Palau's Ministry of Public Infrastructure, Industries and Commerce (MPIIC) is reducing charter flights from Hong Kong and Macau to half starting April 15, according to a Feb. 25 letters to airline executives.
In a Feb. 25 letter to airline executives of Mega Maldives, Dynamic Airways, Asiana Air and Palau Pacific Airways, MPIIC Minister Charles Obichang notified the companies that the government will impose new landing frequencies in light of the influx of Chinese tourists that fly to Palau via packaged tours.
However, Obichang yesterday told reporters that there will be an update to the planned reduction of flights and will release the information this week. Obichang said that the update is the result of his meeting with the airline executives Tuesday following receipt of the letter by the companies.
The Feb. 25 letter appears to be the government response to the growing number of Chinese visitors to the country and to address accommodation constraints that come up due to several hotels business practices of relying on tourists on package tours which squeezes out other markets.
"This change of landing frequencies is consistent with our nation's efforts to promote a healthy and balanced tourist sector. This requires that we diversify our tourist arrivals among the markets that serve Palau so that our nation does not become overly dependent on one market and that all markets have space to thrive in Palau." Obichang's letter stated.
Latest visitor arrivals statistics for the past month have shown that more tourists from Mainland China are visiting Palau, surpassing the numbers of visitors from key markets Japan and Taiwan. Despite the growth these tourists from China come as package tours.
An all-time high record of 140,784 tourists visited Palau in 2014, with arrivals from Mainland China surpassing key markets, Japan and Taiwan, according to Palau Visitor's Authority arrival report earlier.
Meanwhile the January 2015 visitor arrivals statistics showed that People's Republic of China (China) had 7.896 arrivals. The PVA report stated that this significant increase is directly linked with charter services between Palau and HKG/Macau by Dynamic Airways, Asiana Air, Palau Pacific Air and Mega Maldives. Some charter operations are flying daily services to Palau, the report stated.
These carriers have more than 98 percent of passengers with PRC passport holders.
The same January report stated that Japan had 3,188 arrivals, with accommodation capacity constraints has been indicated as one of the major reasons why it decreased compared to January 2014 arrivals. This was based on feedback from operators and travel agents.
ROC (Taiwan) with 1,253 arrivals based on January 2015 data. A big drop compared to the same month of last year.
Earlier, Remengasau told reporters that Palau government is seriously considering implementing visa restrictions for tourists from certain countries in order to control the influx of visitors in the country and instead attract high-end tourists.
A visa legislation has been filed before the House of Delegates but is still pending action.
Several sectors have expressed concerns that despite hotel rooms being available, some hotels owned by Chinese investors refused to book tourists other than those that book from Hong Kong or Macau through the charter airlines.
Minister Obichang said that with the charter flights reduction, "flights from Hong Kong and Macau will be more of equal footing with charters from other markets."
He added that currently scheduled flights are suffering because the customers are unable to find lodging.
"It is expected that this reduction will lead to some easing in the tight hotel room market that will allow other tourists to visit Palau on a scheduled flight," Obichang added.
He said as Palau modernized its infrastructure, in the meantime, landing schedule changes would take effect until modifications have been made to enable Palau to keep up with the surge.
Revenues
from the tourism influx has not increased despite the increasing number
of tourists in Palau in the past months, according to visitor trends
and charter flight review of the Palau Economic Advisory Group (EAG).
During
the press conference yesterday, Kaleb Udui, co-chair of the EAG
presented indicators that showed that although Palau receives an
all-time record high of 140,000 in 2014, this did not translate to
increased revenue.
Udui
said the information and data showed that many businesses that are
associated with the tourism industry such as accommodation and food
service activities, transportation and storage have not increased
significantly despite the surge in the number of tourists.
For
FY2013, tourism related industry has generated at least $12.9 million
revenues with only 105,066 visitors and only made at least $13.6 million
in 2014 with 140,000 tourists.
"The
revenues not growing. Part of this reason is we are not collecting as
much from tourists as we used to. More tourists doesn't mean more
money." Udui said.
Numbers
also showed that high-values tourists come to Palau for diving but
according to the business growth data for 2014, the diving business
sector was the slowest earner despite the rise in tourism.
The data also showed that several of the charter airlines have not even paid their landing fees in Palau.
Udui
said that the facts and data prepared, was a work of consultation with
economists and statisticians, which is also a result of work for the
past months.
"What's
happening now is happening very quickly, happening overnight, this is
the issue, we want to make sure to keep up with this change, accommodate
visitors and not ruin it for the visitors," Udui said.
He
added that the growth of tourism is happening very quickly and we do
not want only one country to dominate the tourism industry.
"We are watching closely and that we do not put all our eggs in one basket," he stressed.
Udui
said the private sector, or the tri-organization comprising of the
Palau Chamber of Commerce, Palau Visitors Authority and Belau Tourism
Association look at the cutting of charter flights in half as a
temporary solution until Palau modernizes its infrastructure and make
changes to protect Palau's people, culture, improvement and improve the
lives of the population not the tourists.
He said infrastructure improvements couldn't happen overnight.
Based
on the data presented that at the rate the trend is going, there will
be 149,000 visitors from Mainland China alone and overall tourism
numbers is estimated at 180,000. Udui said this projected numbers showed
that the Chinese market would have had captured 83 percent of the
tourism market by the end of this year.
PRC captures 61.6% share in
Feb. arrivals
Tourists'
visiting from Mainland China (PRC) has continued its stratospheric pace
relegating Japan and Taiwan--Palau's traditional source markets far
behind by capturing 61.6% share of overall arrivals in February. Japan
share of February arrivals was 15.8% while Taiwan share fell to a single
digit at 9.9%.
February
arrivals totaled 17,787, which is an increase of 6,714 or up by 60.6%
compared to the same month in last year, when 11,073 visited. PRC
national continue to show strong growth representing over 60% of the
total visitors arrivals. Japan and Taiwan registered decrease of about
-31% and -27% respectively.
The February date from the Palau Visitors Authority (PVA) reported that the decline for Japan and Taiwan "can be attributed to the continuing accommodation capacity constraints."
Korea shows a decrease of -29.2%. However, US Mainland shows a slight increase of 4.3% against the yearly average.
The following was taken from the PVA February report:
KEY MARKETS
*People's
Republic of China (China) with 10,955 arrivals in February representing
an increase of 9,178 (516.49%) compared to the same month last year
with 1, 777 arrivals.
With
the Chinese New Year starting in February, PRC continued to dominate
other markets with the direct charter services between ROR and HKG/Macau
on: Dynamic Airways, Asiana Air, Palau Pacific Air and Mega Maldives.
PRC Passport holders were also flying carriers from Korea: Asiania
Airlines (57.92%), Korean Air (57.16%) and from Taipei China Airlines
(11.44%) and Private planes (30.63%) into Palau.
*
Japan with 2,801 arrivals in February 2015 represent a decrease of
1,283 (-31.42%) compared to same month last year with 4,804 arrivals.
The decreasing trend is the result of the continuing accommodation
capacity constraints that has been reported as one of the major reasons
based on the feedback from tour operators and travel agents.
*ROC
(Taiwan) with 1,763 arrivals in February 2015 representing a decrease
of 647 (-26.85%) compared to the same month last year with 2,410
arrivals. Normally, this month coinciding with the Chinese New Year and
with Trans Asia resuming flights for the month, ROC visitor arrivals
should have increased. We will further investigate the cause of this
decrease.
*Korea
with 828 arrivals in February 2015 represent a decrease of 341 (29.17%)
compared to same month last year with 1,169 arrivals. Based on feedback
from tour operators, the decrease continues to be related to the
current accommodation capacity constraints. Further co-relation analysis
revealed that Korean Air and Asiana Airlines had more PRC National
passengers (57.16% and 57.92%) than Korean nationals. PRC nationals are
flying Korean Air via Beijing and Asiana Airlines via Shanghai direct to
Seoul then connecting to Palau rather than flying from mainland to Hong
Kong which will incur a layover of 1 to 2 days.
*North
America with 749 arrivals in February 2015 representing an increase of
31 (4.32%) compared to the same month last year with 718 arrivals. The
slight increase is attributed to the repeat customers and travel agents
efforts of booking ahead of time and their planning time is longer due
to the nature of long haul trips.
*Total
Europe including Russia with 439 arrivals in February 2015 represent a
decrease of 168 (-27.68%) compared with the same month last year with
607 arrivals.
An environmental disaster was averted Wednesday afternoon when EQPB, Koror State Rangers and Koror Planning Commission officials were called to the parking lot of the recently opened hotel in Malakal, Palau Vacation Hotel, due to raw sewerage from its overflowed holding tank draining to the ditch and to the pristine seawater at the front of the former popular cave-in bar.
Ironically in the morning of the same day, President Remengesau, his MPIIC Charles Obichang, Advisor Kaleb Udui, Jr., and other officials were on a radio program explaining the government moves to reduce by half the weekly charter flights from China through Hong Kong and Macau in order to curtail the influx of tourists from Mainland China which has gone through the roof in recent months. Also in the afternoon OEK oversight hearing, the lawmakers echoing the opposition to the flight reduction, from boat owners and drivers, hoteliers, transportation companies, tour operators and taxi drivers, slammed the government and chamber officials for being bias against Chinese, not understanding the economic forces, and acting irresponsibly which can hurt the growing economy and tourism business. The spill occurred apparently about the same time as the OEK was winding its hearing.
A hotel employee who spoke some English, said the hotel was not full but the manhole in the parking lot in front of the hotel where sewage passes through to the holding tank on the right side, clogged and overflowed before 5pm. It drained into the ditch then into the water but they were able to stop it. As officials were talking to the hotel people, an employee was frantically pumping sewage into a small hauling truck to be transported to the sewage treatment plant at ICE BOX. He said this would be his third trip while another hauling truck sits idle on side reportedly broken and another employee was putting sand behind it to keep the sewage from draining into the sea.
Both Koror and EQPB officials at the scene, said citation and fine can be issued for this incident and the hotel has been warned about such possibility in past several months about such a disaster in waiting. An EQPB official disclosed that there is a fine of up to $10,000 a day for this kind of violation.
The capacity of the hotel's holding tank is said to be 2,820 gallons and has to be emptied with 15 trips every day. The hotel was authorized to build a sewer holding tank at the entrance of the park across the street, a designated conservation area, to hold up to 34,000 gallons of sewage from the hotel, surrounding building and the park. After a public outcry and lawsuit and petition by Chiefs, women, and hundreds of citizens of Koror, the project was stopped last year.
However, it was resurrected this year with the endorsement of the Koror State Legislature and Koror Planning Commission but after a public hearing in January, not a single person supported it as all witnesses opposed it resulting in EQPB board rejecting the project in February.
Lawmakers chastise Tri-Org for recommending less charter flights
Lawmakers yesterday chastised members of tri-organization (Tri-Org) who appeared before a joint hearing on the tourism policies for recommendations made to the Executive Branch that they believe led to the decision to cut the charter flights starting April 15.
Delegate Marino Ngemaes, one of the lawmakers present in the hearing, said the decision to cut the flights into half without first consulting the Olbiil Era Kelulau could be a violation of the Constitution.
Ngemaes citing Article 9, subsection 53 of the Constitution said that it is the Congress' job to regulate commerce with foreign nations.
Last week, Palau's Ministry of Public Infrastructure, Industries and Commerce (MPIIC) announced that it is reducing charter flights from Hong Kong and Macau to half starting April 15, according to a Feb. 25 letter to airline executives.
In a Feb. 25 letter to airline executives of Mega Maldives, Dynamic Airways, Asiana Air and Palau Pacific Airways, MPIIC Minister Charles Obichang notified the companies that the government will impose new landing frequencies in light of the influx of Chinese tourists that fly to Palau via packaged tours.
The new policy did not appear to sit well with several lawmakers citing that there are a number of sectors especially the Palauans whose lives and source of livelihood will be affected by the cut.
The cut would affect mostly charter flights bringing in mostly tourists from mainland China contributing to the tourism surge for the past months.
Sen. Hokkon Baules meanwhile, asked the Tri-Org comprising of the Palau Visitors Authority (PVA), Belau Tourism Association and the Palau Chamber of Commerce to re-consider their recommendations of cutting the flights in half by April.
"Why the drastic cut? Now I am asking you to meet with the president, call Minister Charles Obichang, and extend the charter flights schedule. Rather than next month, give them six more months, or even the end of this year," Baules told the tri-org representatives during the joint hearing.
He also rebuked members of the Palau Chamber of Commerce (PCOC) who appeared before the hearing of appearing to be "prejudiced against Chinese people."
"Let's get whatever we can get from the Chinese people," Baules said.
The charter flights upcoming reduction appears to be the government response to the growing number of Chinese visitors in the country and to address the accommodation constraints as a result with reported business practices imposed by hotels catering to Chinese tourists refusing to book other nationalities.
Sen. Joel Toribiong meanwhile questioned the tri-organization's failure to consult with the OEK during the recommendation process.
He said the regulation of commerce is under the OEK's duties, not the tri-organization.
Toribiong said that the cut would affect people's job like taxi drivers and bus drivers. He also noted that the influx of tourists should be taken as a positive development not negatively when the country's economy will suffer.
PVA Managing Director Nanae Singeo however clarified during the hearing that the policy direction is not meant to discriminate a particular nationality, but to diversify the market and not rely on one market.
Del. Lentcer Basilius meanwhile said that instead of diversifying the market, the policy should also look into diversifying tourism areas in Palau, taking tourism to other parts of the country.
Basilius said that the charter flights reduction could turn off the charter airlines and pull out their services in Palau all together.
Latest visitor arrivals statistics for the past month have shown that more tourists from Mainland China are visiting Palau, surpassing the numbers of visitors from key markets Japan and Taiwan. Despite the growth these tourists from China come as package tours.
Kaleb Udui, PCOC President said that their recommendations are based on statistics and consultation with several sectors and based on this are giving "the best advise" possible to tackle with the mass tourism.
The tri-org stressed that the influx of tourism especially from the mainland China is squeezing out other markets and cannot at present be handled by Palau's existing infrastructure and sewerage system.
CHINESE DESCEND ON REMOTE PALAU
AS WANDERLUST DEEPENS
- Written by Tribune Wires
- Monday, 16 March 2015 00:00
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Koror, Palau — Chinese tourists are flocking to the remote
Palau islands as China’s growing numbers of rich seek new frontiers abroad, but
not everyone in the Micronesian paradise is happy about it.Strapped into life-jackets and screaming with excitement, groups of boisterous Chinese thrill-seekers tear around Palau’s “Milky Way” lagoon on a flotilla of speedboats — a spectacle unfamiliar to locals just a few months ago.
Residents of the archipelago, part of the larger island group of Micronesia, are baffled as to why Chinese travelers represented almost 62 percent of all visitors in February — up from 16 percent in January 2014.
For businessman Du Chuang from Chengdu in China’s Sichuan province, it is because his increasingly wealthy countrymen are becoming more adventurous, smashing the stereotype of the herded package tour.
Du first started to travel by visiting Hainan, the Chinese island in the South China Sea currently witnessing a massive development of hotel resorts. He then ventured to Thailand before branching out to the Maldives.
“The corals here are more beautiful than Sanya (on Hainan),” the 46-year-old told AFP, scrolling through photos on his phone of a $1,400 helicopter trip over Palau’s Seventy Islands that he took his family on.
“Palau is small and magnificent,” added the owner of a successful IT company.
Hoteliers are catching on, with some establishments focusing on Chinese clientele booked out months in advance. At “Sea Passion Hotel” in Koror, 74 of their 75 rooms were occupied by Chinese visitors when AFP visited.
On a beach Chinese women wearing full body suits to protect themselves from the sun pose for selfies with husbands and boyfriends in sleeveless vests, which they send to their friends back home in China’s grey megacities.
“It’s like paradise.” Jia Yixin, a 30-year-old from Shanghai, didn’t think twice about paying $1,133 (1,000 euros) for a six-day trip to Palau that she found online.
“It is like paradise here,” she beamed. “In Shanghai the air is polluted but here people respect the environment,” Jia added.
Ironically it is the potential environmental impact of the Chinese invasion that is at the forefront of the minds of many of the islands’ 18,000 population.
Palau welcomed just shy of 141,000 visitors last year, up 34 percent on 2013, largely on the back of the Chinese visitors. But in February this year, mainland Chinese visitors leaped more than 500 percent year-on-year to 10,955 — more than half Palau’s total population.
Tourism accounts for close to 85 percent of Palau’s gross domestic product (GDP), and while profits are up, some are worried the long-term damage may be too great.
“This is a very sudden influx, so we are trying to understand the situation” said Nanae Singeo, managing director of the Palau Visitors Authority, the local tourist board.
“We have never experienced this much tourism before and the magnitude is really giving us a lot of pressure. We are a very tiny country with scarce resources so this sudden increase is an unknown challenge for us,” she added.
Palau has long catered for a particular type of visitor, with up to 70 percent of tourists coming for world-famous diving in stunning blue waters with pristine corals.
Japanese were traditionally the largest contingent, followed by Taiwanese and Korean visitors. But the majority of the new wave of Chinese tourists seem more interested — for now at least — in lounging on the beach.
“We are not seeing a growth rate to match the number of visitors,” said Singeo. “Tourists are up 34 percent so technically we should see economic benefits at the rate of 30 percent or more, but that’s not the case.”
“They wreck corals.” On the streets of Koror, some accused Chinese people of being noisy and disrespectful towards the environment.
“They wreck corals and throw their rubbish in the sea,” chided Norman, a taxi driver.
In another recent example, a Chinese tour operator named “Yellow Skin Tour” caused outrage in Palau with leaflets including photos of grinning Chinese tourists holding up turtles they had removed from the water — in one case by its flippers.
Residents have also accused Chinese tourists of being responsible for the deaths of some jellyfish at the natural wonder “Jellyfish Lake.”
Visitors are encouraged to marvel at the harmless creatures by floating on the surface, but some locals complain that many Chinese lack swimming skills and thrash around, disturbing the wildlife.
The Palau government is exploring ways to try to stem the tide of Chinese tourists to the western Pacific Ocean archipelago and this week said the number of charter flights from China would be halved next month.
President Tommy Remengesau said the move was not intended to discriminate against any nationality but was to prevent tourism from becoming too reliant on one market.
“Do we want to control growth or do we want growth to control us?” he asked reporters. “It will be irresponsible for me as a leader if this trend continues. I am not only looking at the present but, as a leader, I am looking after tomorrow.”
But the number of hotels, restaurants and guides in Palau now catering for a Chinese market would suggest that citizens of the world’s second-largest economy are likely to keep coming. AFP
"I will however reiterate here that the decision to reduce the number of flights from airlines flying between Palau and Hong Kong/Macau was not a unilateral one as you presumed. It is important to note that this measure was implemented to serve a much larger, holistic approach to our tourism challenges and goals," Obichang stated.
Obichang added that there could be a short-term negative implication but the long-term benefits outweigh the backlash from cutting the flights.
He also said the decision does not with any of the terms of air carrier permits.
Obichang also noted that United Airlines and Delta Airlines, two companies that are servicing scheduled, regular flights to Palau are affected by the charter flights.
CHINESE NATIONAL FLAG FOUND MOUNTED TO WRECKAGE OF SUNK WW2 ERA JAPANESE WARSHIP
Divers who went down to visit a sunk World War II era Japanese warship off the coast of Palau were surprised to find that someone had recently erected a large Chinese national flag.
According to Kyodo news, the flag was found on March 21 attached to the wreckage of the fleet oiler Iro of the Imperial Japanese Navy. The ship lies on the 40-meter deep seabed about 8 kilometers off Koror Island, Palau. The area is a popular spot for divers visiting the archipelago.
On March 31, 1944 the ship was attacked and sunk in Palau Harbor by United States Navy aircraft carrier fighters from the Fast Carrier Task Force during Operation Desecrate One.
The discovery comes at a rather sensitive time for the Japanese. Japan Times reports that early next month the Japanese Imperial Household will be visiting the site to commemorate those lost during the World War Two as part of a two-day visit to Palau.
Palau has recently become a popular destination for Chinese tourists, with some locals accusing the Chinese of being noisy and disrespectful when visiting the island.
(March 22, http://shanghailist.com/)
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