CNMI Needs More Hotels To Keep Industry Going

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‘Guarded optimism’ suggested for current tourism surge

By Moneth Deposa

SAIPAN, CNMI (Saipan Tribune, March 1, 2013) – The Northern Marianas’ hotel industry seems to be on a path to recovery after registering a very encouraging 91.05 percent occupancy rate in January 2013. This is the highest hotel occupancy rate for the Commonwealth in the past 15 years. The last time the islands saw such a record-breaking number was in January 1998, at 91.96 percent.

Don't get too excited, though, cautions Nick Nishikawa, Hyatt Regency Saipan GM and chairman of the Hotel Association of the Northern Mariana Islands (HANMI). That phenomenal number is only because it's traditionally peak season for the industry.

Guarded optimism, that's the key. Nishikawa hopes that the positive trend will continue but this will highly depend on key factors that are beyond HANMI's control.

Nishikawa cited the importance of meeting the demands of the industry and one of that is the availability of rooms to accommodate all potential clients.

He disclosed that hotels in the CNMI incurred a shortfall of about 500 rooms in December due to the significant influx of tourists, mostly from China.

With the recent acquisition of Palms Resort Saipan and Coral Ocean Point Resort Club by the Korean conglomerate E-Land, Nishikawa is optimistic that this will help address the CNMI's hotel room shortage.

HANMI is a 12-member organization that includes Marianas Resort & Spa, Hyatt Regency Saipan, Hafadai Beach Hotel, Saipan World Resort, Pacific Islands Club Saipan, Kanoa Resort, Tinian Dynasty Hotel & Casino, Century Hotel, Aquarius Beach Tower, and Saipan Oceanview Hotel.

In January this year, CNMI hotels sold over 67,000 of the more than 74,000 available rooms. That compares well to the 63,000 rooms that were sold in January 2012.

This uptick in hotel occupancy, Nishikawa said, will highly depend now on the sustainability plan of the CNMI to keep or increase these arrivals.

Nishikawa pointed out the need to build additional hotels, development of new sites and activities for tourists, keeping the environment clean, and most importantly securing the safety and security of tourists.

Additionally, hotels are faced with challenges brought by federal immigration issues that now threaten the loss of nonresident workers. Coupled with concerns on increased utility costs, taxes, and minimum wage issues, these further add to the challenges of the local hotel industry.

Tourism mix

Since the middle of last year, the number of Chinese tourists on island has been steadily rising. Nishikawa attributes this success to the additional charter flights from China such as from the Beijing and Shanghai routes and the use of bigger aircrafts.

Coupled with Japanese tourists, which Nishikawa says remains the islands' biggest market, and the surge in Korean tourists, that gives the CNMI a "good mixture" of its three main markets-Japan, China, and Korea-all spelling potential success for the rebounding industry.

The Inos administration also welcomes the surge being felt across most tourism markets of the Commonwealth.

Press secretary Angel Demapan told Saipan Tribune that the increasing number of Chinese tourists, along with the Russia market, "is certainly giving our economy the help it needs during these difficult times. Although, the Japan market has traditionally been the No. 1 source for our industry, we do recognize that they have been tackling their share of challenges over the past years. Still, Gov. [Eloy] Inos continues to work with the [Marianas Visitors Authority] to maintain a strong presence in the Japan market."

Administration concern

Demapan said the Inos administration is very much aware of the need to boost the number of available rooms in the Commonwealth. He said this needs to be addressed in order to see the continued travel of tourists to the islands.

"Gov. Inos is keeping a close look at the emerging need for more rooms for our visitors. With the increase of arrivals stemming largely from the additional charter services from China, the administration is concerned that travel partners will have to turn away valued customers because of the lack of rooms," he said.

The CNMI, Nishikawa said, must also improve the destination's infrastructure so it can compete with other markets.

Demapan said, the administration will continue pushing the initiatives by the Tourism Task Force to undertake efforts to beautify the island and to implement safety measures at all popular tourist sites.

Based in HANMI's records, hotels on the island recorded their highest annual room occupancy rate in 1996 when it recorded 85.57 percent occupancy. The annual rate was at its lowest in 2001 with 54.43 percent. In 2011, hotels registered an occupancy rate of 73.06 percent. These numbers do not include available rooms in hotels and inns that are not members of HANMI.

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