PALAU – The Asian Development Bank says Palau is facing urgent infrastructure and environmental challenges due to its booming tourism industry.

In a just released report assessing Palau’s private sector, the ADB says the rapid growth of what it calls low-end tourism could damage Palau’s natural environment and World Heritage sites, which are crucial to maintaining its thriving tourism industry and generating revenue for the country.

That comes after a huge influx of tourists in 2015 and 2016, due mostly to an increase in package tours, primarily from mainland China.

The report’s author, economist Paul Holden, says that the key focus is on the type and number of tourists that Palau wants to attract.

“What has happened over the last few years is that there has been an explosion in tourism, which has taken the number of tourist arrivals in the past five years from somewhere in the region of 100,000 to close to 180,000.

“But many people say that the growth of the tourism industry is threatening to degrade the natural beauty sites in Palau.

“In fact, they have two World Heritage sites there and the big danger is that these sites will become overcrowded and thereby destroy the experience.

“So, the centre of the debate is the type of tourists that they would like to see. The word or phrase that they’re using is that they’re seeking to attract high-value tourists.

“By that they don’t necessarily mean tourists who spend a lot but really who come to savour the experience of the islands and their natural beauty as a whole and in doing so wish to return on a regular basis, to tell their friends about it, and so on.

Holden says there are a number of issues involving the protection of Palau’s environment.

“One of which is their ability to enforce the existing laws and regulations – and secondly to develop new regulations that will protect the environment.

“Last year in 2016, there was a slowdown – this is partly attributable I think to the slowdown of economic growth in China, but secondly the fact that the US dollar, which is the currency of Palau, has appreciated very strongly against virtually every other currency in the world so Palau has become significantly more expensive than it was.

“So to some degree, there is a natural switch back towards higher-spending tourists but there are many other issues that the country has to confront in order to realise its vision of a destination for high-value tourists.

Holden says Palauans are very aware of the impact large numbers of tourists are having on what is quite a small country.

“ I have just finished a visit to the country where I presented this private sector assessment and one feature of Palau, which I think is very encouraging, is the degree to which the wider population are involved in the debate regarding the future of the country.

“One of the questions at the economic symposium, which I was a key-note speaker, was who exactly are we developing the tourism sector for?

“Are Palauans benefiting from the increase in the number of visitors?

“This is, I think, a very healthy development in terms of ensuring that there is a degree of consensus in the country regarding how they move forward.

“There’s no question that Palauans are benefiting from tourism but at the same time I think a number are quite dismayed at the overrunning of some of the facilities.

“So what has still not happened is a clear articulation of the policies that are necessary to put in place in order to realise the ‘pristine paradise Palau’ vision of the tourist industry and its role in society.

“ There are all sorts of issues like land-use planning, overstretching of water and waste facilities, garbage – some pretty fundamental things.

“The situation is urgent. They do not have a long window in terms of being able to indefinitely postpone taking some of the more difficult decisions that have to be made.”

Holden says the issues facing Palau are relevant to a lot of other small Pacific nations.

“This issue is of particular urgency to Palauans is – with the possible exception of the Cook Islands – by far the most evolved tourism industry in the Pacific.”

- RNZI