Tonga to use PSDI-supported Crises Impacts Assessment to guide tourism recovery, resilience
NUKU’ALOFA, TONGA (14 December 2022)—The Pacific Private Sector Development Initiative (PSDI) has supported Tonga’s Ministry of Tourism (MoT) to assess the impact of Tropical Cyclone (TC) Harold, the Hunga Tonga-Hunga Ha’apai (HT-HH) volcanic eruption and tsunami, and COVID-19 restrictions on the country’s tourism sector.
The MoT’s Tonga Tourism Crises Impacts Assessment Report, launched 8 December 2022, estimates the cost of damages sustained from TC Harold in April 2020 and the HT-HH event in January 2022, as well as the economic losses from stalled inbound tourism due to COVID-19.
This includes Tonga’s 28-month COVID-19-induced international border closure between March 2020 and July 2022, and the local outbreak of COVID-19 in early 2022.
PSDI, in collaboration with the World Bank, surveyed 76 tourism businesses in Tonga—more than 20% of total tourism supply—on the crises’ impact on their operations. It also analyzed the MoT’s assessment of TC Harold and the HT-HH event, and gathered information from MoT, the Tonga Tourism Authority Board, and the Tonga Tourist Association.
The report found that TC Harold damaged at least 50 tourism businesses in Tonga, causing an estimated T$16 million (US$6.4 million) in damages. The HT-HH event resulted in at least 72 tourism businesses facing damage costs, totaling an estimated T$50 million (US$20 million).
In relation to COVID-19, only 22% of survey respondents said they operated throughout the entire 28-month border closure period. Combined business revenues were down 68% in 2020, 59% in 2021, and 92% in the first 6 months of 2022, compared to 2019.
The estimated overall loss of international direct tourism receipts in Tonga during the border closure period stands at T$455.3 million (US$183 million).
“The disruptions Tonga has experienced over the past 2.5 years have deeply affected Tonga’s people, tourism sector, and wider economy,” Tonga Minister of Foreign Affairs and Minister of Tourism Fekitamoeloa Katoa ‘Utoikamanu said. “The insights from this assessment will inform the Government of Tonga’s tourism recovery policy and actions.”
Tonga Minister of Tourism Fekitamoeloa Katoa ‘Utoikamanu launches the Tonga Tourism Crises Impacts Assessment Report.
The Tonga Tourism Crises Impacts Assessment Report offers several recommendations for Tonga’s tourism sector, including the restoration and resumption of viable tourism operations; reconstruction of tourism infrastructure; and reassurance to tourism target markets that Tonga is safe, ready for tourist arrivals, and offering compelling experiences.
In light of these recommendations, PSDI will support MoT to devise a new Tonga Tourism Sector roadmap, paving the way for a more sustainable and resilient industry.
“Tonga’s tourism businesses face particularly challenging conditions, which will delay their recovery from these crises,” PSDI Tourism Specialist Sara Currie said. “PSDI is pleased to support Tonga’s Ministry of Tourism with this important assessment work.”
PSDI is an Asian Development Bank (ADB) technical assistance program undertaken in partnership with the Governments of Australia and New Zealand. PSDI supports ADB's 14 Pacific developing member countries to improve the enabling environment for business and to achieve inclusive, private sector-led economic growth.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.
KEY FINDINGS—TONGA TOURISM CRISES IMPACTS ASSESSMENT REPORT:
Tropical Cyclone (TC) Harold, April 2020:
- Tourism businesses damaged: 50
- Tourism businesses “completely destroyed” or “severely damaged”: 12
- Cost of damages: T$16 million (US$6.4 million)
Hunga Tonga-Hunga Ha’apai (HT-HH) event, January 2022:
- Tourism businesses which faced damage costs: At least 72
- Tourism businesses “completely destroyed” or “severely damaged”: 26
- Cost of damages: T$50 million (US$20 million)
- Properties “completely destroyed” twice (by both TC Harold and HT-HH): 3
- Combined business revenue decline (compared to 2019):
- 2020: 68%
- 2021: 59%
- 2022 (first 6 months): 92%
- Tourism businesses which closed for some or all of the border closure period: 78%
- Total loss of international direct tourism receipts over border closure period:
T$455.3 million (US$183 million)
- Anticipated loss of international direct tourism receipts, August 2022 to December 2023:
T$91.5 million (US$37 million)