World Resort plans additional $4M investment

World Resort Saipan asked the government yesterday for more benefits under the qualifying certificate program, citing an additional $4-million investment that the hotel plans to put into its expansion program.

Kyong Won Lee, the hotel’s special project manager, told the Commonwealth Development Authority that World Resort wanted additional tax benefits over a longer period of time.

She also sought CDA’s recommendation on how the hotel should go about the process of amending its existing qualifying certificate. She asked CDA if there was a way for World Resort to simply update the information it had submitted for its previous application, rather than filing a new application, which could take at least four and a half months to process.

CDA chair Sixto Igisomar said the board of directors would review World Resort’s request and instructed management to continue soliciting necessary information from the hotel.

On Aug. 31, 2004, Gov. Juan N. Babauta signed a qualifying certificate granting World Resort total tax rebates of $4 million over a 10-year period. This was based on the hotel’s February 2004 expansion plan, which had an estimated cost of $14 million.

But in a presentation at yesterday’s CDA board meeting, World Resort general manager B.K. Park disclosed that the hotel had decided to amend the original plan to include the construction of additional facilities, for a total extra cost of $4.16 million.

The hotel is looking at building a kids club to attract the family market and a 25-meter national standard race pool to allow the hotel to host swimming competitions and possibly, athletes that would be training for 2008 Beijing Olympics, Park said.

The two projects have estimated costs of $900,000 and $910,000, respectively.

Also included in the amended plan is a $1.85 million outdoor stage, which is intended to be a venue for cultural, as well as wholesome, nighttime activities.

World Resort estimates other related expenses to reach $500,000.

Park maintained that the new facilities could bring additional revenue of over $10 million a year, once they are completed.

World Resort projected that the three facilities would result in a 1.5-percent increase in Japan arrivals, which totaled 382,000 in 2004.

A Marianas Visitors Authority survey in 2003 showed that Japanese tourists had an average spending of $496. Thus, the increase in Japan arrivals would translate to increased revenues of $2.84 million a year, Park said.

Arrivals from Korea, which numbered 68,000 in 2004, are also expected to increase by 10 percent as a result of the improvements. With Korean tourists having an average spending of $407, the World Resort project could contribute $2.77 million additional revenue to the CNMI economy, Park added.

He said the additional amenities would allow the hotel to raise its current $70 optional tour price by $50.

Taking 15 percent of the 600,000 tourists that MVA had projected would visit the CNMI in 2005, Park said the existing optional tour plan allowed the hotel to earn only up to $6.3 million. With the $50-increase, however, the hotel could realize an additional $4.5 million revenue.

“I am very confident about the projected increase in arrivals from Japan and Korea because the CNMI has not had new facilities constructed in so many years. These two markets have long been looking for new reasons to come to the CNMI,” Park said.