New legislation aimed at turning Palau into a luxury destination is to be put before the new congress which came into power on Friday.
The proposed law will restrict future investment to five-star hotel chains.
The legislation is part of the president Tommy Remengesau's vision to reduce tourist numbers and increase tourist spending.
It comes after a huge influx of tourists in 2015 and 2016, thanks mostly to an increase in package tours from mainland China.
That growth however has come at a cost, with the overcrowding having some negative environmental and social impacts.
President Remengesau told Koroi Hawkins focusing on high end tourism is also aimed at limiting that impact.