August 2012 saw the reopening of the controversial Australian-funded asylum seeker and refugee detention centres on Nauru, which had been closed in 2007-2008. As a result of the reopening, international arrivals in Nauru saw significant growth in 2012-2013 and whilst the majority of these were business travellers, positive flow-on effects occurred, especially in regards to travel accommodation and transportation.
The intense phosphate mining of the small island of Nauru over many years has significant negative impacts on the country’s current travel and tourism industry. A substantial proportion of the small island’s land was significantly damaged due to the mining and has struggled to recover. Fauna is sparse on the island, many indigenous birds have disappeared or become endangered, there are no native land mammals and there are only approximately 60 recorded vascular plant species native to the island, none of which is endemic. All of this has strong negative impacts on attracting tourists to the once naturally beautiful Pacific Island nation.
The nearly depleted phosphate reserves now produce little income for the undeveloped nation, which now largely relies on foreign aid for survival. As a result of the poor economic situation, travel and tourism strongly suffers. The government simply has very limited funding to invest in developing and implementing a sound strategic tourism strategy, in promoting travel and tourism to key foreign markets or in developing travel and tourism infrastructure such as port terminals, banks, hospitals, activities, hotels, travel agencies or internet cafés.
As Nauruan travel and tourism remained significantly underdeveloped in 2013, the competitive environment remained low across all areas including transportation, travel accommodation and travel retail. However, if inbound arrivals increase as forecast, opportunities will present themselves in all areas for new players to enter the market to cater to increased demand.
The current Australian government is in favour of the detention centres and is expected to expand such operations in Nauru. However, if the opposing political party takes power during the forecast period, a complete stop of the detention centre operations could occur. As Nauruan travel and tourism is largely dependent on the detention centres, its future performance will be largely determined by decisions made in Australia.
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