MVA cuts budget for Russia, China markets

The Marianas Visitors Authority slashed its promotional and advertising budget for both its Russia and China markets in anticipation of the federal takeover of local labor and immigration systems this coming June.

Perry Tenorio, the agency’s managing director, disclosed that nearly half of funds appropriated for China this fiscal year was reduced as a result of across-the-board slash on all agency’s budget, including essential departments like MVA.

Due to a downturn in revenue and collection, the governor ordered a 5.5 percent reduction on all agencies’ budget.

For MVA, Tenorio said, this means an adjustment of nearly $600,000 from the $5.9 million under the continuing resolution to $5.6 million, which now reflects the 5.5 percent cut.

Tenorio revealed that for FY 2009, the agency cut by half the advertising fund for China activities—from $460,000 to only $248,000. For Russia, the agency is looking into cutting the existing $70,000 annual promotional budget, which is almost the same funding provided last year.

CNMI has no offshore offices in both markets and funds are used for advertising activities intended for the two destinations.

He said these promotional activities may stop prior to the implementation of federalization, depending on the decision of the federal government.

“We will continue the promotional activities in China and Russia up until the implementation of federalization on June 1st. We just have to see if there’s any decision of DHS [Department of Homeland Security] to delay implementation and possibly work with another six months,” he said.

Although the federal government will still allow entry of these tourists provided they have valid U.S. visas, Tenorio admitted that the “process is never that easy.”

He said MVA also made some adjustments to staffing where only two key positions are allowed to be replaced: the chief accountant and the agency’s general manager.

Despite the budget constraints, the managing director said they did not enforce a reduction and layoff of manpower. MVA is permitted to have 36 full-time employees.

“With this new advisement on budget, technically we need to cut down $582,000 from our operating funds…and we took it from those areas,” he told Saipan Tribune Wednesday.

He assured employees their job security through the end of the fiscal year, which is Sept. 30, 2009.

“We did not reduce the number of our personnel and we did not cut their salary. …We’re still trying to maintain our staffing pattern until end of FY 2009,” he said, adding that MVA will not add new personnel as a cost-saving effort.

The managing director admitted that the reduced advertising amount is “significant.”

However, he said the decision is also in consideration of the pending federalization in June where its entry visa program will no longer applicable.

In 2008, the CNMI welcomed 27,000 Chinese visitors and about 7,000 Russian tourists. The figures represent 90 percent of the total visitors arrival on island from January to December last year.

Anticipated economic loss from the two markets is $109 million.