No extra funds for tourism in Fiji

A report in the Fiji Times this morning says that in response to an appeal yesterday by the Fiji Visitors Bureau, Fiji’s Interim Government will not give them the extra $9m the FVB says the tourism industry needs to help it bounce back, wit the funds spent to date having apparently been wasted in failed consumer campaigns.

Interim Finance Minister Mahendra Chaudhry said the revised Budget had been delivered and the Fiji Visitors Bureau and Tourism Action Group would have to work within the $10million given to them.

The Fiji Visitors Bureau though says it needs another $9m for marketing to revive the industry which has been affected by the military takeover of last year, admitting that its activity to date in consumer advertising in Australia and New Zealand having failed.

Mr Chaudhry said budget allocations provided an economic platform to enable their immediate and medium term goals in securing government finances and making a quick economic recovery, adding, “I expect them to understand this. $10million is a lot of money”.

He said the industry stakeholders and Interim Government, both had to share the burden to market Fiji and both bodies should develop marketing strategies in a most efficient and effective manner to obtain the best results.

With the FVB and TAG given $10million for marketing but the industry had hoped for $15m for the bureau and $3.8m for TAG, FVB CEO Viliame Gavoka yesterday said tourism would not make the $1billion target this year but instead “we are targeting $888million which even at this stage looks daunting”.

He also admitted yesterday though that the consumer campaigns had failed, but added today, “The strategy we had was to saturate the markets with Fiji promotions and thereby build visitor arrivals together with improved yields from June onwards”.  “Saturation coverage cost money and with the reduced budget for FVB that will not happen, the reviewed promotional coverage for most of 2007 will be very thin.” 

“Yield will not likely improve and may even get worse as operators begin to dump their distress inventory cheaply just to stay afloat.”

“We may get the visitor numbers through the cheap deals, but it will be like people flocking to a ‘closing down sale’ and we cannot build our tourism industry on that kind of sale.”

Australia’s industry analysts warned FVB and TAG that discounting would not work and they have been proved correct in the failure of the consumer campaigns to date. 

No money has been spent on trade campaigns, which is where industry analysts and The Mole believing the funds allocated to consumer advertising would have been better spent, with even in the light of the failure of the consumer campaigns, Mr Gavoka still saying with the reduced budget they would still concentrate funds on purely tactical, cooperative marketing opportunities in conjunction with airlines and proven wholesale and retail partners place within the marketing mix, still appearing to rejecting the opportunity to work with the trade media, accessing the agent community, recognised critical influencers of travel from Australia and New Zealand, with recent surveys confirming that over 70% of Aussies and Kiwis use a travel agent for advice and booking overseas travel.

Fiji Islands and Hotels and Tourism Association president Dixon Seeto appears to have softened his stance, perhaps bending due to political pressure, from his strong stance for more funds yesterday, now saying that the association was happy that the tourism situation was been looked at realistically, adding that while the budget needed to be supplemented if the industry is to remain viable and visible to potential visitors in major source markets, the association understood that Mr Chaudhry weaved a budget in very difficult circumstances with many ministries requesting for funds.

He also said, “While we appreciate this we just want to make the point that tourism has the greatest potential to bounce back quickly and also in doing that, has the ability to improve the country’s economic performance significantly.”

A report by The Mole