Palau gov’t officials not worried about possible drop in PRC customers

By: L.N. Reklai

July 25, 2016 (Koror) “Yes, we have heard the news from China banning travel to Palau,” confirmed a Chinese tour operator yesterday during a phone interview regarding the recent news release stating that China issued travel ban to Palau, one of the 123 countries that People’s Republic of China does not have diplomatic relations with.


The operator agreed to talk to this paper only under anonymity. “We have talked about it among ourselves, the Chinese tour operators.  China always release travel advisories during summer when lots of people travel out.  This is the first time they named Palau,” added tour operator.

“I think it is just politics.  Recently they stopped travel to some African countries that have relationship with Taiwan.  I think they may be doing this because Palau has relationship with Taiwan and the new President of Taiwan is not too friendly with China but this is just my opinion,” added the PRC tour operator.

“We will just continue to market Palau because it is very beautiful and different destination.  We will wait, I think may be tourists will drop for little bit, but it will come back again,” the Chinese tour operator reiterated.

Palau Visitors Authority said that they are still trying to verify the information and expects to know by today.

Senator Phillip Reklai, Chairman of Senate Tourism Committee said that he had expected something like this to happen.  “We don’t have diplomatic relations with People’s Republic of China and PRC can just decide to stop its tourists from coming to Palau at anytime.   They come here, create a demand and then leave if Palau does not comply with its politics.  They’ve done this to other countries and not just Palau.  They do this for their own national objectives regardless of their people’s investments in the country,” stated Reklai.

“We haven’t heard anything from the airlines regarding this,” said Minister Charles Obichang yesterday.

Asked how this may impact Palau’s tourism numbers, Minister Obichang remained optimistic.  “This August All Nippon Airways (ANA) will be flying its Boeing 767-300 aircrafts to Palau.  These are 250+ seater planes.  Japan Airlines (JAL) will also be flying this August.  Japan –Palau route will be serviced directly by 3 airlines, ANA, JAL and Delta,” stated Obichang.  “We have 10 airlines servicing Palau right now,” he added.

Asked if the possible decline in PRC market will affect government budget this year, Minister Elbuchel Sadang of the Ministry of Finance assured that they have collected 83% of the projected revenue for FY 2016. “We are still in the middle of the 3rd Qtr. and we are 8% ahead of our targeted revenue collection for this year,” he reported.

“We balance the budget by increasing collection and controlling expenditures.  That is how we make sure we stay within our operating budget and it is also why we have been able to gain surplus,” assured Sadang.

The over 300% increase in number of visitors from PRC last year over the previous year made it very difficult for visitors from other markets to get room bookings in Palau leading to significant drop in other markets such as Japan, Republic of China-Taiwan, US, Europe and others.

Although the visitor numbers from the People’s Republic of China’s have been dropping consistently since January of this year, it remains the leading market source having over 50% of the total market in Palau.

Belau Tourism Association, Palau Chamber of Commerce and Palau Visitors Authority recommended a more diverse tourism market strategy for Palau to President Remengesau Jr.  last year and requested for reduction in frequency of charter flights from PRC.

This, in response to a concern that having one market dominating the industry, would expose Palau‘s tourism industry and economy to greater risk of events beyond Palau’s control, such as this recently reported  travel advisory from China.

Choice airlines for PRC customers are Palau Pacific Air, Asiana and Korean Air.  Other charter airlines are new entrants to the market, NOK Air and Lion Air.  All together, the airlines brought 6,294 customers from China to Palau last month. [/restrict]