Why is the Japan market important?

The dwindling Japanese tourism market has had its day in Commonwealth tourism and industry partners should just accept that and move on to pursue other, more promising markets. At least that’s the prevailing opinion of people who do not understand how important the Japanese market is to the CNMI’s tourism industry.

The thing is, the CNMI, like Guam, is an American territory that abides by and implements American immigration laws. Of all the potential markets in the region that could be attracted to come to the CNMI, only Japanese and Korean citizens can enter the CNMI on the strength of only their passports.

A Japanese or Korean citizen can enter the CNMI carrying only their passports. That’s because these countries are under the Visa Waiver Program of the United States. All other countries in the region need to secure tourist visas at a U.S. Embassy in their home countries to be able to visit the U.S. or its territories. That applies to Filipinos. The same rule applies to Chinese and Russian nationals who visit the U.S. mainland.

In the CNMI, however, Chinese and Russian tourists can enter by the planeload under what is called a parole program. A parole program is actually intended to evaluate each and every visitor before granting one; it is supposed to be implemented on a case-by-case basis and only to be granted in specific situations that warrant it. But that is not happening here. In the CNMI, planeloads and planeloads of Chinese nationals are being granted parole authority to be able to enter the CNMI. So much so that Chinese visitors totaled 73,426 to date. South Koreans number 107,051 during the same period. Japanese visitors? Only a little over 18,000.

The same situation is faced by Russian tourists, who also enter the CNMI under the parole authority or they have to secure tourist visas, called B1-B2, from a U.S. Embassy in their own country.

The problem with parole authority is that it relies on the discretion of the U.S. Department of Homeland Security. That means power that could be taken away, anytime. And in the current anti-immigrant climate in Washington, D.C. and the stance of the Trump administration, this parole authority can be revoked. That means someone in Washington, D.C. can decide to stop this anytime. There go the Chinese tourists.

The Commonwealth tourism industry, the only industry propelling its economy, is a tripod. It stands on three legs: the Japanese market, the Korean market, and the Chinese market. Take away one leg and the entire structure falls. So holding on to the Japanese market is not merely about keeping the CNMI’s tourism basket diverse. It is ensuring that the CNMI will survive even if it were to lose the China market for whatever reason.

The Marianas Visitors Authority recognizes the importance of the Japanese market to the CNMI. According to MVA, Japan is considered one of the pillars of tourism in the CNMI. Japan first invested on Saipan over 40 years ago. It was the Japanese who introduced the beach resort tourism concept as well as “planeloads of tourists” to enjoy the various sights of the island.

Today, Japan remains the third largest economy in the world. It is only three hours away by plane from the CNMI. Despite being so close to Saipan and the fact that Japanese tourists could enter the CNMI visa-free, the Japanese tourist market has not been doing well lately.

The Japanese arrivals for 2016 come in at 62,120. The peak of Japanese tourism was back in 1997, with 450,190 Japanese tourists out of the 726,690 visitors arriving for the year. In a span of 19 years, the Japanese market has plunged by massive 625 percent.

“As you can see from those numbers the Japan market is not what it used to be,” said MVA managing director Chris Concepcion. “To be fair, the stagnant Japanese economy and fluctuating yen rate has been a major factor in limiting outbound travel from Japan.”

According to Concepcion, there are 16 million Japanese who travel overseas annually. The top tourist markets for the CNMI—China and Korea—had a total of 115 million and 22 million travelers in 2016 and only a small slice of them found their way to the Marianas.

MVA pushes for Japanese tourist market resurgence

Japan is considered by the MVA as its third largest market. Compared to Chinese and Korean arrivals, coming in for 2016 at 206,538 and 200,875 arrivals respectively, Japanese arrivals seem tiny to be even considered a third target market.

“The MVA will be spending most of our offshore budget this fiscal year in Japan because we know how important this market is for the future of the CNMI,” said Concepcion.

MVA’s goal is to have 30 percent Chinese visitors, 30 percent Korean visitors, 30 percent Japanese visitors, and 10 percent from other countries.

“There is room for improvement and we are confident our new representative office in Japan will do great work to stem the drop in arrivals,” said Concepcion. “We are working closely with all airlines to launch additional flights to the Marianas, with a focus on unserved cities for now since we have daily service from Tokyo and Narita already. We’re confident we’ll have additional service from Japan in the coming months.”

In 2016, Japanese arrivals comprised only 12.39 percent of total arrivals for the year, while China was at 41.18 percent and Korea was at 40.06 percent.

Though respectable, MVA still prefers a larger presence of the Japanese market. MVA shared with Saipan Tribune that although the Chinese market is an emerging, extremely massive market, Chinese tourists solely rely on the visa waiver program to enter the country without securing a type of visa.

“This is an extremely valuable asset that we must protect for our economic stability. But at the end of the day we must prevent ourselves from being reliant on any single source market,” said Concepcion.

If for some reason the U.S. government decides to put a stop to the visa waiver program, that ultimately prevents the Chinese tourists from entering the CNMI and, considering that China comprises more than 40 percent of total tourist arrivals, the CNMI would be left to rely mainly on the Korean and Japanese market, which would certainly spell disaster for the islands’ economy.

MVA is well aware of that fact and has since beefed up efforts to promote the CNMI in Japan, focusing mainly on cities that do not have direct access to flights to the Marianas.

“For better or for worse Japan shall always remain a key market for the CNMI because of its close proximity and because of [Japan and the CNMI’s] close relations and shared history,” said Concepcion.