Tourism remains the main contributor of Palau’s economic growth despite reduction of visitor arrivals over the past 3 years according to reports from Asian Development Bank, IMF Report and Graduate School USA, Pacific Island Training Initiative and the Office of Statistics of the Republic of Palau.
Of the $132 .6 million total exports in Palau in 2018, tourism contributed $107.3 million or 81%. Visitor spending, also in 2018, contributed $117.3 million. This includes spending on accommodation, food and drink, tours, state fees, shopping, taxes and others.
Furthermore, tourism direct contribution to Gross Domestic Product is $58.9 million, a leading private sector segment of the economy since 2005.
Updated outlook for Palau’s economic growth this 2019 was down .5% due to reduced tourist arrival numbers. Prediction for 2020 is expected to increase as number of visitors are also predicted to rise.
Despite contribution of tourism industry to Palau’s economic growth, high volatility of Palau’s economy is also the result of high reliance on the tourism industry that is predicated on many external factors.
Going into 2020, a much more practical and structured tourism strategy must be in place to implement the policy of high quality and diversified tourism. Without it, Palau’s economy remains susceptible volatility and it’s development plans subject to unpredictable tourism industry.