MVA: Hotel occupancy tax collection up in August

Hotel occupancy tax collection was higher than what the Marianas Visitors Authority projected for August, according to MVA managing director Chris Concepcion.

“We want to acknowledge the increase of $324,105 in hotel occupancy tax for August. This means the Department of Finance is beefing up their enforcement efforts,” he said. “We are here to continue to support them from our end to make sure our collection efforts are aggressive and more fruitful because we do suspect that there still guest houses [and] little apartments that are probably under the radar.”

The high occupancy level of hotels on island pushed the proliferation of bed-and-breakfast facilities throughout Saipan.

“We like the concept because it’s very popular all over the world. The only thing that we have an issue with the B&Bs is the non-payment of the hotel occupancy tax by the customers. By law, they are required to charge customers 15 percent on top of the room rate,” Concepcion said.

MVA board chair Gloria Cavanagh said the enforcement of the hotel occupancy tax will help MVA recover from its budget cut.

“We lost a total of $1.6 million as a budget cut in the beginning of the year so the money we get from the hotel occupancy tax from hotels, B&Bs, and guest houses will hopefully help MVA recover,” she said.

The Legislature cut $1.6 million from MVA’s budget for fiscal year 2018, reallocating the money to the mayors of Saipan, Tinian and Rota and to the Public School System’s acquisition of fire trucks, among others.

“We are concerned about it because that is a big chunk of budget that we can’t spend on marketing or sports tourism or other events that we plan in the CNMI. We definitely have to cut programs,” Concepcion said.

Cavanagh said the MVA welcomes private houses and apartments turned into B&Bs to accommodate people. But they have to pay the hotel occupancy tax.

The Zoning board has the same goal of identifying businesses that fall under the category of hotels.

At the recent public hearing, Zoning administrator Therese T. Ogumoro said there are only 63 registered B&B businesses with the board, yet there are a total of 264 places on Saipan registered on the Airbnb website.

“The reality is, majority of them have not registered [with Zoning] but our enforcement is still continuing inspections. One investigation made us discover eight out 10 of apartment owners had no knowledge that their apartments is on Airbnb and we are told that most likely it is the tenants that list them on Airbnb,” Ogumorro said.

According to Concepcion, 80 percent of hotel occupancy tax collected goes to MVA.

“MVA’s funding is from the hotel occupancy tax so if they don’t pay the tax, we lose out. That’s why our position is, we like the concept and we think there is a need for it because there are not a lot of hotel rooms but they should comply with the tax laws and it’s only fair,” he said.