8/3/2019 SecD Grp I Guam Case Study

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GUAM Case Study:

Introduction:

Guam is a small island located in the Philippine Sea, it’s an unincorporated territory of US.

Throughout history, Guam has been influenced by Portuguese, Spanish, American and Japaneseculture. It’s been primarily home to the ancient Chamorro, who are the ancient inhabitants of the

island. Guam enjoys a rich Chamorro cultural heritage even though it is not unique to the island. The

population of Guam is ethnically diverse with 175000 inhabitants. The Chamorro descendants make

up one third of this population. Guam by size is not very big but is a strategically located permanent

military base for the United States. Guam is primarily a tourist destination blessed with beautiful

scenery, exotic beaches and is the most preferred diving destination in Micronesia, which makes it

the most ideal location for family holidays.

Key issues faced by Guam and GVB:

1.  GVB for its functioning is dependent on the budget allocated by the govt. The existing

budget is not enough to promote the “Destination Guam” project. The main issue faced with

regards to the budget is that GVB does not receive the allocated money on time and neither

is the whole amount sanctioned.

2.  Tourism industry in Guam contributes to 60% of the total revenue. As Guam is constraint by

size there has been a maximum utilization of resources and this had led to stagnation of 

tourist inflow.

3.  The quality of service available in the hospitality industry is extremely poor. It is not

sophisticated and does not give the customer an added value for the money paid.

4.  Guam tourism market has not projected itself as a place where there are big avenues forthe upper class of people. This has resulted in it becoming a low budget tourist spot.

5.  Travel to Guam today comes with a lot of hitches, like interrupted airplane and shipping

services. Internal transport in Guam isn’t much better either with only two bus operators for

an entire country. The logistics and distribution channel for necessary commodities in Guam

is not structured that intern results in the price rise of the essential commodities.

6.  The East Asian countries of Japan, Korea and China have been completely exploited for the

past 4 decades with regards to tourism. New market penetration into other nearby countries

is essential for the tourism industry and the GVB to survive.

7.  From an economic standpoint, the major investment capital inflow has been from Japan and

US. Guam needs to liberalize its market to bring in foreign investment from other potential

investors.

This brings us to an understanding that Guam has reached a standstill situation which requires an

dynamic and fresh perspective to push the tourism industry and the country in path of progress and

prosperity.