Cook Islands tax data show $39m tourism growth to $317m

Cook Islands Government’s latest official “provisional” tax turnover data show tourism activity increased by $39 million (14 per cent) in the 2025 calendar year.

The Ministry of Finance and Economic Management (MFEM) released tax data from the Cook Islands Statistics Office in response to a Cook Islands News story, which reported a $34 million decrease in calculated “economic impact” last year compared to 2024.

The newspaper used data from the International Visitor Survey (IVS) – which asks visitors to recall their spending in the Cook Islands – to calculate the industry’s “economic impact”, as it has done in previous years. Cook Islands News had earlier reported that the tourism industry contributed $541.77 million to the local economy in 2024, citing IVS data from Cook Islands Tourism.

MFEM yesterday clarified that the IVS data is a “market strategy” and “not official economic data”.

The Ministry stated that claims of a “dip” in tourism are incorrect, adding that evidence shows tourism in the Cook Islands is “growing, not contracting”.

The latest official (provisional) tax turnover data show tourism activity increased by $39 million (14 per cent) in calendar year 2025, it said, adding nominal GDP data tells the same story, with tourism expanding 13.3 per cent between financial year 2023/24 and FY2024/25.

Frontline tourism workers in Aitutaki take part in Cook Islands Tourism’s Kia Orana Values short course in 2025, delivered by CITTI, reinforcing cultural identity and hospitality standards across the industry. Photo/Cook Islands Tourism Corporation.

According to tax data from the Cook Islands Statistics Office, the tourism industry’s “declared gross turnover” was $227 million in 2023, $278 million in 2024 and a provisional $317 million in 2025.

“The numbers are straightforward,” said Dean Yarrall, chief economist at the Ministry of Finance and Economic Management.

“Tourism industry turnover is up strongly. That means more economic activity, more income, and more revenue supporting public services.”

According to MFEM, tax turnover data is based on actual transactions recorded for compliance purposes.

Cook Islands Tourism joined leaders from across the region in Vava’u, Tonga, for the Pacific Sustainable Tourism Leadership Summit 2025. Photo/Cook Islands Tourism Corporation.

“They are the most reliable measure of the sector’s economic contribution and the most appropriate basis to assess tourism’s impact on the economy and revenue.”

The recent newspaper reporting relied on combining arrivals data with “survey-based estimates of visitor spending” from the International Visitor Survey.

MFEM said the IVS data serves a different purpose – understanding visitor behaviour and helping target high-value markets, adding it is not designed to measure aggregate economic performance.

“The IVS is a valuable tool for market strategy,” said Ioana Turia of the Economic Planning Division. “But when assessing if tourism is growing or shrinking, recorded tax turnover and official GDP data provide the definitive picture.”

According to MFEM, the primary purpose of the IVS is to provide customer insights, not to measure aggregate spending to inform tax revenue collection.

“Its strength lies in understanding visitor segments, identifying high-value markets and informing marketing and product strategy. This helps enable Cook Islands Tourism Corporation to continue to drive value from every customer by a data-driven strategy,” the Ministry said.

“To gain these insights the starting point for the IVS is the right one: talking to customers. But this limits assessment of spending compared with tax data since the survey is based on what visitors recall, not what they actually spend.”

MFEM also stated that flaws in the IVS methodology have already been identified. The Ministry and the Cook Islands Tourism Corporation are aware of these issues and are working in alignment with the Pacific Tourism Organisation (SPTO) to address them.

Visitors from the cruise ship Norwegian Sun brought a surge of activity to Rarotonga, highlighting the vital role cruise tourism plays in supporting local businesses, markets and tour operators across the island. Photo/Melina Etches/Cook Islands News

“Usefully, the IVS expanded its sample size. But maintaining comparability across methodology changes – including sample size – is challenging.”

Key issues include:

• Region-wide assumptions on how prepaid expenditures flow enter the local economy may not be appropriate for local markets.

• Nor do these assumptions reflect changing technology (online travel booking platforms).

“Ultimately, we need to be informed by data but move on from methodological details. Government will continue to focus on strategy that grows tourism sustainably, and the return and value the sector can bring to the Cook Islands,” MFEM said.

“MFEM and the Cook Islands Tourism Corporation are aligned and continue to work together to strengthen data quality to inform strategy that lifts sustainability and the return from the sector long-term.”

This story was originally published by the Cook Islands News.