THE Hotel Association of the Northern Mariana Islands reported 35% average occupancy rate among its 13 member hotels for April 2024, a 9% increase compared to 32% average occupancy among 11 hotels in April 2023.
A total of 25,203 of 72,848 available room nights sold during April 2024 compared to 19,821 of 62,542 available rooms sold in April 2023. The average room rate was $122.12 compared to $132.79 last April.
“The overall economy is facing a critical challenge due to the slow recovery of the tourism industry, including the hotel sector, caused by the lack of diversity in tourism market sources,” said HANMI Chairman Dennis Seo. “As we are aware, Korea is currently dominating the Marianas tourism market, while the Japanese market is showing limited recovery at this time. The Chinese market, which accoutered for 39% of the market share pre-Covid-19, is largely absent.”
“The Korean market has recovered to 70-80% of its pre-Covid-19 level, but no one knows how sustainable this market will remain,” Seo cautions. “It is now said that the domestic economy in Korea is stagnant, and consumer sentiment is deteriorating. People are cutting down on eating out and reducing discretionary spending, including travel.”
As shown in the drop of the average room rate by $10.68 compared to April 2023, ongoing competition with other beach destinations like Guam, Thailand, and the Philippines and the current exchange rate is negatively affecting both bookings and room rates in the Marianas. As the U.S. dollar continues to strengthen, Koreans are now preferring more cost-effective destinations such as Japan, Vietnam, and Thailand where the Korean won is stronger. Japanese outbound tourism is showing a similar trend of traveling more to Korea, Vietnam, Taiwan and other destinations in East Asia.
“Hotels and other travel trades partners are having to lower our prices to compete. And, the operating costs, including all materials, food, and labor costs, are rising, while the ARR of hotels is decreasing,” said Seo. “In other words, hotel productivity is decreasing, leading to a decrease or a larger loss than before in profit. It would not be a stretch to say that a majority of HANMI hotels are financially struggling. They are experiencing deficits ranging from tens of thousands to hundreds of thousands of dollars every month. We need to diversify our source markets beyond just Korea and Japan.”
Hyatt Regency Saipan — a decades-long investment in the Marianas — has announced their closure effective June 30, 2024.
“We are thankful for the efforts and initiatives made by the Marianas Visitors Authority and other government agencies in achieving the restart of Hong Kong Airlines’ operations, participation in the Marianas Seminar in Japan, and exploration of the feasibility of the Taiwan market,” said Seo. “At the same time, we know that resuming the established tourism markets, including Chinese market that we had pre-Covid-19 is the most rapid way to recover the tourism industry. The reinstatement of Annex VI should be the very first step in part of tourism industry’s recovery plan.”
Annex VI under the U.S. Department of State’s “U.S.-China Air Transport Agreement of July 9, 2007” provides a special carveout of flights for the CNMI.
Hotels included in HANMI’s monthly statistical report are Aqua Resort Club, Aquarius Beach Tower, Century Hotel, Coral Ocean Resort, Grandvrio Resort Saipan, Crowne Plaza Resort Saipan, Hyatt Regency Saipan, Kensington Hotel Saipan, LaoLao Bay Golf & Resort, Pacific Islands Club Saipan, Saipan World Resort, Surfrider Resort Hotel, and Paradiso Resort & Spa.
The Hotel Association of the Northern Mariana Islands was established in 1985 as a professional forum for the hospitality industry of the Marianas. HANMI also makes regular charitable donations to support non-profit organizations and tourism-related government projects. HANMI membership is open to all qualified hotels and other loading properties for tourists and affiliated business. Membership applications are available at www.saipanhotels.org/.
