Previous Story
Hotel occupancy drops to 19% in 1 week
|
Posted on Mar 13 2020
The CNMI’s hotel occupancy rate dropped drastically in just one week due to flight cancellations as a result of the COVID-19 outbreak.
During a CNMI Department of Labor workforce resource fair last Wednesday, guest speaker Gloria Cavanagh, president of the Hotel Association of the Northern Marianas, informed attendees that the hotel occupancy rate is now down to 19.3% from 23% just five days prior.
“With continued cancellations in the Korean market and now the Japan market, the numbers are expected to further plunge,” she said.
In her presentation, Cavanagh explained that for the Japan market, HANMI projects 6,243 arrivals in March. However, even if 100% of these visitors arrived, this would result in a hotel occupancy rate of 36% only.
“It is actually unreasonable to think that we are going to have 100%,” she said.
Cavanagh added that tourism industry has already lost $50.5 million or more in gross revenue due to the continued cancellations of flights in light of the COVID-19 outbreak. This means a $92.5 million loss in on-island expenditures, an $11.5 million loss in gross revenue tax collections, and a $3.7 million loss in hotel occupancy tax collections.
Cavanagh also shared the cost-cutting measures that HANMI hotels are implementing in response to the downward trend in tourist arrivals.
She said some hotels are closing towers, wings or category rooms; some are reducing food and beverage operations, including restaurants; some are shutting down amenities such as swimming pools and water parks; most have reduced work hours; some are mandating employees to take paid leave; terminating contracts with manpower agencies; and others are asking employees to take an extended leave without pay.
Fortunately, participating HANMI hotels have not laid off employees yet. Cavanagh said they have been prolonging layoffs but with the light at the end of the tunnel being at a distance, this could happen soon.
“It’s going to get worse before it gets better,” she said.
