Is Saipan Ready For A 7,000 Room Integrated Resort?

Pacific Islands Development Program, East-West Center With Support From Center for Pacific Islands Studies, University of Hawai‘i

Commentary

By Jayson Camacho

SAIPAN, CNMI (Saipan Tribune, June 9, 2015) – Ready or not is actually not the question. Rather, it is whether the $7.1-million, 7,000-room mammoth project that Best Sunshine International, Ltd. says it will build is scaled for the CNMI, with its limited land area and workforce.

Everyone hopes the project pulls through but interviews with businessmen and professionals yield the answer that it’s not so much that an integrated resort isn’t a good idea but whether Saipan can handle it and where it is going to get the manpower, infrastructure, and eventually the tourists that are needed to make it viable.

In the case of Singapore, where two world-class integrated resorts and casinos—the Marina Bay Sands and the Resorts World Sentosa—are located, there are over 5 million residents in the city state alone, not to mention more than a million visitors each year.

Compare that to the CNMI, which only has about 50,000 residents, including foreign workers, and nearly 500,000 tourist arrivals each year. Even then, the arrivals numbers have only recently become rosy after about a decade of stagnation.

In 2004, arrivals to the CNMI were at 531,584. A host of negative events, including Japan Airline’s pullout from the CNMI and the Asian crisis, resulted in a dramatic drop, with the tourism industry bottoming out with a historic low of 338,106 in 2011.

Arrivals started picking up in 2012 with 389,475 and 433,925 in 2013. The numbers are projected to reach 472,709 by the end of 2015, according to data from the Marianas Visitors Authority.

What does the business sector think?

Saipan businessman Paul Zak said the whole idea for an integrated resort and casino is to give tourists options. In the case of Resorts World Sentosa, it has theaters, mall shops, attractions, including the Universal Studios, a water park, and branded restaurants.

"I don’t know whether we could do that in the CNMI but we need a theater. We need some place to put on some shows and I think we can just scale that down to the point where we can handle the shows. The whole idea is for tourists to be able to get good shopping, food, entertainment, and activities—that is exactly what we want to do," Zak said.

"The casino is always crowded; however, the attractions, malls, shops are the main focus. Most of the people we saw were not in the casino and they were around the casino doing things. The CNMI doesn’t even have near the quality of restaurants that they have here. To be able to give opportunities for the guests…One of the things we have on Saipan is that there are things that they are able to do in the day, but then at 6pm, what? Thank God they have things to do because I don’t think that the best to do is just visit bars and clubs," he added.

Singapore’s integrated resort offers a convention center, which according to Zak, is a great idea.

"New tourists are coming in because of the convention center and I think it’s a great idea. Do I think we can fill 20,000 to 30,000 people in there? No, but with a convention center we will have new types of conventions," he said.

"I think that the idea is right, but the scale and the size is something that we need to look out for. But the things that we can look forward to is that tourist will have a great adventure and when they are leaving, they could say they had great time," he added.

Saipan Chamber of Commerce president Alex Sablan said the CNMI obviously wants to see the project flourish because it needs something to kick start its economy again and Best Sunshine is offering the best opportunity going forward.

"We’re hoping that we could get our leadership to plan the right type of investment, development, and to ‘right size it’ for the CNMI because obviously here in Singapore, the product here is very large and extravagant that would dwarf the CNMI in respect to the types of development. So I think the CNMI government needs to sit down with the developer and come up with a plan," Sablan said.

"How do they entice the type of market that we need to keep our facility operational? Because at the end of the day, we don’t want it to fail we want to see it flourish and survive. So we’re hoping there is some kind of sit down with the government and determine what is best for the islands, what is best for Best Sunshine, and really what’s best for the overall community," Sablan added.

Tao Xing of Imperial Pacific Int. Holdings Ltd. corporate services and communications said that Saipan provides unique value compared to Singapore and any other place that has an integrated resort. Imperial Pacific is the mother company of Best Sunshine.

"I am sure there is a major segment in terms of population that would want to come to this kind of resort on Saipan. That is the uniqueness that Saipan has. I think we need to have a plan to do that and market our product out. Since we have limited resources in terms of manpower, infrastructure, and among others, we need to make sure that our plan makes the best use of the limited resource that Saipan has," Xing said.

"We could go to the mass market or the premium market in terms of getting tourists. We need to figure out a way to get the customers to come to the island. That is collectively for all the businesses on Saipan and may bring prosperity to the island," he added.

Does CNMI have the capacity?

Aside from Best Sunshine proposing its $7-billion project for an integrated resort and casino, other hotel developers are investing in hotels on Saipan as well, which would bring a toll to the little island’s meager infrastructure.

If the right developer comes in, the CNMI can negotiate new infrastructure to be put in place as a bigger and improved power grid and new water and sewage systems would be required to service new projects.

"I think infrastructure can be resolved. What can’t be resolved is the overall effect of 10,000 rooms in the Commonwealth. With the tourists, we have an expected number of tourists coming in; however, that is what we need to plan and envision," Sablan said.

"So forward thinking, if we can envision to bring in other carriers and other airlines, then maybe we have a chance at this. But we have to think about this. But then we also have to think about how many people do 80 percent occupancy and 10,000 rooms come to? In our count it is nearly over 2 million to fully occupy the rooms," he added.

"Is the CNMI ready for more than 2 million, if we could get it? That is something that we need to sit down as an entire community and ponder and see what it looks like for us. The one thing that sells the CNMI is that we are a pristine and a tropical paradise."

What about employment?

Employment is another problem, Sablan said, and that’s’ where the CNMI leadership needs to sit down and come up with a plan.

"This is another dilemma because even if we could have the 10,000 rooms operational, we don’t even have it today for the workforce. We’re having difficulties throughout our registry having qualified people coming into our hotels and operating them. So we’ve been talking about this for a couple of years, so we have a problem in bringing foreign [workers] and revenue to train the current workforce. Government needs to sit down and plan this thoroughly," he said.

Zak said he was surprised at the number of people who are employed at the two integrated resort casinos in Singapore.

"There are more than 20,000 people employed alone in these integrated resorts and casino. The availability of employees from Malaysia provides 60 million people. That is a cheap source of labor. So we are going to have a problem on how to carry off the entertainment. The whole thing about an integrated resort and casino is that it is a workable idea in order to put a lot of activities in one place. That is not a problem. It’s scaling that I think that we will have a problem. Could we carry off a $7-billion project? We would sink. Because there is just not a lot of people. I hope Best Sunshine can," Zak said.

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