House eyes CIP money to augment MVA funds

The House Ways and Means Committee is looking at the possibility of tapping the Capital Improvement Projects fund to augment the limited budget of the Marianas Visitors Authority for its promotional campaign in Fiscal 2000.

MVA met with the committee members last week to seek an additional $1.75 million for its advertising campaign after the Office of Budget and Management has pegged its budget at $5.88 million for next fiscal year.

Rep. Karl T. Reyes said the $1.75 million can be taken from the $8 million Garapan Beautification Project included in the planned $60 million bond float for CIP this year.

“We cannot treat the MVA marketing campaign as an ordinary budget item because the benefit from the project will be seen two to three years from now,” said Reyes, adding that the Legislature understands the importance of promoting the CNMI to entice more tourists to come here.

However, if the funding will come from the proceeds of the bond float, Reyes said MVA would have to help in paying the amount.

MVA Managing Director Perry Tenorio has appealed to the Legislature for increased funding to allow the agency carry out an effective marketing campaign.

During the meeting, the tourism chief emphasized the need for an aggressive marketing to help position the CNMI as a quality destination.

With the cutthroat competition in the travel industry, an effective marketing campaign will help the Northern Marianas in increasing its market share in Japan, the island’s main source of tourists.

Due to the currency devaluation of Asian currencies against the U.S. dollar, many tourists from Japan and Korea find it expensive to travel to the CNMI compared to other destinations in Asia.

The low travel demand brought about by Asia’s economic crisis has forced airlines servicing the Northern Marianas to either cut back or terminate flights from major markets.

Airline seats have dropped from 33,316 to 14,263 seats per week, a 43 percent decline. Seats from Japan went down to 34.4 percent (8,122), followed by Korea, 58 percent (1,560) and Guam, 74 percent (4,203).

Tourist arrivals in the CNMI have drastically declined since the Asian economic crisis begun in July 1997. Businesses believe that it would be difficult for the CNMI to go back to its pre-Asian crisis boom when visitor arrivals reached 726,690, or a 66 percent jump over 1996.

In terms of promotion, Tenorio noted that there is an urgent need to create a distinct image for Saipan to set it apart from neighboring Guam. He said future campaign will focus on awareness on the diversity of the CNMI as a tourist destination.

Compared to the CNMI, other destinations have poured in huge amount of money for promotions. Hawaii Visitors and Convention Bureau has a budget of $45 million, while Australia has developed a $105 million campaign which will run for the next three years.