THE Commonwealth Ports Authority is seeking the CNMI Senate’s support for CPA’s request to the U.S. Department of Transportation to exempt the Commonwealth from the limitation of flights from China to U.S.
On Aug. 11, 2023, USDOT issued an order limiting the number of weekly round-trip passenger flights between the U.S. and China to 24 effective Oct. 29, 2023.
In her letter to Senate President Edith Deleon Guerrero, CPA Board of Directors Chairwoman Kimberlyn King-Hinds explained the importance of re-establishing the Chinese tourism market, which she said, “cannot be understated.”
King-Hinds said before the onset of the Covid-19 pandemic, Chinese tourists accounted for a substantial portion, approximately 39% of all visitors to the CNMI.
She said tourists from China significantly contributed to on-island expenditures and ranked third in terms of spending. On average, she added, a Chinese tourist spent $681.40 when visiting the CNMI.
In 2019, 185,526 visitors from China arrived in the CNMI. Without the Chinese market, the direct economic loss for the CNMI amounts to $126.4 million, King-Hinds said.
There is also an indirect economic loss because each dollar spent by Chinese tourists generates additional economic activity, she added.
“The economic impact of losing the Chinese tourism market is substantial,” she reiterated. “This loss would not only affect the government’s revenue but also private companies in the CNMI, particularly those in the tourism industry. With a projected drop in hotel occupancy rates and the potential exit of some tourism-related businesses, the consequences of losing this market would be far-reaching. Additionally, the reduced tax contributions to the government would compound the economic challenges faced by CNMI,” King-Hinds said.
‘A business decision’
Seeking a federal exemption from the USDOT’s order is a business decision, King-Hinds said in an interview Thursday during a meeting of the Hotel Association of the Northern Mariana Islands at LaoLao Bay Golf & Resort.
“Before that order was issued, there was an existing U.S.-China travel bilateral agreement that had a provision called Annex 6, which exempted Guam and the CNMI from flight frequency limitations between China and the U.S.,” King-Hinds said.
Now, USDOT’s position is that the limitations apply to the CNMI, she added.
“Our mission in CPA is to fully develop air and sea travel to and from the CNMI. We will not be doing our job if we are not working very hard to fully open…markets to develop CNMI’s fullest potential,” King-Hinds added.
Asked about the Palacios administration’s “pivot” away from the China market, she said, “We understand, and we certainly appreciate the administration’s position. However, this goes back to the autonomy of the [CPA] board… which is basing [its] decision on the economy — it’s a business decision.”
She said HANMI recently reached out to CPA and wrote a letter supporting CPA’s intent to seek exemption from the latest USDOT order on China flights.
“It’s a route that we are pursuing, and we have taken the effort to hire a D.C. subject matter expert to submit that application on behalf of CPA,” King-Hinds said.
“More flights coming in will help CPA and the entire Commonwealth,” she added.
Very sensitive
In an interview on Friday, Gov. Palacios said the China issue “is very sensitive right now so I don’t want to really push that…with the federal government.”
He added, “I always wondered why we don’t have Taiwan tourism, but I’m going to look into that. That is something we need to look at — other markets besides existing ones.”
He is also hoping that the federal government “is listening to us and becomes sympathetic to the challenges we have here.”
