‘Stable air service to drive economic recovery in 2012’

While many elected officials believe legalizing casino gambling on Saipan and further cost-cutting will be the ones to immediately stem the local financial crisis, Tan Holdings president Jerry Tan said on Saturday that the “key” to the CNMI’s economic recovery is boosting airline seats by, among other things, launching Saipan Air which is seen to increase arrivals by 22 percent in 2012 alone and by 97 percent in 2015.

Tan was the keynote speaker at the Saipan Chamber of Commerce’s 2012 board of directors’ installation dinner.

His presentation centered on a private sector-driven recovery, optimism, and belief in the CNMI and its people, not losing track of the only industry that fuels growth which is tourism, and Tan Holdings’ launching of the CNMI’s first local airline called Saipan Air.

Tan Holdings is the parent company of Saipan Tribune.

Saipan Air’s inaugural flight from the CNMI’s main tourism market of Japan will be on July 1, 2012.

It will use two Boeing 737 aircraft and will initially focus on key Japanese airports of Narita, Nagoya, and Osaka.

Tan, in his presentation, said three new flights a year from the said key Japanese markets will inject $100 million into the local economy, with each flight annually equating to 50,000 tourists.

With each tourist spending an average of $667, their on-island expenditure could reach $33 million a year.

Tan said Saipan Air’s operations will help boost arrivals to the CNMI from 369,012 in 2011 to 450,226 or some 22 percent.

In three years or by 2015, arrivals to the CNMI could go up by 97 percent to 728,211 with Saipan Air’s help.

Saipan Chamber of Commerce president Douglas Brennan, executive director Richard Pierce, 2011 Chamber Businessperson of the Year Jim Arenovski, and other members rallied behind Tan’s “Believe in CNMI” campaign which embraces tourism as the islands’ only major industry.

“We’ve got to believe in our strength. I believe in the CNMI. I hope you also believe in the CNMI… I do believe this is the beginning of our recovery,” Tan said as he wrapped up his presentation that earned a standing ovation among members of the audience.

A former Marianas Visitors Authority board member, Tan said the CNMI has the best product to offer tourists who, for decades, have loved the CNMI for its clean air, beautiful weather, stunning beaches, and beautiful sunrises and sunsets, among other things.

“They’re not coming anymore. But it’s not that they don’t like our islands,” Tan said.

He said it was because there were limited flights to the islands, along with factors beyond the CNMI’s control.

The CNMI also had to live through a “perfect storm” or a combination of the negative impacts of the garment industry’s departure, uncertainties caused by the federalization of local immigration, and the withdrawal of Japan Airlines.

“Any one of the three has a huge economic impact; experiencing them all at the same time (is too much),” he said. The triple disaster in Japan in March 2011 added to the CNMI’s woes.

Arrivals from the CNMI’s main market of Japan dropped by 65 percent, from 450,190 in 1997 to 156,131.

The CNMI’s overall arrivals fell by 50 percent or from 726,690 in 1998 to 369,012 in 2011.

Businessmen shared Tan’s optimism that the additional flights this year will be the beginning of economic recovery for the CNMI.

But Tan said Tan Holdings boosting tourism cannot be done by one entity alone, and “everyone has a role to play.”

The government, he said, has to fund the Marianas Visitors Authority’s marketing program.

He is proposing that businesses adopt a tourist site by helping to maintain and clean them up instead of depending only on the financially-challenged government.

Tan said a friend of his from Hong Kong has been impressed with Saipan motorists who give way to tourists crossing the street. That Hong Kong businessman is now also trying to do the same thing in Hong Kong. Tan said small things like this are not lost on tourists and foreign investors.

“Imagine all 55,000 people doing a good thing for tourism,” said Tan.

After the installation dinner, other Chamber members had only praises for Tan’s campaign to start the CNMI’s economic recovery, which some businessmen said is a lot more realistic than what many CNMI government officials offer especially during an election year.

Eric Plinske, one of the newly-installed 2012 Chamber board directors, said Tan’s presentation reminded the CNMI of things that are being taken for granted, including tourism as a whole.

“It’s going to be an easy choice who’s executive of the year for 2012 if this takes off. It will be a simple vote. I do see it (recovery), I’m very pleased to see the optimism. I think this is a good year,” he said, adding that the “momentum” is there for an economy recovery.

But the CNMI’s budget to market the islands has been on a decline, despite the fact that it is the only industry that the Commonwealth has.

Tan said the government has to realize that funding MVA is an “investment,” not expenditure.

The 2003 Chamber Businessperson of the Year also said the CNMI cannot continue to cut costs. It needs to do something to raise revenues.

Tan said many businesses in the CNMI have been creative, aggressive. and proactive in initiating their own campaigns not only to make profit but to improve the CNMI’s tourism industry.

In his PowerPoint presentation, he showed photos of some of these businesses that have become a standout from the rest despite the financial challenges.

These include “I Love Saipan” on Beach Road-Garapan, Laolao Bay Golf & Resort, World Resort Saipan, Sandy Beach Homes, Joeten in Kagman, Marfega Building near the Saipan airport, Sasha Co. Ltd. building owned by Russian investors along Beach Road, J&G/Micronesian Brokers Inc. for a warehouse construction in Puerto Rico, Marianas Business Plaza and its 360 Revolving Restaurant which is the only one of its kind in the Marianas, TSL Plaza which Tan Holdings owns, Tan’s favorite project TSL Sports Complex in Gualo Rai, and Saipan Grand Hotel’s 18-month renovation.

Businessmen are also optimistic about the impact of Korean firm E-Land’s purchase of Pacific Islands Club-Saipan and Palms Resort Saipan. E-Land, as well as PIC and UMDA’s Palms Resort, is expected to make a formal announcement soon.

Sources said at least for PIC, it was only a stock purchase. The management of the hotel will still remain with Ken Corp.