ON Feb. 1, 2024, Saipan Chamber of Commerce and Hotel Association of the NMI officials appeared before the local House of Representatives to thank Rep. Ed Propst for introducing House Resolution 23-19: “To express support for the Economic Vitality & Security Travel Authorization Program or EVS-TAP and encourage the Department of Homeland Security to work with the CNMI Government and its leaders to facilitate the responsible promotion of the Chinese tourism market.”
The local Senate adopted a similar resolution in Dec. 2023. Around the same time, Congressman Kilili also expressed support for EVS-TAP, which was a recommendation of the CNMI-U.S. 902 talks in 2019. For his part, Governor Palacios told reporters that he was “not saying we’re not going to welcome [Chinese tourists]. I never said that.”
Well and good. Boosting CNMI tourism arrivals should remain a nonpartisan issue.
During the House session on Feb. 1, 2024, a hotel executive noted that Korea was the only market providing a significant number of tourists to the CNMI, but the numbers were still below the pre-pandemic levels. Moreover, prior to Covid, Korea was about 50% of the total arrivals. Even if Korean arrivals “return to normal” — which would take time — they’re still half of the usual arrival rate. The missing half is the primary cause of the CNMI economy’s current woes, and, consequently, the government’s revenue shortfall.
The Marianas Visitors Authority has been reaching out to Japan, Taiwan, Australia and other markets. But as an MVA official has pointed out, “We say, okay, we’re going to increase the Japan arrivals. That’s not easy…. You know, a lot of people forget that we’ve been off the shelf in Japan since May of 2018 and that we’re dealing with a different generation altogether. At MVA, we are looking at actually trying to redo our positioning in Japan to reach out to that new generation by hiring different types of advertisers and marketing companies that will be able to approach those types of…generation…. There are a lot of markets that we haven’t touched and a lot of markets that we can grow. But do we have time for that? We look outside, we feel it. It’s desperation….”
Another hotel executive said a 40% occupancy rate is currently considered “good.” But not good enough. Actually, it is not good at all. According to HANMI, “hotels typically require around 70-80% hotel occupancy to stay in operation.”
This is what a hotel executive told House members over three months ago:
“The other hotels, they are like…10%, less than 10%. They are financially struggling. Their well is drying now. We are not sure how many months we can sustain ourselves.” (My italics.)
The chamber and HANMI officials were back in the House on Feb. 9, 2024, this time to ask its members to urge federal authorities to reinstate Annex VI of the U.S.-China Air Transport Agreement. This will exempt the CNMI from the China-U.S. flight cap imposed by the feds. CPA, Senate President Edith Deleon Guerrero and Congressman Kilili have already sent their own letters of request to the U.S. Department of Transportation.
Kilili couldn’t be clearer. He said “regaining access to the Chinese tourism market would help our ailing economy recover. However, I believe this could only be possible if the Northern Mariana Islands is exempted by DOT from the limit on the number of scheduled flights from Chinese air carriers to the U.S., as allowed under the provisions of Annex VI.”
A hotel executive told the CNMI House on Feb. 9. 2024:
“A lot of people have said…that this will only benefit two companies. That’s never been the case. I would like to state when you’re looking at the higher-end hotels, Kensington, 40% of the occupancy is Chinese, Aqua 30% of the occupancy, Chinese. Hyatt at any given point, 70% of their occupancy was Chinese….
“The Chinese visitors actually go out [of the hotels] and patronize other restaurants…. And they go out shopping. And so DFS has a very high percentage of their revenue is from Chinese market [which] outspends the Korean market three times…. Without [the China market] you can just imagine what the occupancies are…. With just one market [Korea], [hotels] are barely breaking even. Why? Because the Chinese are the ones that push [the Average Daily Rate] high…. We need [the China market]. They outspend the Korean market multiple times. So it’s not just benefiting two companies, it’s benefiting the whole economy of the CNMI.”
On April 29, 2024, the Japanese company that owned Hyatt Regency Saipan announced it was shutting down.
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In a somewhat related topic, a Canadian “military history fan” posted the following comment on Quora:
“The Chinese media is no fan of Japan…nor is it a huge fan of the USA. Yet literally millions of Chinese travel to and visit these two countries, one an ostensible ‘WW2 enemy,’ the other ‘trying to contain China.’ Yet people go anyway. It’s the same dynamic with Japanese traveling to China or Korea or wherever their media doesn’t like. People’s curiosity and common sense overtake media hysteria. Most people with common sense can set aside media hysteria for a clear look at reality when given a chance.”
Says a recent headline of The Wall Street Journal:
“The Exodus of China’s Wealthy to Japan
“Frustrations with China’s autocratic political system and economic slowdown provoke the flight, helping Tokyo’s luxury property market.”
From South Korea’s KBS World news:
“Nearly 7 Mln. S. Koreans Visited Japan in 2023”
I’m mentioning these because “since ever since” — as the kids would put it — all I’ve heard is that the Chinese, Koreans and Japanese supposedly do not like each other, and do not want to be around with each other.
But as another Quora commenter has pointed out:
“People are curious. People want to travel and see for themselves, instead of listening to the same old media again and again. If the world operates in the way that certain media predicts, we must have many more World Wars by far.”
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