Japan market on a decline

Despite the record-breaking hotel occupancy levels for the CNMI in recent months, one market that once was a dominant segment has been on a steady decline, prompting worries among tourism stakeholders in the CNMI.

The Japan market, now declared as a “crisis market,” has decreased significantly, based on the Marianas Visitors Authority’s visitor arrival records for fiscal year 2014, losing its pole position to the Korea and China markets.

Japan’s market share in visitor arrivals was already at an anemic 34.2 percent in fiscal year 2013. This further declined to 26.2 percent in fiscal year 2014, mainly because of limited air service.

“Although hoteliers are experiencing record-breaking occupancy levels, we understand that we must continue to support the Japan market in order to achieve a healthy economy,” said Hotel Association of the Northern Marianas Islands vice chair Gloria Cavanagh yesterday at the HANMI joint board meeting at the Saipan World Resort.

“Tourism is fragile, it is dependent on seasonal and stable air service,” Cavanagh added.

According to Delta Air Lines Asia Pacific managing director Jeffrey Bernier, not all Japan outbound travelers to the CNMI want low prices. Many Japanese travelers, whom he described as “very savvy,” also value luxury and the value of the hotel itself.

“Which is why I am encouraging hoteliers to invest in services…to set you apart from other competitions,” Bernier said. “Japan is a mature stable market, we just need to reinvest and reinvigorate.”

He noted that Guam remains the destination of choice for shopping for the Japan market, but the CNMI remains the destination for natural beauty.

“We face challenges here, especially among young female Japanese travelers. They want to stay at a luxury hotel and want to shop more,” Bernier said.

Challenges

AVIAREPS Marketing Garden founder and chair Michael Merner said at the Marianas Visitor’s Authority general membership meeting earlier this month that the insufficiency of hotel rooms specifically for the Japan market is a challenge for the CNMI. Merner said that Japanese tourist usually look for branded hotels.

Saipan Chamber of Commerce president Alex Sablan noted the branding of the former Palms Resort in San Roque, which will be run as a Sheraton hotel, as well as the rebranding of other hotels, will be helping out the CNMI.

Other challenges facing the Japan market are the lack of air services to the CNMI.

Bernier said they are looking into inviting low cost carriers to service the Commonwealth.

“Both inbound and outbound tourism are being looked at for the growing economy, and there is an increase destination competition and expansions of low cost carriers,” Bernier said.

Other challenges for the CNMI are the frequent suspension of Delta night flights from Narita, seasonal operations from Kansai International Airport, and limited charter flights from Nagoya, lack of seats from Guam to Saipan to attract passengers from United Airlines’ gateway cities in Japan, unstable flight services from Saipan to Tinian and Rota, and the increasing number of low-cost carriers to other short-haul destinations that are competitively priced.

Merner said a consumer survey in Japan showed that the CNMI still has deep appeal for Japanese tourists, and the best opportunities to exploit that appeal is the proposed “beautiful flower islands project,” sports branding, and securing low-cost carrier service to the CNMI.

Steven Crowdey of Delta Air Lines did note that they are looking at potential opportunities this summer out of Nagoya to Saipan.