly thereafter with Australia. Many Fiji tourism operators are currently participating in the “Love our Locals” campaign. The FHTA says while domestic consumption is “highly appreciated”, its not sufficient for the industry’s long term sustainability.
The Unity Fiji party headed by former Reserve Bank of Fiji Governor Savenaca Narube has dubbed the budget “a road to nowhere” rather than a road to recovery.
“Those who have lost their incomes saw only more depletion of their retirement funds. The unemployed did not see any help for them. The self-employed who are not members of the FNPF now realise that they have to fend for themselves. This is tragic.”
Narube says the budget favours the rich.
“Are buying vehicles to clog our already congested roads, getting drunk to drown the social impact of the crisis, and living beyond our means through hire purchases of white goods, priorities for us? This is unbelievable.”
Narube also asked for protections on debt for 2021-22 and how fiscal stability will be restored in the medium term. He believes the allocation for health is insufficient to prepare in case of a second round of the coronavirus and that the budget hasn’t addressed the need for economic diversification.
The Fiji Labour Party takes issue with the “blanket reduction or removal of Customs duties on a host of imported goods and luxury items” in the budget.
“The cheaper imports do little to alleviate the suffering of the thousands of our workers who have lost their jobs or have been put on highly reduced pays or working hours due to the impact of COVID-19. Indeed, there is very little provision in the Budget to assist the thousands in the informal sector who are not members of the FNPF,” FLP leader Mahendra Chaudhry said.
“It would have been a lot more helpful if the Minister had removed the 9% VAT from staple food items which he imposed in the 2016 Budget,” Chaudhry said.
Chaudhry is also General Secretary of the National Farmers Union and says the reduction in the government-guaranteed cane price, from $85 a tonne to $70 is a “gross breach of trust.”
He says at $15 a tonne less, “growers are being short-changed by as much as $28 million based on the forecast of 1.8 million tonnes of cane for the 2020 season.”