Palau Pacific Resort Exterior. Images powered by Leonardo.

Hotels in Palau are already feeling the pinch of the COVID-19 coronavirus impact as travel restrictions and the overall reluctance of tourists to travel are threatening businesses.

Businesses like hotels rely on the tourism industry to bring in people to stay at their hotels for their services and businesses to keep it running.

Palau Royal Resort (PRR) said that they have been experiencing room cancellations stemming from fears of coronavirus.  PRR said it is expecting a hotel occupancy drop of at least 54%, covering the months of February, March, and April.

The hotel said occupancy has decreased by 4% towards the end of January, 16% in February and cancellation of future reservations for March with 7% and April with 2% said PRR General Manager Fumihiko Kitakuni.

PRR is experiencing these drops because they had a lot of people coming in through the Chinese-Asian tour packages.

PRR had a good occupancy in prior years, Kitakuni said the hotel reached their highest 139% of total revenue in 2018 and 2019 was 134%.

“Now that the Chinese travel has been put up. The number of Chinese has dropped to zero and their residents consist of Japanese and the Taiwanese community and a few Koreans. We also don’t have anyone from the U.S or Europe staying at their hotel,” Kitakuni noted.

Like PRR, Palau Central Hotel has also experienced cancellations, by at least 10 percent. The hotel, however, is not as impacted as PRR because it doesn’t solely cater to the Chinese-Asian market.

Jeff Barabe, of Palau Central Hotel, said they have not focused on the Asian-Chinese market but have had some cancellations from the Japanese market.

Palau Central Hotel is bracing for more drops in the future and is putting in place financial conservation measures in anticipation of the drop.

Both hotels said they are also stepping up precautionary measures in the wake of COVID-19.

The hotels are also making every effort to keep guests safe and informed.

Earlier President Remengesau had asked the Bureau of Tourism and the Palau Visitors Authority to work with the private sector to “assess business projections with expected impacts the outbreak will have on the economy.”