Palau is trying to attract wealthier travelers in the wake of decreased tourism from China.
Until recently, it was boom time for the Pacific paradise of Palau. More and more tourists are discovering the small nation, attracted by the reefs and forests, pristine beaches and the promise of a perfect slice of the idyllic life on the island.
A record high of 162,000 tourists visited Palau in 2015 — double the number in 2005. And with tourism contributing more than 85 percent of Palau’s gross domestic product, it was good, very good.
Now, Palau’s beautiful beaches, as soon as lots of travellers are empty. So are the hotels, including mothballed construction projects that started during the boom. Tour agencies have been liquidated, and excursion boats to Palau’s famous Rock Islands aren’t going anywhere.
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Palau, an archipelago consisting of more than 500 islands in the western Pacific Ocean, is on the knees after making a very powerful enemy: China.
Palau is one of the 17 countries still have diplomatic together with Taiwan, provides Palau with more than $13 million per year in funding, and scholarships in education and medicine, according to Reuters.
But Palau’s recognition of Taiwan is not in line with Beijing’s One-China policy, that will keep Taiwan a part of China.
In November, in a move many took as a Beijing press Palau to shift its diplomatic focus away from Taiwan, China declared Palau a illegal destination, and threatened with a Chinese tour groups, with fines of more than $ 60,000 if they took tourists.
That move hit Palau where it hurt.
Before the travel ban, Chinese tourists accounted for about half of all visitors to Palau. They are now gone.
Chinese investors had also left behind the large construction and business projects in Palau during the tourism boom, including a new 99-year lease on approximately 60 projects hotel. They are now in the hold.
Palau Pacific Airways, announced last month after the close of bookings dropped by 50 percent since China’s travel ban on Palau.
“The Chinese government has made Palau a illegal tour destination, possible, and probable, due to the lack of diplomatic status, the company that ran the airline, Sea Passion Group, said.
He also said that the carrier, which flew directly to the mainland of China, had no booking of China in July or August.
The airline told Reuters that the Chinese government was “to make an effort to slow or stop the tourists go to Palau.”
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Others in Palau are under pressure from China.
Jeffrey Barabe, who is the owner of a large hotel in Palau’s most populated island of Koror, told Reuters China was “weaponizing tourism.”
“There is an ongoing discussion about China weaponizing tourism,” he said. “Some believe that the dollar is allowed to flow in and now they are pulling it back to try and get Palau to establish ties diplomatic.”
Palau President Tommy Remengesau said that there was no official word from China, but the superpower intentions “no secret.”
“It is no secret that China likes us, and the diplomatic friends of Taiwan to switch to them,” he told Reuters. “But for Palau, it is not our choice to decide what the One-China-policy”.
Remengesau said while the tourism and investment from China was welcome in Palau, his nation’s ideals were more in line with Taiwan.
Taipei, Taiwan, the capital of China is accused of the use of economic incentives to win over its allies.
This week, El Salvador was announced in the tombs of Taiwan and formally establish diplomatic relations with China, marking a victory for Beijing.
The Dominican Republic and Burkina Faso both dropped ties with Taiwan in May, following the African island nation of Sao Tome and Principe in 2016 and Panama in 2017.
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Together with the Palau ban, Beijing has banned tour groups from going to the Vatican — another small country that recognized Taiwan.
Recently, Beijing has issued requirements on foreign companies that still refer to Taiwan as a separate country, including airlines that mentioned the island separately to the people’s republic of China in the schedules. It made similar demands with regard to Hong Kong and Macau.
Qantas, American Airlines, Delta and United Airlines were among the airlines that said that they update their websites accordingly.
But whether Palau would be back down to the middle of the perceived pressure from China, turned out to the small island was steadfast.
Remengesau said Palau had a plan to recover from the withdrawal of the Chinese visitors with a focus on cashed-up travellers: Palau has already begun rebranding itself as a luxury destination, instead of a vacation spot for the masses, in a “quality over quantity” approach to tourism.
But the country’s former president Johnson Toribiong, who left office in 2013, spoke to the importance of investment in Palau and said the country should not isolate itself.
“I love Taiwan. But even Taiwan wants to be China now. The businessmen, but also China,” Toribiong told Reuters.
“They don’t care about the political consequences. Think about the economy.”
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This article originally appeared in the News.com.au.