More tourists but less profit

The increase in tourist arrivals last month translated into more occupied hotel rooms, but did not necessarily mean skyrocketing revenues for hotels.

According to data from the Hotel Association of the Northern Mariana Islands, Saipan hotels posted an average room occupancy rate of 76.93 percent in June 2004. It was the highest figure registered for the same month since 1997, when Japan was hit by the Asian economic crisis and the downward trend started in the CNMI tourism industry.

Last month’s figure also showed an over 25 percent increase, as compared with the 49.86 percent average registered in the same month last year.

This rate reflects the phenomenal growth registered by tourist arrivals last month. The Marianas Visitors Authority announced earlier this week that the CNMI received 45,714 visitors last June, a 67.52 percent increase from the 27,288 that arrived in the same period in 2003.

Such a comparison, however, may be deceptive, as the occurrence of the SARS outbreak and the Iraq war resulted in an extremely low base rate for June 2003.

Still, HANMI statistics showed that, although Saipan hotels are being filled up, they continue to charge low rates for their rooms.

Hotel room prices averaged only $72.99 last month—a measly $2.38 increase from the $70.61 posted in June 2003.

Further, the average room rate was $128.68 in June 1997 before it plunged to $107.87 the following year. Room price continued to fall until it reached the six-year low in June 2003.

While he admitted that price reduction is not a healthy business practice, HANMI president Ron Sablan said hotels are forced to do so in order to attract guests.

He added that low rates also tend to stay awhile, as hotels cannot change their prices too frequently or at the slightest indication of improvement in the industry.

HANMI statistics represents over 2,500 rooms in 14 Saipan hotels—Hyatt Regency Saipan, Hotel Nikko Saipan, Dai-Ichi Hotel, Pacific Islands Club, World Resort Saipan, Saipan Grand Hotel, Marianas Resort Hotel, Aqua Resort Club, Aquarius Beach Tower, Coral Ocean Point, Century Hotel, Chalan Kanoa Beach Club, Saipan Ocean View Hotel, and Pacific Gardenia Hotel.

The numbers do not include rooms at small hotels and the Hafa Adai Beach Hotel, which pulled out from HANMI in March.