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Numbers down 37 percent in June

By Connor Murphy HAGÅTÑA, Guam (Pacific Daily News, Aug. 5, 2009) - A report issued this week showed year-over-year declines in Guam visitor arrivals for the eighth straight month, but the worst may be over for Guam’s largest industry.

The island welcomed 60,100 visitors in June, down from 94,882 during the same month last year, according to the Guam Hotel and Restaurant Association’s preliminary monthly summary statistical report. This represents a 37 percent decrease, the report states.

Because hotels are selling fewer nights in their rooms, they are paying less in taxes, the report states. GHRA member hotels have paid US$2.2 million less in gross receipts and room occupancy taxes so far this year than they did at the same point in 2008.

The rocky global economy and widespread fears of catching the swine flu while traveling contributed to the low arrivals, said Jeffrey Schweizer, the hotel and restaurant association chairman and general manager of Fiesta Resort Guam.

"We knew June was going to be bad. It’s pretty much what we had predicted," Schweizer said of this week’s report. "That being said, I think hopefully, the worst is over."

The industry has already started its rebound, said Guam Visitors Bureau General Manager Gerry Perez.

"We’ve seen the worst of it," Perez said. "For July, we’re going to end up about 6 percent below last year."

Arrivals should show a small increase over last year’s figures by September, he said.

The discovery of swine flu in humans in April dealt a heavy blow to an already struggling tourism industry, Perez said.

Many would-be travelers decided to avoid airports for fear of catching the virus in large crowds -- canceling their vacations, he said. Travelers in large groups, such as school or corporate trips, were the most likely to cancel.

Summer is usually the peak for family travel, Perez added.

Guam’s first case of the flu was confirmed July 1, and Perez said a drop in arrivals at the beginning of that month can be partially attributed to that.

However, things started to rebound toward the end of the month and continue to do so, he said.

"People are starting to get normalized to just practicing good hygiene, whether they’re at home or in their travels," he said.

More than 1,700 cases of the flu have been confirmed in Japan, Guam’s largest tourist market, Perez noted.

A larger issue for Guam’s visitor industry is the continuing Asian recession, he said.

In January, Japan posted a record trade deficit as the global economic downturn strangled overseas demand.

The economy of South Korea, Guam’s second-largest tourist market, grew just 2.5 percent in 2008, its worst performance since 1998. That economy is expected to shrink in 2009.

A bright spot in the report was Guam’s highest-priced hotel rooms.

The high-average hotel rooms -- those priced above US$150 a night -- posted a smaller decline in occupancy numbers than other classes of hotel rooms. Additionally, their average price went up from a year ago, while other rooms’ prices dropped, according to the GHRA report.

This is an indicator of a change in the type of customers Guam is attracting, said GVB’s Perez.

"What we’re trying to do is grow the high-income group," he said. "What we lack in numbers, we try to make up in yield."

In 2005, only about 9 percent of Guam’s visitors made more than 7 million yen a year -- roughly US$65,000 to US$70,000, Perez said. This fiscal year to date, about 42 percent of Guam’s visitors make at least that much, he said.

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