Government has allocated $9,931,634 to help tourism with its strategies in this new financial year.
The industry contributes more than 60 per cent of the Cook Islands’ GDP and is vital to the country’s future.
Cook Islands Tourism chief executive officer Halatoa Fua said the corporation was pleased to retain the budget appropriation from the previous year.
He acknowledged government’s recognition of the importance of tourism as the key economic driver of the Cook Islands economy.
“This budget is sufficient to operate its current destination marketing strategies and destination development projects,” Fua said.
“While there is a need to increase budget allocations to facilitate growth in the tourism sector, we are mindful of the fiscal constraints as a whole of government.”
Strong growth in tourist arrivals in 2016/17 has ensured that tourism remains the focal point of economic activity in the Cook Islands.
After contracting by 0.9 per cent in 2014/15, the tourism market saw growth of 11 per cent in 2015/16.
In the 2016/17 financial year which ended last month, tourism was expected to have achieved a further growth of 12.8 per cent.
“Growth has been strong across most markets, with the largest growth seen in arrivals from the United States, Canada and Asia, with each expected to see growth of around 22 per cent, albeit from lower bases than New Zealand and Australia,” said a statement in the Book 1 of the Appropriation Bill.
“Tourist arrivals from Europe and New Zealand have also grown strongly, at 11.5 and 14.9 per cent respectively.”
Total arrivals for 2016/17 have been projected to surpass the 150,000 mark from 135,000 in 2015/16.
However, despite the strong growth in tourism arrivals, the statement says, the industry faces growing capacity constraints.
The limited number of accommodation providers restricts the number of tourists that can sustainably visit the Cook Islands at any given time, it adds.
Government admits the standard of infrastructure in the country also places further limits on capacity.
“Maximum tourist capacity in the Cook Islands is currently assumed to be 16,500 per month, based on the number of arrivals in July 2016,” the statement says.
“To ensure that higher visitor levels are sustainable, further investment is needed in room stock and general infrastructure, especially on Rarotonga where the industry is closer to saturation point.
“If arrivals continue to grow at the current rate without corresponding improvements to infrastructure, the likelihood of negative outcomes occurring increases, through increased costs to the tourism industry, decreased visitor satisfaction and the dissatisfaction of local residents.”
There are also plans to address capacity constraints through the current tourism strategy which is to encourage greater visitor numbers during the low and shoulder seasons.
This strategy intends to also diversify the visitor source market by attracting visitors from the northern hemisphere who traditionally travel south during their winter months.
“Diversifying the tourism base will decrease the current reliance on New Zealand tourists, and decrease the vulnerability to a natural disaster or economic downturn in New Zealand,” the statement says.