Arni Weisman
Every few years, a destination breaks away from the pack and moves from relative obscurity to prominent status on the tourist map in a short period of time, with all the pros and cons that come with it. Think Vietnam. Think Maldives. Think Turks and Caicos.
Are you thinking of Palau?
Not yet, of course, but that could change in less than a decade. Today, no global hospitality brand operates in the 21,000-person western Micronesian nation. But this year, a 200-room Indigo resort will open, and two years later, a Four Seasons will welcome visitors to a private island a short transfer from the international airport. (Four Seasons began operating a luxury yacht with 10 cabins and one suite in Palau waters last September.)
When I was in the country earlier this week, I met with the country’s president, Surangel Whipps Jr., to discuss tourism development. Sitting in the boardroom of the Palau International Coral Reef Center in Koror, Whipps made clear the tensions inherent in trying to balance economic development and conservation in an emerging tourism destination.
In Palau, where he is an independent, he is seen as the more business-friendly of the two candidates in the upcoming presidential election, but elsewhere he may be seen as an environmentalist who supports policies that slow development.
Palau has the healthiest coral reefs I’ve seen in years. Incredibly colorful coral, abundant marine life, and unique golden stingless jellyfish in the island lakes. It was the first country to require visitors to sign a pledge to protect its natural resources, which is stamped in their passports.
Throughout the conversation, Whipps alternated between sympathy for commercial interests (his family owns retail and service companies across multiple verticals) and sympathy for the conservation of natural resources. He spoke of finding a balance between conservation and production.
Palau President Surangel Whipps, Jr. Photo courtesy of Arnie Weissmann
He noted that if the country's airport runways are strengthened, Boeing 787-8s could land there, opening up the possibility for Qatar Airways to connect Palau to the world through its Doha hub. “Emirates' service has been a game changer for the Maldives,” he said.
But when asked which country would best serve as a cautionary tale about how not to develop tourism, he said: “Maldives.”
If the Maldives were a warning to him, Bhutan serves as a model for low-density, high-end tourism focused on economy and sustainability. At several points, Whipps spoke about the importance of attracting the “right” hotel brands and the “right” airlines. When he mentioned Marriott, he talked about the Ritz-Carlton and “JW” Qatar because they have enough business and first-class rooms.
When I asked him what his visitor target was, he said, “I don’t think there is a ‘right’ number. It’s about managing the number.” Last year, there were just 23,000 visitors, but he said, “The airport is designed to handle 250,000 arrivals. We need the right number of tourists who are environmentally conscious. We need a certain number of tourists to sustain the economy, but we also want to preserve the experience.”
As we talked, his word cloud was filled with “balance.” “We value tourists. They’re important to our economy. But we don’t want to destroy what people come here to see,” he said. “There’s pressure. People say we need to lower (the barriers to development). And we say we want to preserve Palau’s identity.”
While warmer ocean waters due to climate change have already bleached and killed many coral reefs around the world (the Maldives have been particularly hard hit), Palau’s reefs are not expected to decline until the 2030s, or perhaps even the 2040s. That’s a scary prospect, but a relatively long lifeline for a tropical country.
Palau also offers cultural attractions and important World War II battle sites, but most visitors come here to dive or snorkel. What is Palau’s Plan B when the coral starts dying?
He gestured around the room. “That's why this center exists. There's a lot of research going on. Universities from all over the world, from England and Scotland, from Stanford and Duke, come here. They study the impact, and we get useful information.”
This is part of the reason why Four Seasons didn’t open until its 10th anniversary. The discovery that the coral on the island was particularly resilient to stresses that threatened other species slowed development, and as a result, the approach to development was slower and more cautious.
Whips praised the patience and understanding of Four Seasons investors. “We have these requirements,” he said. “And I think they are helpful to investors. It’s not all about regulation and blocking everything. That’s the challenge you have to figure out: what’s the best mix, what’s going to contribute to our economy without harming our fragile environment. The end goal is that we want visitors to experience paradise. And when you invest with us, we want the product to be here and stay.”
