MVA expects $1.4M in budget reduction

The Marianas Visitors Authority expects a massive cut of $1.4 million in its annual budget due to the drop in hotel occupancy as a result of Super Typhoon Yutu.

According to Gloria Cavanagh, Hotel Association of the Northern Mariana Islands chairwoman and MVA board member, the collection of hotel occupancy tax is expected to drop greatly and is projected to put a huge dent in MVA’s annual budget because of the number of hotels that remain closed and are still recovering from the destruction of Yutu.

“It’s no secret. MVA projected 1.4 million reductions in the collection of hotel occupancy tax. The Pacific Islands Club Saipan was closed and not receiving new reservations since Oct. 25, since the storm, and we opened on the 21st of December and we only opened with a little over 200 rooms; we are complete with 308 as of Feb. 1. You have World Resort that’s still closed and you have Coral Ocean Point Golf Club that’s still closed. …We don’t see [Coral Ocean Point] opening any time soon, maybe toward the end of the year,” she said.

“March is very soft for the Korean market and so it’s just lower, lower numbers than last year, so [HANMI] is anticipating a huge drop, as is everyone in the government,” she added.

Cavanagh said the drop in collection of hotel occupancy tax would result in fewer promotions to bring in tourists and this is something that MVA fears but HANMI and MVA plan to be more proactive.

“It means less money that is put into promotions. It’s a little scary… that’s why the hotel association and MVA met and we’re trying to be a little bit proactive in re-introducing the destination to our three markets which are Korea, China, and Japan and, with Japan coming back on board…we need to show that our destination has recovered. We really need to be proactive in promoting our destination because, for a lot of people, the last thing they saw was the devastation from Yutu but we need to show them that our destination is stronger than ever,” she said.

Cavangh said MVA will be proactive through a concert that is geared toward CNMI promotion.

“MVA is planning a concert to join together with the Flame Tree Festival. …Right now, with the concert that they’re planning for April during the Flame Tree Festival, they’re looking at the tourism partners actually helping as far as defraying some costs…We know that we need to re-introduce Saipan and the CNMI as recovered and this is a big way of doing that. But because of budget restraints, we need to do our part as a tourism partner,” she said.