Ron Smith talks about the state of the local economy during the Rotary Club of Saipan’s weekly meeting at the Crowne Plaza Resort on Tuesday, May 28, 2024.
A SAIPAN Chamber of Commerce board secretary and local businessman was the special guest of the Rotary Club of Saipan on May 28.
Ron Smith, founder and president of Angil Design Inc., was asked by Rotarians to summarize some of the key points made at the SCC’s economic summit held on May 16.
Smith highlighted SCC’s “Operation 500K” presentation pertaining to the goal set by the chamber, the Marianas Visitors Authority and the Hotel Association of the NMI to bring in at least 500,000 tourists a year to the CNMI.
Smith said 500,000 visitors will allow the tourism sector to “break even.”
In 2023, a total of 215,543 tourists visited the CNMI compared to 487,008 in 2019, before the Covid-19 pandemic. This year, it is projected that about 300,000 tourists will visit the islands.
Smith said Operation 500K will require seven flights from South Korea, four flights from China, and one flight from Japan daily.
Smith said a third “robust” market is needed to make Operation 500K work.
The chamber does not actually have a preference for where the market originates, he added.
“Regardless of where it’s from — we don’t really have a preference — but we need a third market, and it’s got to be a robust one. It’s got to provide us with 200K to 300K visitors per year,” he said.
At its peak years in 2016, 2017 and 2018, the China market provided over 200,000 annual visitors to the CNMI.
Smith also summarized the points made by local economist Matthew Deleon Guerrero, who presented statistics indicating that 54% of all business revenue in the CNMI came from tourist spending.
Smith said the local tourism industry is at a “critical juncture.”
“We have to have sustainable visitor numbers in order to keep the hotels open,” he said.
“We’ve already lost the Hyatt and other hotels are evaluating their continuing presence in the CNMI, at least on the performance of the properties this summer,” Smith said. “That’s going to be a defining moment for the CNMI. If they don’t have enough guests coming in to maintain their properties at a profitable point, they’re going to … depart.”
Based on the latest figures, the islands’ tourist arrivals and hotel occupancy rates are still significantly below their pre-pandemic levels.
For its part, the CNMI government has reported revenue shortfalls of $5.3 million and $4.1 million in the first and second quarters of the current fiscal year.
The administration is expected to make adjustments to its FY 2025 budget proposal to reflect the latest revenue projections.
