Aerial shot of Suva City [File Photo]

The ANZ Research team in its latest Pacific Insight states that Fiji’s service exports rose past the pre-pandemic level last year.

International Economist Kishti Sen says after rising by 400.5% year on year in 2022, service exports rose a further 55 percent in 2023 to $4,577m to be 31.5 percent higher than the previous record of $3,482m achieved in 2019.

Sen says the strength was driven by transport exports which benefitted from an explosion in passengers in transit.

International Economist Kishti Sen

He adds record visitor arrivals and higher visitor yields saw travel services rebound strongly and deliver a windfall for service exports and the highest ever services trade surplus of $2,490m in 2023.

Sen says they think inbound demand will plateau from here as Fiji faces increased competition and, more importantly, capacity constraints.

He states that yields are likely to dip too due to travellers’ usage of savings buffers built during the pandemic, more affluent travellers returning to their favoured holiday destinations, and discounting.

Sen highlights the peak in visitor arrivals and lower yields will likely see travel and transport service exports track sideways from here.

Nonetheless, he says this is a good outcome considering service exports are nearly 32 percent higher than the pre-pandemic levels in nominal (current) prices.

Sen adds increased competition with international carriers offering more competitive direct flight prices probably limits the upside to passengers in transit going forward.

He stresses Fiji will do well to maintain the numbers from 2023 when the number of transit passengers lifted by 128.8 percent year on year to 260,962.