Pacific islands’ tourism industry is embracing smart investment tools to buffer climate and disaster shocks.

At the recent 3rd Pacific Sustainable Tourism Leadership Summit in Vavaʻu, Tonga, the Pacific Catastrophe Risk Insurance Company (PCRIC) spotlighted the critical role of financial protection mechanisms in safeguarding the region’s tourism sector.

According to PCRIC, access to “immediate cash injections following disasters” is a key component of smart investment practices.

PCRIC emphasised that integrating disaster-risk financing tools, such as parametric insurance, into a diversified portfolio not only dampens market volatility but also supports the broader goal of sustainable tourism financing.

The Summit, organised by the Pacific Tourism Organisation (SPTO), brought together industry stakeholders, policymakers and development partners under the theme ‘Midway to 2030: Realigning, Reaffirming and Recommitting’.

Parametric insurance, where pay-outs are triggered by predefined event metrics rather than assessed losses, was highlighted by PCRIC as a useful mechanism for pooling industry disaster risks and enabling rapid recovery.

With the Pacific tourism sector vulnerable to tropical cyclones, earthquakes and other hazards, the message at the Summit was clear: financial resilience must sit at the heart of destination-management strategies if the region is to meet its 2030 sustainable-tourism goals.