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Home / Travel

No positives for Samoa's tourism industry in 2019-2020

RNZ
6 Jan, 2022 06:53 PM2 mins to read

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The impact of Covid-19 on Samoa's tourism industry has come to light. Photo / Unsplash

The impact of Covid-19 on Samoa's tourism industry has come to light. Photo / Unsplash

Samoa's backbone, the tourism industry recorded a decline of WST$375.3 million for the financial year 2019-2020, though well short of the WST$514.2 million during the previous fiscal year.

This was outlined in the Samoa Tourism Authority's annual report for the financial year 2020.

A major concern is the industry's existing loans turning into non-performing loans of more than WST$200 million.

The financial year 2020 is arguably the most challenging to date for the Samoa Tourism Authority with overall visitor expenditures decreasing.

The report said the total credit to the private sector as reported is approximately WST$2.02 billion at end of December 2019 with at least 13 per cent or WST$260 million outstanding debts for tourism businesses.

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Based on updates from Central Bank the outstanding debts for tourism at end of March 2020 was approximately WST$270 million with non-performing loans totalling WST$13.5 million.

There is now a high risk of these existing loans turning into non-performing loans over the next 12 months given the reduction in revenue base for these businesses due to the continued closure of Samoa's borders.

Access to external resources will be critical to ensure support is provided towards those who have lost their jobs as well as the financial viability of most small to medium operators.

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The total estimated direct employment impact from March to the end of June 2020 indicates at least 1137 staff were terminated from accommodation providers and 433 from support services.

The total direct impact to accommodation providers as at the end of May 2020 is over 1000 staff laid off since the closure of borders and businesses.

The grant from the government increased for the year under review of WST$13.26 million compared to the previous year of WST$11.96 million.

Tourism is the most affected sector but there's hope

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Fortunately, the Central Bank also forecasted that tourism will spearhead Samoa's economic recovery post-Covid-19.

Stimulus packages have played a major role in assisting in the areas of capacity building, domestic tourism, international destination marketing, wage subsidies, product development and incentives.

Overall, more fiscal policies and resources are required to ensure the tourism sector survives during these unprecedented times.

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