We recently holidayed in Fiji with nearly 5 yo ds and nearly 2 yo dd. Last time we went to Fiji (honeymoon, 10 years ago) it was mainly Australians and New Zealanders but this time plenty of people from UK and US, so travel costs must be lower(?) now.
Stayed in two places, Shangri-La's Fijian Hotel on the coral coast and Castaway Island. The Fijian was very geared to families. Two children stay free in parents room (small additional cost for additional children or second adjoining room booked for children is at half normal price) and all meals for children are free, full buffet breakfast for adults also free (included in price)each morning. Kids club will take kids from 2 years to 12 years, they have three different age groups (2-4, 5-8 and 9-12). Kids club is free and has morning, afternoon and evening sessions. Our dd was not yet 2 yo so we paid a babysitter to go to kids club with her, this was very inexpensive at FJ$5/hour. Kids were inducted as members of kids club (even little dd) and received a t-shirt and certificate. Plenty of activities for eveyone at the resort, all non-motorised watersports were free, most other things very inexpensive. We only stayed a few days but easily could have filled every day for two weeks with new activities!
Castaway Island was also very child friendly, but more expensive. Children stayed free in our room (was actually two rooms and bathroom) but had to pay a meal plan for children 3 years and over. Meal plan included full buffet breakfast, lunch and dinner from children's menu (good variety at each meal and different every day) and pizzas from woodfired pizza from 11 am each day. Kids club at Castaway was free for children 3-12 yo. They had morning, afternoon and evening sessions and children younger than 3 could attend with a babysitter (FJ$4/hour). There were so many activites for the kids it was amazing, within minutes of arriving on the island ds was whisked off to go fish feeding and play ball games on the beach! Kids had a ball and we apent alot of time either relaxing on the beach/by the pool or canoeing, sailing, snorkelling, bushwalking or playing tennis - all at no extra cost.
Can't recommend Fiji highly enough as a holiday destination for anyone, but for families in particular!