Palau Correspondent


KOROR, Palau — The ongoing threat of coronavirus will have a negative impact on Palau’s tourism industry, as many hotels and tour operators are receiving cancellations due to travel restrictions until March 31, which will impact the industry.

Flight restrictions have been implemented since Feb. 1 and will be enforced until March 31. The government said it anticipated the expected an impact on tourism arrivals.

Foreign travelers originating from or transiting through mainland China, Hong Kong and Macau to Palau and cruise ships originating from or transiting through mainland China, Hong Kong or Macau to Palau  are restricted from entering Palau until March 31.

Alan Seid, vice chairman of the board of directors and shareholder of the Palasia Hotel, said the impact of the coronavirus at Palasia has been some cancellation of reservations.

“A majority of the cancellation has been from the China market. The blessing has been an increase from Japanese tourists due to new charter flights from Narita. We accept the fact that booking will go down and we will lose revenue but it is understood with the coronavirus situation. We are hopeful that this situation is settled soon. We have been through this with SARS in the past and fully prepared for it,” he said.

The Ministry of Health has also issued a travel alert on Feb. 24 recommending avoidance of non-essential travel to mainland China, Hong Kong, Macau, Japan and South Korea.

President Tommy E. Remengesau Jr., in his submission of the supplemental budget on Feb. 18, told lawmakers that although the nation had a good first quarter in fiscal 2020, he anticipates that the next quarter will show the impact of coronavirus, since  Palau closed its borders to travelers from China and those transiting that have been to China.

He is confident that the numbers from other destinations, like Japan and Taiwan will pick up. He also said it was a good decision for Palau to cut package tours flights from China in 2015, which otherwise would have a more devastating effect on the nation now.

 “We reduced those flights because we believed in quality over quantity. We faced a backlash from some members of the community, but we maintained our position. Had we not reduced those flights, and with over 80% of our visitors coming from China, the impact of this current situation with coronavirus would have been devastating to our economy,” Remengesau said at Feb. 5 press conference.

 “We will feel a dip in our economy,” said Finance Minister Elbuchel Sadang, “but it’s manageable.”  Sadang said fortunately Palau has $23.7 million in reserve funds, which can be tapped when revenues from tourism take a dip. He also said with the inaugural flight of Skymark from Japan the loss of the China market would not be so severe.

Palau reached a historic high of 160,000 visitors in 2015, with visitors from the People’s Republic of China representing almost 70% of the total market share.

 In 2019, Palau had just above 94,000 visitors. Only 25% of the market share was from China.

 The Palau Visitors Authority said about 99% of the cancellations are from China.

In the supplemental budget, the president also proposed an amount of $300,000 for the Bureau of Public Health to cover the cost of the emergency response to the coronavirus. The money would help buy equipment such as automated temperature sensor equipment, and with supplies, and testing. mbj