Koror
Koror positions Palau for premium eco-tourism: the Palau Pledge and marine sanctuaries attract visitors willing to pay for pristine environments in a UNESCO-listed lagoon.
Koror demonstrates how a small island nation can position itself for premium eco-tourism. This commercial capital of Palau, distinct from the governmental capital in Ngerulmud, hosts the majority of the nation's approximately 18,000 residents and virtually all tourist facilities. The famous Rock Islands Southern Lagoon, a UNESCO World Heritage site, attracts visitors seeking pristine marine environments.
Palau pioneered conservation pricing through the Palau Pledge, requiring visitors to sign a passport stamp commitment to environmental responsibility. The nation has created extensive marine protected areas, including a complete shark sanctuary. Tourism revenue funds government operations, with visitor fees directly supporting conservation.
The Compact of Free Association with the United States provides budget support and defense guarantees, though Palau has sought to diversify partnerships including engagement with Taiwan while resisting Chinese pressure. Koror's challenge is managing tourism carrying capacity while extracting sufficient revenue from visitors to fund both government operations and the conservation measures that attract tourists in the first place.