CNMI HOTELS TURN TO RENTALS AS TOURISM FLAGS

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By Haidee V. Eugenio

SAIPAN, CNMI (Marianas Variety, May 26) - The number of hotel rooms in the Commonwealth of the Northern Mariana Islands (CNMI), particularly on Saipan, has dropped amid the continuing decline of visitor arrivals, according to the latest five-year master plan of the Marianas Visitors Authority.

MVA said no new hotels have been built in the CNMI since 1998 and some of those existing have been turned into apartments or cheap hostels just so the owners can partially recover their investments.

Some hotels are now renting their rooms for as little as $50 a night from an original price of over $150 a night.

Other small hotels have turned into apartments and are now offering rooms for as low as $200 a month.

MVA’s report said 500 more hotel rooms must be built if the CNMI wants to reach its goal of attracting as many as 1 million tourists within the next four years.

"The current room inventory in the CNMI is estimated at this time to be 4,347, which means that with the administration’s five-year goal of bringing in 1 million tourists, there is a need to develop one or more additional hotels to accommodate this number," MVA said.

The report does not indicate how many of the more than 4,000 rooms are actually still being used for tourist accommodations.

MVA statistics show that there were only 766 rooms in the islands in 1978.

Ten years later, there were already 1,824 hotel rooms and after another decade the number had reached 4,642.

Bargain hunters

Over the past four years, eight major Japanese or Korean-owned hotels have changed ownership as a direct result of the Asian financial crisis and other world events that have crippled the international travel industry.

For the bargain hunters, the situation is an opportunity to secure new investments at low cost.

"When Japan’s economy declined and other world events affected regional tourism by 1997, some owners who were saddled with the debt decided to sell their properties. From approximately 2002 to the present, numerous hotels changed hands to a second generation of owners," the report said. "Saipan Diamond Hotel (now Saipan World Resort), the Dai-Ichi Hotel Saipan Beach (now Fiesta Resort & Spa) Aqua Resort Club, Hafa Adai Beach Hotel, Saipan Grand Hotel, Rota Resort & Country Club, Chalan Kanoa Beach Club and Saipan Koresco Hotel."

A similar situation was also noted in Hawaii and Guam at about the same time.

However, the tourism industries of Hawaii and Guam have recovered while the CNMI’s arrival rate further declined after Japan Airlines pulled out of Saipan in Oct. 2005.

MVA’s report said the Northern Marianas hotels are also challenged by the high costs associated with maintaining their facilities.

Many hotels have to provide their own power and water supplies because the Commonwealth Utilities Corp. is still unable to adequately meet their demands.

CUC’s water is also not drinkable.

MVA’s report said the CNMI government should identify ways to improve the efficiency and profitability of the islands’ hotels in terms of utility services.

It added that MVA’s marketing strategies should reach out to a more diverse market "in light of the loss of air seat capacity from the island’s major market of Japan."

JAL accounted for more than 45 percent of Japanese tourists traveling to the islands every year.

A study shows that it will take the Northern Marianas about two years to bring back the 2005 level of more than 370,000 Japanese visitors a year.

May 29, 2006

Marianas Variety: www.mvariety.com

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