NMI faces $65M economic impact in 2009

The Marianas Visitors Authority projects that the CNMI will lose over $65 million in direct and indirect economic impact this year if the continuing downward spiral of Korean arrivals do not improve.

MVA managing director Perry Tenorio disclosed this yesterday to Saipan Tribune, saying the projection is based on only 90,000 tourists from Korea visiting the CNMI this year, compared to last year’s 116,000 arrivals. It is also based on the general number of air seats available for the Korean market this year.

“We’re looking at $15 million plus indirect impact and over $50 million direct effect to the CNMI if this trend continues,” he said.

Tenorio said that MVA is saddened by the suspension of four flights from Seoul but added that the situation is understandable.

“Times are tough. We’ve seen growth in Japan but we’ve also seen a decrease in total arrivals from Korea. These are mainly due to the global economic crisis and the fluctuation of exchange rates…and we can understand that. We’re still fortunate that Asiana remains committed to fly in the CNMI,” he said.

Last month, Tenorio said, arrivals from Korea posted a significant decline of 20 percent. Months before that, a significant reduction in air seats was also noted in the market.

However, Tenorio remains optimistic on Asiana’s commitment to do business with the CNMI. The official said his agency is constantly communicating with the Legislature and is open to offer assistance and incentives to loyal carriers.

Last year, the CNMI terminated its airline incentive program after funds were exhausted.

“A constant dialogue with the Legislature is needed in order for us to help our partners become profitable. Airline is the lifeblood of the CNMI and we need to take care of them,” he said.

Korea posted its fourth consecutive month of loss with 25 percent fewer arrivals compared to February last year, which has 8,305 visitors. Its air seats also dropped 14 percent.

Recently, the Korean won fell 25.7 percent against the dollar, becoming one of the world’s worst performing currencies.

MVA earlier disclosed that Koreans’ spending on overseas travel sharply declined due to a weaker won and the economic slump. Their spending amounted to $12.6 billion in 2008, down 25.4 percent from the previous year.