High airfares, finance struggles and extreme weather threaten Pacific tourism growth

Nearly half of Pacific tourism operators report increased revenue over the past year, but a new regional survey reveals serious challenges to sustaining that growth.

The Pacific Islands Export Survey 2026 identifies high airfares, difficulties accessing finance and extreme weather as three major pressures facing tourism businesses across the region.

The survey reveals 44 per cent of operators identify limited international air connections and high flight costs as a major challenge, while more than half struggle to obtain finance.

Extreme weather is also taking its toll, with 65 per cent reporting impacts on their businesses over the previous 12 months.

The report draws on responses from 121 tourism business decision-makers across the region and builds on earlier findings from the wider Pacific Islands Export Survey, reported by PMN News in July.

But despite the challenges outlined in the report, PTI Australia Trade Commissioner Tim Martin says the findings reveal opportunities for the sector.

PTI Australia Trade Commissioner Tim Martin. Photo/Supplied.

"The report shows Pacific tourism operators are among the region's most internationally connected exporters.

"They're reaching customers through digital channels and generating revenue from markets that many other sectors are still working to access," says Martin.

Limited international flights and expensive airfares are the most commonly identified barriers, cited by 44 per cent of respondents.

Another 40 per cent identify high operating costs, including labour, transport, insurance and utilities.

Pacific tourism operators are gaining the digital skills and tools needed to reach international visitors, promote their businesses online and tap into new markets through PTI Australia’s Digital Tourism Programme. Photo/PTI Australia

These pressures are particularly significant for smaller tourism businesses, with 69 per cent of those surveyed employing 10 people or fewer.

Australia remains the most widely serviced international market, with 77 per cent of respondents reporting Australian visitors, followed by New Zealand at 58 per cent and the United States at 55 per cent.

Looking ahead, 72 per cent identify Australia as a market they want to target for new business over the next three years.

Martin says limited flight connections and insufficient marketing support continue to constrain the industry's potential.

Half of respondents want assistance marketing their businesses, while 44 per cent want stronger promotion of Pacific destinations.

More than half of surveyed tourism operators report difficulty obtaining finance, 46 per cent say they are unable to borrow, while others cite high interest rates, insufficient security and inflexible banks, limiting their ability to expand or recover from disruptions.

The survey also finds around 40 per cent want better online sales capabilities and access to financial technology, including digital banking and payment systems.

Nearly two-thirds of surveyed Pacific tourism businesses were affected by extreme weather over the past year, with 52 per cent of those impacted reporting operational disruptions, 36 per cent damage and 35 per cent increased costs.

Extreme rainfall and severe storms were the most common problems, while some operators also reported declining visitor numbers and temporary closures.

The findings predate the current 2026–2027 El Niño warnings, which have raised concerns about prolonged drought and water shortages across parts of the Pacific.

The report's release coincides with a new memorandum of understanding between PTI Australia and SPTO that aims aims to strengthen cooperation on tourism development, investment, technology and international market access.

Despite the challenges, 47 per cent of respondents report increased revenue over the previous year.

But confidence about future growth remains more cautious than in other Pacific export industries, with only 53 per cent expecting revenue to increase over the next 12 months and nine per cent anticipating a decline.