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Audit report: MVA revenue down by $3.3M in 2019

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ALTHOUGH the overall financial or net position of the Marianas Visitors Authority increased by $1,059,279 from 2018 to 2019, the CNMI tourism agency’s revenue significantly dropped by $3,311,692, according to an audit report posted online by the Office of the Public Auditor.

The net position represents MVA’s “residual interest in its assets net of liabilities.”

MVA’s financial statement and supplementary information for the years ended Sept. 30, 2019 and 2018 revealed that the restricted component of its net position increased by $1,059,279 compared to FY 2018’s. These were funds allocated for future expenditures.

But the total revenues for fiscal year 2019 amounted to $12,319,992 — a $3,311,692 decrease from the fiscal year 2018 total, which was $15,631,684.

In 2017, MVA’s revenue was $15,585,733.

MVA’s financial statements were audited by Burger & Comer, P.C.

In its management discussion and analysis, MVA attributed the tourism industry’s “difficult situation” in 2019 to Super Typhoon Yutu that hit the CNMI in October 2018.

MVA said the super typhoon “left our islands and industry in a difficult situation [marked by] the closure of airport operations, power and water outages, structural and debris damages and many more.”

MVA also said the cancelation of direct flights from Japan in 2018, the closure of Mariana Resort & Spa and Coral Ocean Point Resort and the devastation brought by Super Typhoon Yutu coupled with worldwide economic factors “proved to be a difficult year for the tourism industry for fiscal year 2019.”

Visitor arrivals for FY 2019 plummeted to 424,858, a loss of just over 30% of FY 2018 visitor arrival total, 607,543.

This resulted in loss of jobs, loss of revenue for the central government and hotel occupancy tax collections for MVA operations and marketing.

MVA said its fund balance in fiscal year 2019 decreased by $4,085,391 due to the non-remittance of MVA’s share of the hotel and occupancy tax collections.

Moreover, the outbreak of Covid-19 has “suddenly pressed the pause button on the tourism industry in 2020.”

MVA added, “Covid-19 has brought global tourism to a standstill. Despite all these challenges, our tourism industry is facing an opportunity to respond to the market situation in a timely manner so as to prepare in advance for the recovery of the tourist market after the epidemic and provide tourists with better and more thoughtful travel services and products.”

However, the “tourism industry in the Marianas will be very different once travel activities are allowed to resume. The ‘new normal’ would involve enforced health security standards for both tourists and personnel and the rest of the community. While the industry adjusts to the ‘new normal,’ MVA will focus on attracting its key source markets back to the Marianas. The Marianas continues to offer the ideal destination to potential travelers due to its natural environment and relatively low population so travelers are not faced with [a] crowded environment.”

To be continued

 

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