CNMI closely monitoring surprise Japan recession

The Inos administration is closely monitoring economic reports out of Japan, after this key tourism market announced Monday that it has slipped into recession.

Press secretary Angel Demapan said that, while the CNMI is concerned with the situation in Japan, it is confident that its diversified portfolio—that counts South Korea, China, and Russia as its other key tourism markets—will soften the blow of a decline in tourists from Japan, which is always inevitable if a source country is in recession.

“The recent development of Japan falling into recession is a cause for concern for many countries. After all, Japan does have the third largest economy in the world. The Inos administration is closely monitoring the situation in Japan and the anticipated impact it may have on our tourism industry. While events like these are far beyond our control, this is why it is also important to have a diversified tourism industry with multiple source markets throughout Asia. Nonetheless, it appears that the Japan government is already taking steps to remedy the situation so we are hopeful that things will turn around for the betterment of the country,” said Demapan in an email to Saipan Tribune.

The Marianas Visitors Authority assured its tourism partners and the Inos administration that tourists from Japan will remain steady, at least for the next three months.

“An analysis was made by our MVA Japan office and it was noted that indicators of a sudden decline in outbound travel from Japan are not there and that not much change is expected in the next three months,” said MVA managing director Perry Tenorio in an email to Saipan Tribune.

Quoting the report from MVA Japan, Tenorio said aside from a holding pattern on tourists going to the CNMI from October to December, the weak yen and fuel prices would have a negative impact on long-haul destinations.

The report also said some business types and companies are in better shape than others, but for the first time in several years, an increasing number of companies are bringing back company trips for employees.

It added that it’s likely that consumers will spend their increased bonuses on travel about six months after receiving the bonuses this December.

The MVA Japan report also said it is very likely that employees of many domestic companies will be able to take New Year holidays as long as nine days.

“This will encourage consumers to consider overseas travel, especially to short-haul destinations,” it said.

The report also said Japan Airlines will operate two direct charter flights from Chubu Centrair International Airport on Dec. 27 and 30, respectively, to stimulate the yearend travel demands to the CNMI.

It said the aircraft will be a Boeing 737, which will increase the seat capacity to 288 seats.

In conclusion, MVA Japan said in the next the months or October-December 2014, the overall outbound travel should remain unchanged, at -21. But it is expected to increase in Micronesia (+4), Oceania (+4), and South Korea (+3).

According to the Associated Press, Japan’s economy unexpectedly slipped back into recession as housing and business investment dropped following a sales tax hike, hobbling its ability to help drive the global recovery.

The world’s third-largest economy contracted at a 1.6 percent annual pace in the July-September quarter, the government said Monday, confounding expectations that it would rebound after a big drop the quarter before.