Case Studies

The Pacific Private Sector Development Initiative (PSDI) worked with the Ministry of Human Resources, Culture, Tourism and Development (MHRCTD); Bureau of Tourism; and Palau Visitors Authority to develop a new sustainable tourism strategy to guide Palau’s tourism development during 2025–2028.

Tourism was a major contributor to Palau’s economy, accounting for more than 30% of gross national product before the coronavirus disease (COVID-19) pandemic brought international travel to a halt. Since then, the sector has been struggling to recover to pre-pandemic levels and by 2022, the previous tourism strategy had expired, leaving Palau without a clear plan to guide recovery. In response, the MHRCTD requested PSDI assistance to develop a new sustainable tourism strategy to replace the outdated Palau Responsible Tourism Policy Framework, 2017–2021.

PSDI supported the development of the new strategy throughout 2024 and 2025. This included supporting the ministry to undertake extensive consultation and collaboration with state and national governments, nongovernment organizations, the private sector, and communities to ensure a shared vision for the tourism sector. PSDI finalized drafting and design in 2025, resulting in the publication of the Palau Sustainable Tourism Strategy, 2025–2028 on 26 June 2025.

Throughout the process, PSDI worked closely with MHRCTD staff, taking an approach that strengthened local skills and knowledge and resulted in a self-determined strategy with strong local ownership.

Writing in the strategy’s foreword, Surangel S. Whipps, Jr., President of the Republic of Palau, stated that the “strategy is the result of deep collaboration—with national and state governments, [nongovernment organizations], the private sector, and communities. It reflects a shared vision: to build a tourism industry that fosters pride among our people, earns respect from our visitors, and inspires our neighbors to do the same.”

Palau’s new strategy establishes a national direction for building a tourism sector that protects Palau’s unique environment, strengthens communities, and delivers long-term economic value. To achieve this, the strategy adopts a destination management partnership model, recognizing that sustainable tourism requires collaboration between government, the private sector, communities, and visitors. It is underpinned by six goals based on the values and intentions expressed by tourism stakeholders: (i) attract visitors at a sustainable pace; (ii) grow the high-spend, low-impact traveler segment; (iii) increase tourism’s economic contribution; (iv) grow Palauan-owned tourism businesses; (v) increase Palauan employment in tourism; and (vi) grow community support for tourism.

Summary of the Palau Sustainable Tourism Strategy 2025-2028.

The strategy provides a set of 10 clear priorities for the first year of the strategy’s implementation. These include establishing a cross-agency, public-private-community representative task force to implement and monitor the strategy, developing a system for storing destination management data, identifying tourism skills gaps and workforce needs, and designing a minimum standards program for tourism operators.

The strategy also includes measures to help micro, small, and medium-sized enterprises access the tools and financing needed to launch and grow sustainable and resilient tourism businesses.

“PSDI’s involvement significantly elevated the quality and scope of the strategy. Their team brought in expertise that helped us sharpen our focus on destination management, regulatory reform, and financing mechanisms … Having PSDI at the table ensured we didn’t just write another plan—we created a roadmap that’s both aspirational and actionable,” said Elangel Yanni Mesubed, director, Bureau of Tourism.