International travel continues to grow rapidly, securing the tourism sector as a key driver of economic development.

According to the World Travel and Tourism Council, the sector indirectly accounted for over 40 percent of Fiji’s GDP in 2016.

The Council forecasts this contribution is expected to reach 44.9 percent of GDP by 2027.

The tourism industry directly supported 42,500 jobs in 2016 while the total contribution to employment stood at 119,000 jobs.

The Council says it’s imperative to pay more attention to what determines tourism arrivals in Fiji, not only from Australia and New Zealand, but also from other key markets.

These were some of the findings published in the Economics Group Working Paper titled “Modelling Fiji’s Tourism Arrivals”.

The objective of this paper is to model tourism arrivals in Fiji by estimating the determinants of tourist arrivals from eight source countries (Australia, New Zealand, US, Canada, Japan, UK, Continental Europe and South Korea) that account for around 85.0 percent of total tourist arrivals in Fiji.

The paper uses an Autoregressive Distributed Lag bounds test modelling approach to ascertain the elasticities of income and relative prices in demand for Fiji from these source countries.

The results highlight the key role played by income and prices for both the short and long haul markets, with the latter also affected by the attractiveness of other close by tourism destinations.

A careful study of economic activity and developments in source markets, rightly priced tourism products and closer collaborations with tourism bodies in Australia and New Zealand are the key policy recommendations of the study.

The Council says while the Pacific Islands and Rest of Asia also makes up a significant percentage of Fiji’s tourist arrivals, data constraints prevented further analysis on the two source markets.