Gov. Arnold I. Palacios speaks to reporters during a press briefing in his conference room on Capital Hill, Tuesday.
GOVERNOR Arnold I. Palacios on Tuesday asked the Department of Finance-Division of Revenue and Taxation to look into the impact of Hyatt Regency Saipan’s closure on the CNMI government’s revenue projections.
Citing “challenges” faced by the local tourism industry, the hotel announced on Monday that it will shut down on June 30.
In a press conference following the proclamation signing for Marianas Tourism Month, the governor said he and Lt. Gov. David M. Apatang were taken aback by the announcement of Portopia Corp., the company that owns Hyatt Regency Saipan.
Palacios said Hyatt’s closure will directly impact the hotel occupancy tax on which Marianas Visitors Authority relies. And obviously, he added, it will impact government revenue.
In a separate interview, Speaker Edmund S. Villagomez said, “This will definitely change the [revenue] projection maybe for the rest of the fiscal year.”
But he said they still need to look at the number in terms of hotel occupancy to determine how deep the impact of Hyatt’s closure on the government’s current fiscal year budget projection will be.
He said the departure of one of the island’s major hotels “will impact economic activity in the CNMI.”
“And to have a brand name like Hyatt, for a long time, then, all of a sudden leaving our shores, it’s a challenge but it’s a challenge that we definitely will work through,” Villagomez said.
Most of Hyatt’s employees are U.S. qualified workers.
The governor said his administration is still trying to get as much information as it needs to see how they can cushion the impact of the hotel’s closure.
He said he asked CNMI Labor Secretary Leila Staffler to put together a plan to make sure that the employees of Hyatt will find new jobs.
“I know that it is very difficult,” Palacios said. “We spent a couple of hours thinking about this, in the wee hours of this morning, but Hyatt made a corporate decision. So within that corporate decision what do we do? What is the option for the Commonwealth? Those have to be explored extensively, deliberately, and we certainly will listen to what MVA has to suggest and recommend going forward.”
Very unfortunate
Noting that just three years ago, the CNMI government and the Hyatt signed a new 40-year land lease agreement, Palacios said the hotel’s decision was “very unfortunate.”
He said he and Apatang were “disappointed and saddened at the same time.”
Palacios said his administration is looking at “everything that we need to do.” The CNMI government must also protect the Hyatt property and make sure that its employees are taken care of, he added.
“So we are looking at everything that we need to look at in terms of … potential opportunities,” he said.
“Unfortunately, disappointingly, and I’ll be very clear on that, we have not really gotten much information from Hyatt and the local management of Saipan Portopia,” Palacios said.
“We are trying our best to see if Saipan Portopia wishes to discuss anything,” he added. “The attorney general and I were sitting down with legal counsel, and even with [Department of Public Lands] officials to take a look at what are the possible road maps going forward,” Palacios said.
The most disappointing part, the governor said, “and I will be very honest, is that at the very least we should have been given notice.” He was glad though that Hyatt gave its employees a 60-day notice.
One door closes, another one opens
The governor said he may form a legal and economic team to “take a look at the industry and see what are the possibilities.”
“The world is full of choices,” he said, adding that new investors have leased public lands so “we certainly will do everything to help them survive.”
In the last 14 months, the governor said, “this administration has done a lot of things to get us back and [revive] tourism.”
He said these include building infrastructure and looking for funding for all kinds of projects.
“We are not going to stop,” he said. “Like I said, one door closes, another one will open. Those properties that are there, mostly public lands. So we do have possibilities.”
He said there are potential investors from Japan, South Korea, Taiwan “and even outside the Indo-Pacific area, and they are taking a look at potential hotel resort sites on island.”
Still, Palacios said, it’s a challenge. “I wake up in the morning knowing the challenges, but we got to go out there and face them. It does not help that we talk down on each other. Just come up with a proposed solution, something that we’ve got to take a look at.”
