This, according to MVA, will reduce annual Japanese arrivals to 178,036 from last year’s 210,567, and will translate to over $4 million in tax revenue losses. 500 jobs may also be lost, MVA said.
MVA officials met with Gov. Benigno R. Fitial and lawmakers yesterday to discuss this scenario and a proposal to provide monetary incentives to travel agents.
The CNMI may lose the Nagoya and Osaka flights in 2011, which “we cannot afford to happen,” MVA Managing Director Perry Tenorio said.
The instability of air service to the CNMI, he added, is one of the reasons for the decreasing visitor arrivals.
From 2004 to 2010, he noted, Japanese visitor arrivals are projected to be down by 206,809.
The direct impact to the CNMI economy of this decrease is $168 million, MVA said.
Tenorio said they are asking the administration and the Legislature to fund an air service stabilization incentive campaign for Osaka and Nagoya which will cost the cash-strapped CNMI government up to $6.2 million.
“We need your help to stop this spiral downward trend. If we don’t, we will be looking at a different CNMI in the future,” Tenorio told the lawmakers.
The campaign, according to Tenorio, is designed to secure a stable year-round daily air service from Osaka and Nagoya by giving cash incentives to the participating travel agencies. These are Kinki Nippon Tourist, Nippon Travel Agency, R&C Tours, Pacific Micronesia Tours, Top Tour Corporation, HIS, Hankyu Express International and JTB World Vacations.
Fitial said he is glad that solutions are being discussed to address the problem.
He is now looking at possible funding sources for MVA’s campaign.
“I hope the [lawmakers] will support it,” he said.
Speaker Froilan C. Tenorio, Covenant-Saipan, for his part, asked MVA why it didn’t “do something” about the problem years ago.
He also wants MVA to convince him that its proposal will work.
The tour agents and businesspersons who attended the meeting yesterday in the House chamber said even if the incentive comes immediately, there is not a lot they can do to reduce the impact of the “death valley” period.
Tasi Tours’ Frank Murakami said since this period is less than a month away, they cannot expect to get “good returns” even if they are provided incentives.
Triple J’s Bob Jones said it’s too late to improve the arrival rate for September.
But MVA’s proposal can help avoid a severe impact in the next death valley period.
“But if we don’t move forward now, we won’t have a budget for the next death valley. Knowing how the wheels turn, it’s doubtful that we can get the incentive implemented and see the result by September,” Jones said.
MVA Chairman Jerry Tan said they are hoping to “ease the pain” of the death valley period.
