Bleak years ahead for big hotels, car rentals

Major hotels and car rental firms anticipate the beginning of “dim” years following the expected loss of Russia and China markets with the federalization of CNMI immigration starting June 1.

Public Law 110-29 sets up a Guam-CNMI visa waiver program that initially will not include visitors from China and Russia. The Department of Homeland Security said it needs 12 to 18 months to assess and then set up the necessary security protocols for the two markets.

Pacific Islands Club director of sales and marketing Kanae Quinn said the CNMI doesn’t have the luxury of time and the impasse will have a devastating impact on the islands and its people.

“Waiting 12 to 18 months in this depressed economy will [mean] further job losses, business closures, and an exodus of many resident and nonresidents seeking alternative places to work and care for their families,” said Quinn in an e-mail interview.

She said the exclusion of the Russia and China markets from the Guam-CNMI only visa waiver program will spell disaster for the local economy.

“The Russian market has been the ‘shining star’ in the midst of a global downtrend in tourism for the CNMI, as their high spending patterns reflect a positive influence on the local economy,” she said.

Since 1996, PIC has continually worked to develop the Russian market through several visits to Russia for seminars, trade shows, sales calls, advertising, and promotional activities. PIC, Quinn said, has also incorporated the annual celebration of the festive Russian Orthodox Christmas and New Year parties in January 2003 and even hired 14 Russian staff and interns.

“The aggregate efforts and monies invested by PIC and other hotels, tour operators, and [the Marianas Visitors Authority] are reflected in the 23 percent market share that our hotel enjoys today,” she said, adding that the loss of the Russian markets cannot simply be compensated by additional Japanese and Korean tourists, especially since flights are decreasing from the two countries.

Next month, Northwest will suspend its Osaka-Saipan flight while Asiana Airline’s daily daytime flight will be reduced to four times weekly effective tomorrow, Feb. 6.

Quinn also believes that Asiana Airlines’ considerable investment in the CNMI with their flights from Korea and Kansai and the Laolao Bay Golf Resort project will further be impacted by the decrease in Russian visitors, 95 percent of whom travel to Saipan via Seoul.

Quinn said the substantial time, money, and efforts devoted to cultivating the Russian market over six years will simply fizzle out once federalization takes effect.

Under the visa waiver program, competitive destinations like Thailand and Vietnam are benefiting from the “visa upon entry” system as Russian arrivals have grown by 150 percent over the last few years.

For Hyatt Regency Saipan general manager Nick K. Nishikawa, the loss of Russian guests will mean cutting 10 percent of the overall hotel revenue, which translates to about $1.5 million in annual loss.

Coupled with the threat of losing nonresident employees, Nikishawa said he cannot imagine operating the facility without the capable staff who continue to offer quality services to tourists and guests.

“We have about 130 contractual nonresident staffers who may lose their jobs. I don’t think Saipan has enough local staff for our manpower needs. We should always remember that these tourists—Japanese, Russian, Koreans, and Chinese—they come back to the island not only because of the perfect views but they are also satisfied with how our hotel staff are serving them,” he told Saipan Tribune.

Nishikawa disclosed that over a hundred Russians are accommodated by Hyatt on a daily basis,.

This significant number, he said, spend and stay on island from 10 days to two weeks.

“Like other hotels, Russian guests are very important for us. Ten percent of the hotel revenue comes from the Russian market. Their usually long stay on island means a lot to every hotel. If we will lose them, Hyatt will be losing about $1.5 million annually,” the manager said.

Car rental firms stationed at Francisco S. Ada-Saipan International Airport yesterday expressed “worry” over the effects of the federalization law that they say promises only “uncertainties” for CNMI businesses.

Citing their already slow operations, they believe that overall performance in the years ahead will be dim for the car rental industry.

Alamo National Car Rental’s Mary Ann Deleon said their company is anticipating a significant “loss” once Russian tourists are barred from entering the CNMI.

“We’re banking mostly on Japanese and Russian tourists,” she told Saipan Tribune, describing their Russian records “a lot.”

She, however, declined to give figures and estimates.

Although most Russians rent “bigger sized cars” like Mustangs and Expeditions, a staff of Avis Rent-a-Car said their company will also feel the effect of the markets’ exclusion from the visa waiver program because they also have Chinese and Russian customers.

Other car rentals checked by Saipan Tribune yesterday were Toyota Rent-a-Car and Hertz Car Rental.