Tourism projects well on track

The tourism industry is optimistic about increasing room inventories, with over $1.3 billion invested in this sector alone.

Tourism Minister Viliame Gavoka says investments are taking shape, which aim to bring over 4,000 rooms, including additional rooms at Crowne Plaza, Hilton Garden Inn, Suva, Wananavu Beach Resort, and Rakiraki.

He adds that they need to ensure these projects are up and running to meet demand before tourists change their minds and travel to other destinations if they are not satisfied with the accommodations.

“Our projections are that we need about 4000 to 5000 rooms to meet the air capacity that is now available in Fiji. It’s a good problem to have. A lot of people want to come to Fiji, and you’re having problems trying to find rooms for them. But we have to act quickly because people will say, Well, I can’t go to Fiji; I’ll go somewhere else. We don’t want that to happen.”

Gavoka emphasizes the benefits of new investments, which aim to address the current shortage of rooms in the country.

Credit: FBC News

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Economy continues to perform well, headline inflation at 4% in Oct – RBF

World oil and food prices drop.

Despite the slowdown in the global economy, the Reserve Bank of Fiji states that the Fijian economy continues to perform well and is projected to grow by 8.2 percent this year, following a robust 20 percent expansion in 2022 thereby restoring the Gross Domestic Product to pre-pandemic levels.

And the good news is that crude oil prices fell to US$87.41 per barrel as OPEC3 and the United States ramped up production, while world food prices index (FAO) declined by 10.9 percent, led by the fall in prices for cereal and rice, which more-than-offset the increase in dairy prices.

Headline inflation stood at 4 percent in October as higher prices were noted across most categories, with food and non-alcoholic beverages, transport, and restaurants and hotels being the major drivers.

The RBF says the impressive growth in the economy is reflective of the strong recovery in the tourism industry as visitor arrivals cumulative to October totaled 772,172 visitors, 55.3 percent and 2.7 percent higher than the corresponding period in 2022 and 2019, respectively.

With the growing tourist demand, the hotels average daily room rate has also picked up significantly and exceeded pre-pandemic levels, leading to higher revenue earned from rooms sold.

Weak performances were noted in the primary and natural resource sector due to industry-specific issues. Cane yield was down by 8.1 percent and sugar production (down by 13.6 percent) recorded annual contractions as at 30th October underpinned by cane supply disruptions and operational issues.

The RBF says consumption activity has been strong supported by the positive flow-on effects from increased tourism activity, rising incomes as reflected by the rise in Pay As You Earn tax collections by 20.1 percent and higher remittance inflows (21.8 percent) cumulative to October.

Partial indicators for consumption such as net VAT collections (27.6 percent) and new lending for consumption purposes (11.2 percent) recorded annual increases up to October.

Credit : Fiji Village

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Demand for labour continues to rise in Fiji – RBF

Foreign reserves stand at $3.4 billion

The demand for labour continues to rise, reflective of the rebounding economic activity coupled with higher labour emigration according to the Reserve Bank of Fiji.

The Reserve Bank of Fiji says the loss of skilled labour due to high emigration, capacity constraints in the tourism industry, high cost of doing business and persistent threat from natural disasters and climate change pose challenges that can disrupt growth projections.

The RBF says the number of job vacancies increased by 32.3 percent in the year to September led by higher recruitment intentions in tourism related sectors.

Similarly, the number of formal employment and wages paid also increased annually up to August.

Meanwhile, partial indicators for investment activity have shown gradual signs of recovery.

Commercial banks’ new lending for investment purposes rose by 33.7 percent annually cumulative to October driven by higher lending to the real estate, building and construction and to households for home investments.

Likewise, the value of work put-in-place (16.3 percent) picked up in the first-half of this year compared to the same period last year.

In contrast, leading indicators for construction activity such as the number of building permits issued dropped by 12.4 percent cumulative to the second-quarter and cement sales dropped by 2.6 percent cumulative to September.

Liquidity in the banking system is adequate at around $2.2 billion, keeping interest rates at historical lows.

Fiji’s merchandise trade deficit widened by 5 percent to around $3.3 billion cumulative to September as growth in imports continued to outweigh the expansion in exports.

Imports (excluding aircraft) grew by 5.2 percent to approximately $5 billion underpinned by an increase in machinery and transport and miscellaneous manufactured goods imports while the improvements in exports (grew by 5.6 percent to $1.7 billion) stems from higher re-exports of mineral fuels and lubricant commodities.

Foreign reserves remain at adequate levels and are currently around $3.4 billion, sufficient to cover 5.7 months of retained imports of goods and services.

Credit : Fiji Village

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Publicly-listed Kinetic Growth Fund (KGF) has acquired three prime real estate assets in the Suva central business district valued at $13.3million.

The property portfolio was acquired from Kelton Investments Pte Ltd in exchange for a mmix of cash and equity.

The properties to be acquired are:

• Naibati House – three-storey building; and three tenants
• Korobasaqa House – three-storey building with basement; leased to Ministry of Finance
• Gunu House – three-storey office building; leased to Ministry of Finance

A market announcement on the South Pacific Stock Exchange stated the properties will transfer as going concerns, with property management to remain substantively the same.

Under the terms of the transaction, payment by KGF will involve:

• $4.4million in cash to Kelton or its nominees
• The issue of 7,289,286 KGF shares to six parties who are shareholders of Kelton. Each of the parties is an independent investor and shares will be issued in six parcels ranging from 699,766 to 3,333.000 shares (equivalent to 6.3 per cent to 29.9 per cent of total issued capital post-transaction).
• The Sale and Purchase Agreement for the transaction has now been executed by the relevant parties and anticipated to close within 90 days.

The company stated the cash portion of the transaction was being financed through bank debt.

“The financing is through a mortgage on the three properties with a conservative loan-to-value ratio. Negotiations with financiers are at an advanced stage and it is anticipated that this will be completed in a matter of days,” KGF chairperson Erik Larson said.

“The high-quality property portfolio will be cash flow positive, and we expect that KGF will move immediately to profitability.

“The deal is strongly value accretive and by our calculations, has the potential to increase KGF’s net asset value per share by around 15 per cent.

“Having this property portfolio provides a strong platform for future growth for KGF. We are particularly excited to be able to partner with Kelton, an established and successful business in Fiji

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Fiji Airports to explore real estate for sustainable revenue

The Fiji Airports has decided to diversify its revenue sources and have real estate as an alternate revenue stream.

This has been highlighted by Prime Minister and Minister for Public Enterprises Sitiveni Rabuka while contributing to the debate on the “Review Report of the Fiji Airports Annual Report 2020.”

Rabuka says this move is to mitigate future revenue disruptions in the aviation industry.

He adds that Fiji Airports will conduct a development plan assessment for potential land development opportunities associated with FA’s land in Namaka.

“The proposed development plan is expected to span over the next 25 years. FA will engage consultants to assist in developing a master plan for land development and progressing the plan.”

Rabuka says in recent years, Fiji Airports has been internally financing its capital works, including outer island maintenance.

He adds that in terms of major capital projects, FA has secured a $40 million loan with ANZ and the Australian Infrastructure Financing Facility for the Pacific (AIFFP).

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Credit : FBC NEWS

RBF revises Fiji’s GDP forecast

The Fijian economy is projected to expand by 8.2 percent, an upgrade from the eight percent growth expected earlier.

Reserve Bank of Fiji Governor, Ariff Ali says the upward revision reflects the exceptional recovery in the tourism industry as up to October this year, 772,172 tourists graced our shores, around three percent higher than the same period in 2019.

By the end of the year, visitor arrivals are expected to be four percent higher than 2019 and reach a new record of 930,165 visitors.

Ali says the post-pandemic economic recovery in Fiji is now complete as the economy has returned to the 2019 level of GDP.

He says the spillover of higher tourist arrivals increased consumption spending and boosted aggregate demand.

Investment spending has also been rising, although at a relatively gradual pace. In contrast, the natural resource sectors continue to show dismal performance and have been a drag on growth.

Sugar, mineral water, gold and the forestry sector outputs noted annual contractions so far into the year due to industry-specific supply side issues.

Over the medium term, Ali says the economic growth is expected to return to trend.

According to Ali the current capacity constraints in the tourism industry is expected to keep annual visitor arrivals growth at around three percent, slightly lower than the trend before the pandemic.

However, Ali says investment spending is expected to fast-track from next year due to more clarity on taxes and incentives, pent-up demand from the pandemic and continuous improvements in the local business environment.

As a result, the economy is projected to grow by 3.4 percent in 2024 and a further three percent in 2025-26.

Ali says the services and industrial sectors are expected to be the leading drivers of growth while the primary sectors is expected to remain broadly flat.

The next review of the GDP forecasts will be before the 2024-25 National Budget.

Credit : FBC NEWS

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Tourism did hard yards for Fiji’s economy – Economist

Ropate Draugunu, left, and Josiveta Lomaiviti welcomes tourists during their arrival at the Jacks of Fiji outlet in Suva on Tuesday, Sep 26, 2023. Picture: JONACANI LALAKOBAU

Tourism has done the hard yards for Fiji’s economy and will no longer be driving Fiji’s economic growth next year.

And there is an urgent need for the Government to start focusing on ramping up other sectors that can drive the economy as tourism slows, said ANZ Bank’s International Economist – Pacific Dr Kishti Sen.

“Tourism won’t be there to drive the economy next year or the year after. It’s done all the hard work,” Dr Sen said in a media conference yesterday on ANZ’s economic outlook for Fiji.

“Now comes the hard bit in terms of how do we find other drivers of economic growth. Can other industries step up and drive Fiji’s economic growth? Or do we need to develop new industries and until these new industries mature, they can’t add to GDP. So we enter into a soft period from next year onwards.”

Dr Sen said at tourism was already booked to full capacity now and into next year and any potential for more growth now was constrained by the lack of rooms to accommodate demand.

“Fiji could reach one million visitors next year, a little bit more even but that’s about it for now. The next big upturn that tourism will provide for the economy will come when we add more stock, more capacity,” Dr Sen said.

He said while Fiji was short by 5000 hotel rooms and that tourism had an investment pipeline of 4500 rooms, these projects may take another three to four years to materialise.

Until then, tourism has now peaked and will not be able to drive any more growth.

“So yes, we’re doing better than 2019 now, so where we go from here is pretty much like pre-pandemic. Two to three per cent GDP growth for the next 2-3 years,” Dr Sen said.

Chief executive officer of ANZ Fiji Rabih Yazbek said this was not enough.

“Fiji is a developing economy. It can’t rely on two to three per cent GDP growth every year. It needs to be growing five to six per cent and unless something changes, we’re just not going to get there,” Mr Yazbek said.

The economists are proposing medicinal cannabis and the export of education as potential new industries for the government to start building on now.

Credit: The Fiji Times

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Shop N Save invests $55 million in the construction of a 6-storey mall in Nausori

About 300 people expected to be employed in multi-million dollar project in Nausori

Around 300 people are expected to be employed around the Tailevu, Nausori, Naitasiri and Rewa area after Shop N Save Supermarket confirmed that they will be investing $55 million in the construction of a 6-storey Ratsun City Nausori Complex at the old Nausori Market site.

Shop N Save Supermarket Executive Director Nisheel Deo Kisun says the shop complex will consist of a supermarket, bakery shop, restaurants, a food court, retail shops and office space.

He says it will also consist of a 55-room Ratsun Apartment Hotel complemented by a conference room.

Kisun says they are grateful to be part of the development of Nausori Town.

He adds the project is expected to start in the first half of next year.

While officiating at the Public Private Partnership to develop the Old Nausori Market, Minister for Local Government Maciu Nalumisa urged the Town Council, stakeholders and investors to come up with initiatives that will benefit the ratepayers and residents of Nausori.

He says such projects as this will improve the lives of the community and the economy as a whole.

Credit: Fijivillage

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Sofitel Resort invests $200m for new extension

The exciting project is a testament to the upward trajectory of Fiji’s tourism industry. There is a serious shortage of rooms and other nee hotels will be needed.

A $200m investment will see Sofitel Resort and Spa open its new extension Vatu Talei soon.

Speaking at the unveiling, Prime Minister, Sitiveni Rabuka expressed his admiration for the project’s pioneers and extolled their courage, wisdom, and foresight.

Rabuka emphasizes the significance of private sector collaboration and investment in shaping the nation’s future.

The Prime Minister says the resort is set to become a jewel in Fiji’s tourism crown, drawing visitors from around the world with its lush landscapes, pristine beaches, and warm hospitality.

“And now yet another one that offers travellers to be more than 300 rooms, high quality rooms, luxury rooms for high-end tourists who are going to be coming here, carried of course by Fiji Airways in their brand new aircraft, we welcomed one on Tuesday and another one coming.”

Rabuka also notes that the Fijian government has embarked on a journey of partnership with the private sector and investors to stimulate economic growth and development in the region.

This initiative, he stresses is a testament to Fiji’s commitment to harnessing its full potential as a tourist destination and fostering sustainable economic progress.

In an additional exciting announcement, Rabuka says that Fiji is eagerly anticipating the arrival of one million tourists later this year, further underlining the nation’s growing appeal as a global tourism hotspot.

The new Vatu Talei resort is expected to play a pivotal role in accommodating and enchanting these visitors with its luxurious offerings and immersive cultural experiences.

Credit: Fbc News

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Bred Bank’s loan portfolio reaches a billion-dollar

Bred Bank has reached a milestone with its loan portfolio for the Fiji market, which stood at a billion dollars last year.

Chief Executive Thierry Charras-Gillot made this revelation at the launch of the TOPEX conference last week.

Charras-Gillot says they have continued to see significant growth in their portfolio since establishing themselves in Fiji in 2012.

“Yes, our loan portfolio is still growing; we reached more than $1 billion last year, and it is still growing by 30% this year. So yes, the Fijian market is very good.”

Charras-Gillot says their loan portfolio is expected to grow more favorably this year.

Gillot also admits that Fiji’s banking sector is very competitive.

Meanwhile, Bred Bank is the Platinum Sponsor for this year’s TOPEX conference, which will take place in late November this year.

Bred Bank is also set to open new branches in the North soon.

Credit: Fbc News

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