NORTHERN MARIANA ISLANDS TOURISM INDUSTRY CHOKING

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Fewer Japanese To Take Summer Trips To Saipan, Others

By Aldwin R. Fajardo Editor

SAIPAN, Northern Mariana Islands (July 29, 2002 – Saipan Tribune)---The Northern Marianas is bracing for another slow year in visitor arrivals, with its top tourism market -- Japanese travelers -- reportedly planning to cut back on overseas trips this summer.

This translates to another bad news for the Commonwealth, whose ailing economy is beset with declining government revenue from the garment manufacturing sector.

According to a report released by the Japan Travel Bureau, the number of Japanese planning to take overseas trips during the period covering July 16 to August 31, 2002 dropped 6.6 percent from the tally a year ago.

This marks the steepest plunge since JTB started tracking tourism trends in 1969.

The JTB survey expects the number of Japanese tourists traveling to Guam and Saipan this summer to fall by 18 percent. Summer trips to Hawai‘i are anticipated to drop by 19 percent.

This, as bookings to Indonesia and Australia are reportedly doing well.

Economic analysts say the events surrounding the Sept. 11 attacks on the World Trade Center and the Pentagon in the U.S. may have continuously sowed fears among Japanese travelers, although the gloomy outlook for Japan’s economy -- as well as falling salaries -- may also be playing a role in the decline.

In his interview with the Asian Wall Street Journal, Japan Airlines President and Chief Executive Officer Isao Kaneko said things are not looking good for July and August.

In dollar value, the JTB report says Japanese tourists are anticipated to spend about 4.5 billion U.S. dollars on overseas travel during this summer, lower by 5.5 percent from the previous year’s record.

According to the JTB report, the decline will specifically impact the mainland U.S., Hawai‘i, Guam and the Northern Marianas. The last three have been the traditional summer destinations for Japanese tourists.

Less costly beach destinations in Asia -- such as Indonesia’s Bali, Thailand’s Phuket and the Philippines’ Boracay and Palawan -- are giving Hawai‘i, Guam and the Northern Marianas stiffer competition.

The JTB report also mentions that there has been an increase in the number of flights this year to some Asian destinations, leading to lower air fares.

Guam has started intensifying efforts to lure Japanese tourists back this summer. The government’s tourism agency is giving out a booklet of discount coupons for the first time to families traveling with children, which can be used in some restaurants and retail shops.

In Hawai‘i a shopping center is trying to lure young Japanese women by selling sealed bags stuffed with unidentified products.

The Northern Marianas is not to be left behind. The Marianas Visitors Authority recently launched the Marriage in the Marianas wedding promotional campaign as well as the Happy Children in Paradise program to lure family travelers.

Any news of declining visitor arrivals to the CNMI should alert the local government, considering earlier economic projections painted a not-so-rosy picture. Visitor traffic to the Northern Marianas was down for the first four months of 2001 while the Saipan Garment Manufacturers Association announced that sales will be down for the year.

SGMA data disclosed that Saipan apparel manufacturers sold $1.04 billion worth of garment products in 2000. The figure was anticipated to drop to $919 million last year.

The Saipan garment industry employs 16,575 workers as of 2000, 540 of whom are U.S.-born while 1,015 are Micronesians.

Bank of Hawaii economist Wali Osman projected a gloomier economic picture for the Northern Marianas four years from now when changes in world trade rules are implemented, including the lifting of import quotas beginning in January 2005.

Changing world trade rules, namely removing quotas from imports, beginning in January 2005, may improve the comparative advantages of large producers such as China and Mexico.

Osman’s report disclosed that the garment industry has prevented a more severe economic decline as the Asian financial crisis and the stagnant Japanese economy slowed tourism down in 1998-2000.

The apparel manufacturing sector supplied 35 percent of the CNMI government revenues during this period, which makes the sector a more vital driver of the local economy.

During the time business gross revenues from restaurants and bars were down 25.6 percent, revenues from hotels were down 49.3 percent and retail sales were down 34.4 percent, garments increased 45.8 percent. Still, tourism remains the Commonwealth's most promising source of income, although the CNMI continues to scramble for new carriers and more airline seats.

The local government should create incentives for some carriers, such as a reduction in landing fees and other costs while upgrading and maintaining airport facilities in order to compete with the more popular Pacific destinations.

For additional reports from The Saipan Tribune, go to PACIFIC ISLANDS REPORT News/Information Links: Newspapers/The Saipan Tribune.

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