JAL PULLOUT CAUSING JOB LOSES IN SAIPAN

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By Jude O. Marfil and Gemma Q. Casas

SAIPAN, CNMI (Marianas Variety, Aug 1) – With Japan Airlines confirming that it will pull out of the CNMI beginning in October, some hotels on Saipan have begun laying off employees or cutting their working hours, according to the Hotel Association of the Northern Mariana Islands.

Last Friday, JAL made a formal announcement of its decision to suspend flights to Saipan from Narita International Airport in Tokyo and Kansai International Airport in Osaka effective Oct. 4.

Various hotel executives on Saipan said the withdrawal of flights has forced them to implement more drastic austerity measures.

"(We have) not quite recovered from a downturn that began in 1997," said HANMI Chairwoman Lynn A. Knight, an executive of garment magnate and Saipan Tribune owner Willie Tan, who has also acquired at least three hotels on island.

"In some cases, hotels are operating at a reduced number of staff and hours," she said.

Coral Ocean Point Resort Club in Agingan is planning to lay off at least 20 percent of about a hundred employees, said the hotel’s general manager Yoshiro Kishimoto.

Coral Ocean Point, which heavily relies on Japanese tourists, is already experiencing a 40 to 50 percent occupancy rate.

Variety was told that Marianas Resort & Spa in San Roque is also reducing its workforce while Hotel Nikko Saipan is now looking for a buyer for its 310-room facility. Both hotels are dependent on Japanese tourists.

Beginning Oct. 1, Aqua Resort Club Saipan in Achugao will cut the working hours of its 133 employees from 40 to 36 per week.

"We anticipate that the JAL pullout will result in the reduction of arrivals. So we are reducing working hours for 90 days from Oct. 1," said Yoshimi Kodama, Aqua Resort’s sales manager.

Pete Igitol, vice president of the 440-room Hafa Adai Beach Hotel in Garapan, said they are still in a "wait-and-see mode."

"We know that JAL is leaving soon but we don’t know what our fate will be. We have not reached that stage yet where we have to cut workers or their working hours," said Igitol. "Right now, we are just trying to survive. Our occupancy rate is about 70 percent."

Among the hotels on Saipan, Pacific Islands Club in San Antonio is apparently the least affected by JAL pullout.

"We don’t have plans to reduce workforce or hours because we have diversified our market. We have tapped the Korean and Russian markets," said PIC general manager Keiran M. Daly.

The 300-room PIC’s market is 43 percent Korean, 45 percent Japanese and the rest are either Russians or locals.

Even though its 325-room facility is half-empty, Hyatt Regency Saipan in Garapan is thinking twice about reducing working hours or manpower.

Job losses

Citing a study conducted for the Strategic Economic Development Council, HANMI’s Lynn Knight said they believe that some 2,800 jobs may be lost with JAL’s exit.

This would bring to more than 5,000 the number of jobless foreign workers in the Northern Marianas within a span of less than a year.

In recent months, more than 2,300 foreign workers from China lost their jobs with the closure of four garment factories that can no longer compete against manufacturers in foreign countries that produce cheaper apparel.

Knight said the tourism-based economy of the CNMI stands to lose $144 million in direct and indirect income due to JAL’s exit.

Monday, August 1, 2005

Marianas Variety: www.mvariety.com

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