Arrivals from Japan fell 21 percent to 17,214 visitors in March.The March 5 Saipan Marathon attracted a record number of 800 participants, but nearly 1,800 cancellations were made from Japan following the March 11 earthquake, tsunami, and resulting nuclear crisis.Prior to the earthquake the NMI was averaging a healthy 87 percent airplane load factor from Japan for the month, but the load factor dropped to 64 percent following the disaster.Overall, arrivals from Japan in March 2011 compared to March 2010 had been down 8 percent before the earthquake, dropping to -26 percent following the disaster.Also, since December 2010 one daily flight from Narita was been reduced to only three times a week.Therefore, instead of three daily flights from Narita, the NMI receives two daily flights from Narita and one flight arriving three days per week.
However, industry watchers are indicating that outbound travel from Japan is already starting to recover to normal levels, and that cancellations have almost entirely worked themselves out of the system.Generally, MVA and authorities from popular tourist destinations such as Hawaii, Guam and South Korea predict a 20-30 percent decrease in Japanese arrivals for the coming two to three months.
Arrivals from the primary market of Korea posted its first loss this fiscal year, falling 14 percent to 7,072.While the airline load factor prior to the earthquake was an average 73 percent, fears of radiation from Japan reaching the NMI caused the average load factor to fall to 59 percent for the month.Overall, arrivals from Korea in March 2011 compared to March 2010 had been up 2 percent before the earthquake in Japan, dropping to -22 percent following the disaster.Meanwhile, Asiana Airlines has decided to discontinue its Busan-Saipan service, effective June 6, 2011. Asiana said that the profitability of the Busan-Saipan route was insufficient to continue operating the service due to low average load factors.
The secondary market of China saw 2,707 arrivals in March, also a 15 percent decline over the same month last year.The NMI received one charter flight in March 2011 compared to two charter flights in March 2010.
Arrivals from Russia posted a healthy 31 percent increase to 650 arrivals in March, continuing to ride the strength of the Russian Ruble and publicity gained from several media and travel agent familiarization tours to the Northern Marianas in late 2010, including one television program that continues to be replayed nationwide due to its popularity.
Arrivals from the United States increased 51 percent to 1,137, bolstered by the arrival of one military vessel.Meanwhile, other source markets were lower, including Guam down 16 percent (1,307 arrivals), Philippines down 22 percent to 35, and Other Areas down 17 percent (246).
Japan and Korea economic highlights
The Japan Cabinet Office’s monthly economic report showed optimistic signs, but emphasized a degree of uncertainty due to the March 11 earthquake.While the Cabinet report expects the economy to pick up in the short term, it will be influenced by the earthquake, as well as oil prices and movements in overseas economies.Almost all investment banks predict economic growth in the second half of the year.
The yen hovered around 83 to the dollar before soaring to a new record high of 76.25 as donations flooded in and Japanese insurers repatriated funds.The Bank of Japan and G7 promptly intervened, and trading for March closed at 83.40 yen to the dollar, in-line with pre-earthquake levels.
According to an AB Road survey, when Japanese consumers are deciding on where to travel, 16 percent of respondents who chose domestic travel also weighed the choice of international travel, representing high potential for more market share for overseas destinations. For example, Japanese consumers who chose Okinawa also equally considered Saipan, Guam and Hawaii before making their final decision.
Meanwhile the Korean economy recently faces inflationary pressure amid the continuing rise of employment rates. The Bank of Korea announced that Korea’s per-capita income climbed back to $20,000 in three years, making Korea now one of the ten most affluent countries around the world.
In March, the won/dollar exchange rate fell 27.83 to close at 1,096.37. In April, the won/dollar exchange rate is expected to continue to fall due to the foreign net buying of stocks and the Korea Composite Stock Price Index hitting an all-time high with the expectations of the recovery of the U.S. economy.
