$108M in economic loss averted, says MVA

The decision to delay federalizing local labor and immigration has prevented the potential economic loss of $108 million to the CNMI, according to Marianas Visitors Authority managing director Perry Tenorio.

Expressing elation over the federal government’s move, Tenorio said the islands could still expect the entry this year of some 40,000 tourists from China and Russia, the two markets that may be excluded in the visa waiver program under the federalization law.

He said the 40,000 tourists reflect 95 percent of the total arrivals from the two destinations—a significant loss for the islands had the June 1 enforcement pushed through.

“Absent federalization, we projected an increase of 1.5 percent from Russia [for a total of] 9,000 Russian visitors this year and 31,000 from the China market,” Tenorio told Saipan Tribune.

He conceded, though, that the projection could go down if airlines suspend flights from China.

The June 1 implementation of federalization was also supposed to restrict the entry of Chinese and Russian visitors to the CNMI. The interim rules state that security protocols must first be established for both markets. It has been projected that it would take the Department of Homeland Security 12 to 18 months before it can establish the needed security protocols.

MVA records show that the CNMI welcomed about 27,000 Chinese visitors and about 7,000 Russians in 2008. In 2009, MVA hopes to bring in 31,000 Chinese and 9,000 Russians.

“Between now and November, MVA will continue to promote and use this opportunity to increase visitors from these two source markets,” Tenorio said, adding that MVA’s Marianas Tourism Task Force will closely work with DHS to seek “assistance” to continue travels from these markets.

The extension, he added, will also be used by the task force to ensure the establishment of security protocols until November to prevent an interruption in Chinese and Russian travel to the islands.

When asked if MVA is ready for federalization, Tenorio said, “This is really beyond us and hopefully Congressman [Gregorio] Sablan and Guam Congresswoman Madeleine Bordallo would continue to encourage DHS to somehow provide us assistance.”

Intensify promotions

MVA, due to budget constraints and the projected impact of federalization, had reduced the promotions budget for China and Russia. It now plans to restore those amounts in its budget.

Initially, the agency invested $460,000 in promotional activities for China; this was reduced to approximately $250,000. The Russia market’s budget was adjusted from less than $100,000 to $70,000.

Despite these reductions, Tenorio said the agency didn’t stop any specific promotional programs for both markets.

The budgets for Japan and Korea remain intact, which are allocated $1.9 million and $1 million respectively.

MVA is allocated $6.7 million for Fiscal Year 2009, more than a million dollars over the continuing resolution level of $5.6 million.

“Our recommendation [to the MVA board] is to see if we can move some of the money that hasn’t been distributed yet to these two source markets. We need to add or restore between now and Nov. 28,” Tenorio said.