KOROR, Palau — By next year, the landscape of Palau’s hotel industry would have widened significantly with four companies building hotels of global repute, investing hundreds of millions of dollars in construction, and bringing future jobs to Palau.
These new hotels push Palau several steps closer to realizing the goal of welcoming high-end visitors. This market is preferred, particularly for Palau. The island nation has endeavored to protect its environment and tourism against mass market tourists.
The Hotel Indigo Palau, now under construction, is expected to be completed by next summer. Photo courtesy of the Foreign Investment Board
According to data from Palau’s Foreign Investment Board requested by the Journal, IHC Hotel Ltd., which does business as the Hotel Indigo Palau, is investing more than $100 million in the construction of a 187-room hotel. Construction has already started and is expected to be completed by May 2025.
The Wanjin Palau Development Co., which does business as the Marriott Hotel, is expected to start construction this summer on a 120-room and 20-bungalow hotel. The company is investing about $30 million in the six-story building.
Palau Majesty Development, which does business as the Sheraton, just had its licensed approved by Palau’s Foreign Investment Board. The company’s approximately $200 million investment on its 154-room hotel is expected to start this summer.
The Leisure Development Koror Inc., which does business as the Four Seasons, has been stalled by a property dispute but according to government officials, that is nearing a resolution as of the time of this writing.
The company’s famous liveaboard, the 128-foot Four Seasons Explorer, opened last year in Palau and has been consistently booked. It’s been called a luxury floating resort as it boasts three decks, 10 staterooms plus an explorer suite, restaurant, two bars, lounge, library, PADI 5-Star Dive Centre, and a spa corner. A night’s stay includes all meals with a rate starting around $3,200. The liveaboard also offers private charter options for up to about two dozen guests.
Tmetuchl“Occupancy has been really good and at times fully booked since they opened in December,” said Minister Ngiraibelas Tmetuchl of the Ministry of Human Resources, Culture, Tourism and Development.
Tmetuchl said these and other hotels that have either been built or are also in the works are important to Palau.
“First we need branded hotels that will help the marketing of our product during this recovery phase,” he said referring to the pause in the tourism industry caused by the COVID-19 pandemic. “We’re trying to develop a larger freely independent travelers market … so there’s more people who can spread out the wealth as opposed to packaged tours.
“And the most important thing is human resources, so our work now is to work with developments, working with PCC and Division of Employment Services to fill those jobs and to entice Palauans living abroad to come back and take up those jobs as well. This strengthens our private sector economy, and helps entice Palauans living abroad, particularly those in Guam, Saipan, Hawaii and mainland U.S. to return.”
Tmetuchl’s ministry is one of the ministries that has been working closely with the Four Seasons on various aspects of partnership, to include promoting Palau as a premier destination. “We thank them for having paid all the advertising around the world that’s helped put Palau on the map.”
ScottSam Scott, founder of Sam’s Tours and vice president of the Palau Chamber of Commerce; told the Journal the new hotels and increased exposure are exciting.
“Investments are good for the economy. No question about it,” he said. Scott has previously commented on the need for high-end tourists.
Palau’s tourism industry had slowly built in throughout the 1990s and into the 2000s.
Around 2010, as numbers started increasing, Palau began to consider sustainable tourism policies to try to ensure a balance between tourism dollars and protecting the environment — the attraction that brought tourists in the first place, according to Journal files.
From a business perspective, Scott had always focused on giving his guests the experience he had when he first enjoyed Palau’s ocean and saw the vast and colorful marine life. By 2015, there were 91,174 tourists from China alone — that’s more than the total number of tourists Palau used to attract in 2008 through 2010, according to Journal files. Chinese tourists made up almost half of the total 168,770 visitors in 2015.
“There were just so many tourists,” Scott told the Journal previously. “We would go to jellyfish lake and having 450 people there … it took away from the pristine experience.” The COVID-19 pandemic forced a pause to the tourism industry but that pause was needed to reset the industry. Scott pointed to Palau’s current tourism numbers and the slowly increasing number of flights that will hopefully help fill current and new hotels with high-end tourists that, like those of the 1990s, have more time and more disposable income.
“The numbers are improving again,” he said.
This artist's rendition shows the Sheraton hotel as it is planned to be built in Palau. Courtesy photo The Palau Visitors Authority reported a continued increase in tourism numbers. In February there were 5,753 visitors, almost double the 2,415 visitors from February 2023. PVA officials also noted that the first two months of 2024 exceeded the 2023 average, “pointing towards a hopeful projection for tourism growth this year, especially amid the post-COVID era.”
It’s not just the number of tourists that are growing, but the amount of time spent in Palau is also increasing. According to PVA data, the length of stay for tourists is longer now at about 7.7 nights compared to 2015’s 4.6 nights.
PVA officials — pointing out the importance of direct flight connections to support tourism in Palau — is “vigorously promoting Palau as a premier tourist destination” in hopes of “attracting a diverse range of tourists and elevating Palau's prominence on the global tourism landscape.”
Scott said the new hotels create job opportunities for Palauans. But more needs to be done to grow the local pool of skilled, trained and certificated workers to address the growing need, he said.
“Even we have a challenge finding Palauan guides and boat drivers. It puts a bit of a constraint on our operations and does limit, I think, the growth of our visitor industry,” he said.
MeriangFermin Meriang, chairman of the FIB, said that policy requires companies to hire 20% locals. It’s one of the boons to the economy that comes with such investments, he said.
Palau has a population of roughly 18,000. About 5,000 of those are foreigners who work for local businesses, the government or are business partners with Palauans. Like Guam, the island nation has faced a brain drain as young Palauans are drawn to higher-paying jobs and broader spectrum of opportunities in the U.S. as well as in Asia and Australia. To that end, the Ministry of Education has been working with local and international partners to expand learning opportunities for young Palauans, to prepare students for work in popular industries, to include the local marine industry as well as tourism.
The Four Seasons has been working with the government to train Palauans interested in the hotel industry. Upon opening in Palau last year, the liveaboard highlighted three young Palauans who participated in the Four Seasons Maldives Hospitality Apprenticeship. They graduated from the multi-faceted, year-long program in June 2023, and began careers with the Four Seasons Explorer: Dilreng Dee-light Patrick and Kaali Mae as guest services agents, and Joyce L. Kyota as a commis chef.
The apprenticeship program has continued with a SCUBA certification course that will take interested high school juniors and seniors from basic certification through to masters, which will allow them to guide tours.
“They have sent eight students so far to their training center in the Maldives. They’re helping us with human resources capacity, training and other support,” Tmetuchl said. mbj
