‘At least 1K more rooms needed’

Despite the opening of a few small hotels on island, there remains a large shortage of rooms to accommodate all tourists and guests who want to visit the CNMI.
Hotel Association of Northern Mariana Islands president Nick Nishikawa estimates that the Commonwealth needs 1,000 more hotel rooms during peak seasons.

The peak season for hotels, according to the HANMI president, is from December to March. Other months are considered normal, if not low, for many of the islands’ major hotels.

“Small hotels are opening up…but still rooms are not enough. Maybe we need another 1,000 rooms in order to accommodate all our guests. We have many tourists who want to extend their stay but there’s nothing we can do about it because rooms are all reserved in advance. That’s our main challenge,” he said.

During peak seasons, HANMI member hotels post 90 to 100 percent occupancy rate; it varies from 70 to 80 percent during normal or low seasons.

In terms of room rates, Nishikawa said the amount their member hotels charge guests is reasonable. During peak season, most hotels apply a little higher rate, about up to 10 percent of the normal rate, he said. A reduced rate is enforced during normal or low season.

Combined with an attractive product to offer, these factors keep tourists coming back to the island, Nishikawa added.

He pointed out that tourists enjoy coming to the islands because of affordability of the hotel industry’s rates. Hotels cannot just impose higher rates, he said, because this may mean a reduction in potential arrivals.

“Tourists are looking at a marked rate…and in order to be competitive, we need to offer a reasonable price. That’s what we’re doing here,” he said.

The coming of the Sheraton brand in the Commonwealth, Nishikawa said, is very welcome news for HANMI. This means more promotions for the destination, resulting in increased arrivals.

Nishikawa admits that the plan of many hotels to renovate their facilities hinges on the years that remain on their land leases.

Under the law, private land leases are only up to 55 years while public land leases are up to 40 years. HANMI supports extending land leases in the CNMI by up to 75 to 99 years, as previously recommended to the Legislature.

Despite the uptick in the number of arrivals from key markets such as Japan, Korea, China, and Russia, Nishikawa says that HANMI cannot just sit back and relax.

“There’s always uncertainty [in this kind of business]. We always have our fear because unexpected things may always happen,” he said, citing the 2011 Japan tsunami and other past crises that gravely impacted the hotel and tourism industries.

The Hotel Association of the Northern Mariana Islands has 12 member hotels. It was established in 1985 as a professional forum for the hospitality industry of the NMI.