Visitor industry sees acute decline in the last decade

Visitor arrivals to the Commonwealth have dropped by nearly half for fiscal year 2008 from the all time high in 1997, records show.

In 2008, the CNMI saw a total of 396,497 visitors—a 45 percent decrease from 1997’s total of 726,690 visitors.

But there is a bright spot. Tourism numbers increased from fiscal year 2007 to fiscal year 2008—albeit by less that 1 percent. And numbers have jumped exponentially since 1978, when only 86,708—all from Japan or the United States—visited the CNMI.

“Beginning in the late 1980s, the Commonwealth’s visitor industry experienced a decade of phenomenal growth. Grand openings of new hotels, fueled by Japanese and Korean investment, were a regular occurrence during the decade,” said Marianas Visitors Authority’s managing director Perry Tenorio said in his declaration supporting the governor’s lawsuit against federalization.

The year 1997 was a good one for tourism in the CNMI. Record numbers of Japanese and Korean tourist visited the Commonwealth, but the following year overall numbers fell by 200,000.

“The bursting of the Japanese ‘bubble’ economy in the mid 1990s, followed by the Asian economic crisis in both Japan and Korea, resulted in a sharp reduction in the number of tourists from those countries,” Tenorio said, adding that the 9/11 attacks and SARS crisis affected visitor numbers this decade.

But the industry was showing signs of re-growth in 2005 when 529,557 people came to the Commonwealth, Tenorio noted, although the re-growth was short-lived.

“New hotel investments had already been made, when Japan Airlines decided abruptly to cancel its direct air service to the Commonwealth,” he said. “This pullout presented one of the most difficult challenges the industry has ever faced. In the same year, Continental Airlines terminated its service to the Commonwealth from Hong Kong and Taiwan, two competitive markets in which the Commonwealth had only limited marketing dollars to spend.”

Tenorio notes the recent growth of the Russian and Chinese markets, two markets that might be affected by provisions in the new immigration laws taking effect June 1.

According to a semiannual regulatory plan issued by the U.S. Department of Homeland Security in November, visitors from China and Russia “cannot, at this time, seek admission under the Guam-CNMI Visa Waiver Program due to security concerns.”

Since 2006, the first year for Russian tourists to visit the Commonwealth, numbers have jumped nearly 300 percent to 6,178 for fiscal year 2008. Russian visitors tend to stay for longer periods of time than Japanese and Korean visitors—often for two weeks.

The China market also has grown tremendously in the last decade from 2,487 in 1997 to more than 10 times that in 2008 to 31,095.

“We believe that the Commonwealth’s experience with both of these markets demonstrates that a carefully controlled visa waiver system can be implemented without any increased national security risk,” Tenorio wrote.