THE Marianas Visitors Authority’s revenue went down by 56% in fiscal year 2020 with the onset of the global Covid-19 pandemic, according to an independent audit report conducted by Burger, Comer, Magliari Certified Public Accountants.
The report was submitted to the Office of the Public Auditor.
MVA’s revenues in FY 2021 and 2022 — when there were no or very few tourists visiting the islands because of Covid-19 — are anticipated to indicate a more drastic decline.
From $12.3 million in FY 2019, MVA’s revenue in FY 2020 went down to $6.9 million.
MVA’s sources of revenue are hotel and container tax entitlements, grant and in-kind contributions, program revenues and other income like royalty and memorial maintenance fees. Program revenues are those directly generated by an MVA function or activity. These include membership dues, tour guide certification, special events fees that MVA charged for specific events, and contributions from the private sector in support of MVA programs.
Likewise, MVA’s expenditures drastically decreased in FY 2020. From $11.2 million, the tourism agency’s expenses went down to $6.4 million, a decrease by $4.8 million or over 42%.
According to the audit report, the MVA funds available in FY 2020 were spent on destination enhancement projects, marketing, support to other government agencies and community programs.
The report said the Covid-19 pandemic put the tourism industry — the islands’ only industry — on a standstill.
“This caused a negative financial impact in the CNMI’s economy especially to MVA,” the report said noting that visitor arrivals for FY 2020 decreased by 209,740 compared to FY 2019’s 424,858 visitor arrivals.
This decrease resulted in loss of jobs, loss of revenue for the central government and hotel occupancy tax for MVA’s operations and marketing, the report stated.
At the governmental fund level, the report said MVA’s fund balance in fiscal year 2020 decreased by $1,492,898 due to the non-arrival of tourists and the non-remittance of MVA’s share of the hotel and occupancy tax.
According to the report, the CNMI’s tourism industry 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.”
