‘Tourism making solid recovery’

Chris A. Concepcion

The CNMI’s tourism industry is making some solid strides this year, with about 125,957 arrivals so far as of June, but the Commonwealth still has a long way to go, according to Marianas Visitors Authority managing director Christopher Attao Concepcion yesterday.

In his presentation before the Senate Fiscal Affairs Committee’s hearing on MVA’s budget for fiscal year 2024, Concepcion said total arrivals in the CNMI were about 424,838 in fiscal year 2019, right before the COVID-19 pandemic. That number dropped to about 215,125 in 2020, which is a steep drop of more than 200,000. This further dropped to a staggering 5,000 in fiscal year 2021.

Starting last year, though, arrivals rose to 23,815 and the ensuing numbers are showing signs that the CNMI’s main economic driver is making positive strides in regaining lost ground, Concepcion said. He said they are expecting an additional 65,000 arrivals this July, August, and September, so for the whole year they are hoping to reach 200,000 total arrivals.

Of the total 125,000 arrivals in the first six months of this year, roughly 80% of the visitors came from Korea, while 20% is comprised of visitors from Japan, Guam, the United States, and all others. He said the CNMI only received 5,000 arrivals from Japan this fiscal year.

Since 1978, the CNMI’s highest total arrivals was in 1997, which was about 727,000.

For fiscal year of 2024, Concepcion said they expect 310,000 arrivals from Korea, 10,000 from Japan, and another 10,000 from other markets—or roughly 330,000 to 340,000 in total arrivals.

He said for Korea, they are expecting the current flights schedule to be maintained, which is 34 flights a week.

The managing director said that load factors (or how full incoming planes are) are pretty good now, but they’re expecting that to increase especially during the high season.

In light of these positive outlook for the tourism industry, MVA is proposing a budget of $12,524,928 in fiscal year 2024. MVA’s fiscal year 2023 budget is only $1,550,872.

Fiscal Affairs Committee chair Sen. Donald M. Manglona (Ind-Rota) said that Gov. Arnold I. Palacios is proposing to resume earmarking the Hotel Occupancy Tax, which is estimated at $4,584,000, to MVA.

Concepcion said for next fiscal year, with visitor arrivals picking up and federal grants given during the pandemic are running out, they fully support the governor’s reinstatement of HOT so that they can continue their mission to rebuild a vibrant tourism economy.

Concepcion agreed with Manglona that the projection for next fiscal year on visitor arrivals will result in $4.5 million HOT collections.

“That’s a very good conservative estimate. We’re thinking it’ll definitely be up and above that. Maybe 50% or more than $4.5 million,” said the managing director, adding that the projection is that arrivals will be picking up every month.

He said the last of their American Rescue Plan Act funding is covering the cost of their representative offices in Korea and Japan.

Concepcion said they do have part of the Community Development Block Grant Disaster Recovery funds, administered by the Northern Marianas Housing Corp., but this is only for very specific marketing programs.

He said they do have a small Technical Assistance Program grant that they got from the Office of Insular Affairs to upgrade their data systems.

MVA is also requesting right now to become a co-grantee of an Economic Development Administration grant from the U.S. Department of Commerce for destination enhancements. “These funds can be only be used for very specific activities and they’ve been encumbered for these purposes,” Concepcion said.

For personnel, operations, and most of their marketing efforts, they remain completely reliant on local funding at this point, he added.

Of the $1.55 million appropriated to MVA this year, they have only received from the Department of Finance $200,000 so far, he said.