Hotel Association of the NMI officers and members pose for a group photo after their general membership meeting at Grandvrio on Thursday, May 23.
Hotel Association of the NMI Chair Dennis Seo, left, and board member Sachiko Gerrard, center, listen as Vice Chair Ivan Quichocho talks to reporters at Grandvrio where HANMI held its general membership meeting on Thursday, May 23.
HOTELS are losing money and struggling financially, Hotel Association of the NMI Chair Dennis Seo said.
“We don’t have any members saying they are closing very soon; however, let me put it this way, all hotel members are losing money, they are struggling financially, they are losing hundreds of thousands of dollars,” said Seo, the general manager of the Pacific Islands Club.
He said even the peak summer months of July and August are not looking positive.
“We have to [implement] some measures in order to survive such very challenging circumstances,” Seo said.
In an interview on Thursday, Seo, HANMI Vice Chair Ivan Quichocho and board member Sachiko Gerrard told reporters that the “picture is not very rosy for the summer in terms of air service to the CNMI.”
“One hotel could even be losing half a million [dollars] — those are serious numbers,” said Quichocho, the general manager of Century Hotel. “We’re in critical situation,” he added.
“We are not meeting the numbers. Basically, as an association, everybody understands the hotel business, we know our members are making significant cuts already, so our membership must make some difficult decisions based on the summer volume,” Quichocho said.
“We don’t operate right here and now; we operate basically two-three months ago. If the bookings for summer are showing now, you might see some properties reacting to it already…just like airlines we forecast future bookings. If it ain’t in the books it ain’t coming, and so you have to adjust your operations based on that.”
Recently, Saipan Portopia Corp., the Japanese company that owns Hyatt Regency Saipan, announced that it will no longer operate beginning July 2024 “due to the global shifts and continued challenges impacting Saipan and its tourism sector.”
Asked whether other hotels are considering closing their doors, too, Quichocho said, “No one is out there talking openly about closing their doors. As an organization we are not talking about, ‘Hey, are you closing next week?’ — that conversation does not happen.”
For her part, Gerrard said, “We don’t want another Hyatt Regency.”
“So, we share, as much possible — we get together [and discuss] what we need as HANMI members. Plan it and speak out and reach out. And we are working closely with the Marianas Visitors Authority,” said Gerrard, the general manager of Aqua Resort Club.
Seo said during their general membership meeting Thursday at the Grandvrio Resort Saipan, they discussed the average hotel occupancy rate in April.
In a media release, HANMI reported a 35% average occupancy rate among its 13 member hotels for April 2024.
According to HANMI, hotels typically require around 70-80% hotel occupancy to stay in operation.
“There was a slight drop in the average room rate [in April 2024] by $10 something compared to April 2023 because the competition among beach destinations is getting stronger,” Seo said.
“Tourism competition is increasing in Guam and East Asia like Thailand, Vietnam and the Philippines,” he said. “There are other factors like a strong U.S. dollar, and the Koreans and the Japanese are now pretty much cost conscious when they are comparing [destinations] when they want to travel. They want to travel where the yen and won are stronger,” Seo said.
Quichocho said the CNMI is competing against Thailand and Vietnam, “and their exchange rate for the yen and won is far more favorable. To stay competitive and try to swoon them [tourists] over to our destination we have to be competitive with our room rates. As a result, overall average daily room rate across the HANMI membership has dropped.”
Quichocho said HANMI members also talked about the air service that was planned for the summer but has not materialized.
“So there’s a good chance that our air seats in 2024 for the summer period will not exceed or meet last year’s numbers — as a matter of fact, we know it won’t because last year Guam experienced [typhoon] Mawar, and a lot of those flights were diverted to Saipan…and we know that won’t be the case this year,” Quichocho said.
As for the proposed inclusion of the Philippines in the Guam-CNMI visa waiver program, Quichocho said, “Our position is we welcome all visitors — it does not matter whether it’s from the Philippines, Korea, Japan, China or U.S., as long as there’s somebody in our rooms. We welcome all markets, that is our stance on that, we welcome it. If the Philippine visa waiver can happen, please, more power — come and visit the CNMI. If it happens that will be really good news.”
Based on the latest figures, the islands’ tourist arrivals and hotel occupancy rates are still significantly below their pre-pandemic levels.
