Marianas Variety

Last updateSat, 19 Oct 2019 12am







    Friday, October 18, 2019-10:56:30A.M.






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HANMI chair urges government to look into B&B operations

THE Hotel Association of Northern Mariana Islands has called the government’s attention to bed & breakfast and similar guesthouse operators, who may be evading hotel occupancy tax payments while “operating in plain sight”

“I am hoping that the new secretary of Finance will do a better job of addressing this issue,” said HANMI chair Gloria Cavanagh.

Cavanagh said every year they remind the central government that industry stakeholders have agreed to pay a higher occupancy tax rate to generate more funding for marketing and promotions.

If the CNMI is unable to promote its tourist destinations, tourist arrivals and the local economy would further decline, said Cavanagh, who is also board vice chair of the Marianas Visitors Authority.

She noted the importance of MVA’s offshore marketing and promotion offices which are now owed $1.7 million because of the CNMI government’s failure to regularly remit hotel occupancy tax collections to MVA.

But Cavanagh said the Department of Finance has assured MVA that “they will remit what they can afford” to remit.

She said for years, the MVA board had considered ways to collect fees that would fund its marketing and promotion campaigns.

But she said there were either conflicts with a U.S. government agency like the Federal Aviation Administration or the difficulty of collecting fees when dealing with groups checked in by tour agents.

Cavanagh said it was the late Gov. Eloy S. Inos who proposed an increase in the hotel occupancy tax to 15 percent from 10 percent, with 80 percent of the collections earmarked for MVA.

But since the hotel tax was raised, she said the Legislature has diverted tourism funds for non-intended purposes.

She said the Legislature also took away MVA’s $3-million operational budget, which makes the tourism agency completely dependent on the hotel occupancy tax collections.

“Now we are in a position where there is an emergency declaration and we are making the same mistakes that we did back several years ago,” she said, referring to the reduced funding for tourism promotions.

“We cannot compete in this industry without a strong marketing presence. When MVA finally received more funding years ago, we were finally able to improve arrivals and help grow our economy again,” she added.

Despite MVA’s dire financial situation, Cavanagh reiterated that closing its offshore offices in Taiwan, Japan, China and South Korea is not an option.

“Once we lose our presence in the tourism arena, it will take 10 times the amount of money and years to get it back. So aside from MVA’s efforts, each individual hotel runs different marketing and promotions in our markets,” she added.