Damocles’ sword hangs over MVA budget; officials want budget restored

The Marianas Visitors Authority’s offshore offices will be the first to take the brunt of the impending $1.1 million cut on MVA’s budget.

MVA managing director Vicky I. Benavente issued this statement as she asked the Senate to reconsider MVA’s budget request for fiscal year 2005. The Legislature has passed a fiscal year 2005 budget resolution reducing MVA’s budget from $7 million to $5.9 million.

In a letter to Senate President Joaquin Adriano, Benavente noted that the Northern Marianas has been receiving more and more visitors for the past two years “in spite of the challenges from health, safety, and security reasons.”

She added that visitor arrival numbers are expected to further increase, with the Commonwealth receiving the Approved Destination Status from the Chinese government and with new flights being launched from Taipei, Hong Kong, and Manila.

But with the proposed budget reduction, MVA is now preparing to reduce marketing and advertising programs with its offices in Japan, Korea, Hong Kong, and China, Benavente said.

“It is unfortunate that the consequence of a reduction in advertising, marketing, and [public relations] activity will mean a lesser awareness of our destination in the travel markets, and a smaller competitive role in the global tourism industry,” she maintained.

MVA has been operating on a $7-million budget for the past six years.

However, only $5.957 million of this amount remained available to the tourism agency during the last fiscal year at least.

A total of $858,200 was deducted from MVA’s budget after the responsibility of tourist sites maintenance had been transferred to the Department of Lands and Natural Resources.

Another $122,836 was cut from MVA’s funds pursuant to a provision in P.L 13-24 requiring each government agency to reserve two percent of its budget to help retire the government’s accumulated deficit. Also deducted was the mandatory one percent for the Office of the Public Auditor, amounting $61,418.

In September 2004, the MVA board of directors approved a $6-million budget for the agency for FY 2005.

Advertising expenses were allocated $3.72 million—or about two thirds—of the budget. Some $625,000 was put aside for advertising within the islands while the rest was allotted for promotions in the international markets.

The biggest advertising budget—$1.78 million—was given to Japan, the primary tourism market of the Northern Mariana Islands. The emerging China/Taiwan market came next with $590,731, followed by Korea with $485,000. The balance was budgeted for the United States, Guam, and other markets.

MVA budgeted $1.53 million for personnel expenses. The remaining $709,491 will go to other operational expenses.