Figures released in New Caledonia show that tourism arrivals in the first four months of this year dropped to a level last seen in 1996.
Noumea's daily newspaper says compared to last year French tourist numbers were down by 38 percent and visitor arrivals from Japan had declined by 15 percent.
The drop has been blamed in part on the slide in the value of the euro and the effects of the economic crisis in Japan.
Despite substantial promotion, there are fears that the annual arrival figure may be about 90,000 after dropping just under the 100,000 mark last year.
The paper says the sector's decline has prompted hotels not to fill job vacancies any more.
It also quotes an economist as saying there will be no change with a low-cost carrier serving the territory, if prices on arrival are very high.