Under the assumption of long-term visitor growth of three percent, tourism will continue to be

important to PIC11 economies. However, long-term growth at this level will not generate significant
changes in economic performance of the PIC11s. For this, it will be necessary to significantly expand
demand in selected segments. Significant growth in visitor arrivals above trend is possible. 0 200 400
600 800 1000 1200 1400 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
2010 2011 2012 2013 2014 Visitor Arrivals (thousands) Other PICs Vanuatu Samoa PNG Palau Fiji iii
Transformational Opportunities 9. Based on long-term performance, emerging market trends, specific
product opportunities and the natural attractions and selling points, the Pacific has opportunities that
hold the potential to generate transformational change. These opportunities include aggressively
targeting the Chinese visitor market, engaging more directly in the rapidly growing Pacific cruising
product, expansion of the high-end resort market and capitalizing on the aging population in key origin
markets by developing a long-stay visitor opportunity for retirees. These opportunities have the
potential to deliver substantially higher revenues but will also bring impacts that will need to be
managed. Capturing the Chinese Market 10. The market share of Chinese tourists can be increased
substantially beyond its current seven percent. Between 2009 and 2014, Chinese visitors to PIC11 grew
by an average of 27 percent per annum, and now represent seven percent of the inbound market. Based
on the experience of other destinations that implemented well-targeted policy interventions that
facilitated improved access, such as aviation and visa policies, together with targeted marketing, the
annual growth rate of Chinese arrivals could continue to grow at 20 percent for the next 10 to 20 years
in most PIC11. Limitations on carrying capacity and absorption rates would act to reduce the growth of
Chinese visitors to PIC11s over time. 11. The PIC11 can attract nearly one million Chinese tourists in
2040. Chinese visitors could represent a 26 percent share of total PIC11 tourism, resulting in a figure of
approximately 965,000 visitors by 2040. At that time the PIC11 would welcome nearly 3.7 million
international tourists. Compared to a long term growth rate of around five percent for most PIC11, the
additionality of the transformational scenario estimates the economic potential of the Chinese market
opportunity in 2040 at over 660,000 additional tourists, which bring nearly US$950 million in tourism
receipts, and generate nearly 65,200 additional jobs. Additional transformational impact in 2040
Increasing the Chinese Market 660,000tourists US$947mreceipts 65,200jobs $36.9mairport taxes
Source: Author’s estimations iv Home-basing cruise ships 12. Home-basing cruise ships in the Pacific can
generate multiplier effects in the hosting country, and open up new destinations. The growth of the
Australian market has transformed cruising in the Pacific. Since 2004, cruising to all destinations by
Australians has grown at an annual rate of 20 percent, reaching 1 million passengers in 2014. One way
to increase both the number of visitors to the PIC11 and the socioeconomic impact of cruising is by
basing large cruise ships in the islands. Not only would this bring benefits to the homeport country, but
it would also bring more cruise arrivals to PICs that are too far from Australia to reach on the most
popular 7-10 day-length cruises. In 2040, the economic potential of the home-basing cruise ships market
opportunity is estimated at nearly 266,000 tourists, which bring nearly US$67 million in tourism
receipts, and generate nearly 4,700 jobs. The country hosting the cruise ship can earn over two thirds of
these benefits.