MVA board chair says lower budget imperils marketing campaign

Marianas Visitors Authority board chairman Dave M. Sablan yesterday said the CNMI may not be able to implement an effective promotional campaign in Hong Kong and Korea if the Legislature fails to appropriate the additional $1.75 million for its advertising campaign.

“Our biggest drawback is operational money because it gives us hardly any room to move around. I will not take it against he Legislators if they say there is no money because everybody needs additional funds so they have to prioritize everything,” said Sablan.

MVA managing director Perry John Tenorio has lobbied for an additional funding to strengthen the CNMI’s presence in international travel and carry out an effective marketing campaign. It’s budget for fiscal year 2000 was pegged at $5.88 million by the Office of Budget and Management, 16 percent lower than the current appropriation.

Tenorio has ruled out producing television commercials to promote the Northern Marianas in Japan in next fiscal year due to budgetary constraints. Instead, MVA will remain tapping the print media in marketing the CNMI as well as introduce the destination extensively in subway and train stations, according to Perry John Tenorio.

Sablan has expressed concern that a further reduction in budget would affect efforts to revive the ailing tourism economy at this time when there is cutthroat competition in international travel brought about by the economic crisis in Asia.

In its marketing campaign, MVA aims to create demand and increase mind share which would eventually stimulate more carriers to fly directly to the CNMI.

During the meeting with legislators, Tenorio emphasized the need for an aggressive marketing which will 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.

There is a strong need to create a distinct image of Saipan that will differentiate it from Guam as both islands compete for an increased market share in Japan.

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

The planned campaign will focus on increasing awareness of the diversity of the CNMI’s tourism product, highlighting both the natural attractions of the destination as well as the broad range of tourism experiences that can be enjoyed in the CNMI, said Tenorio.

Tourist arrivals in the CNMI have drastically declined since the Asian economic crisis begun in July 1997. Businesses believe that it will 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.

Due to the currency devaluation of the Asian currencies against the U.S. dollar, traveling to the CNMI has become very expensive for visitors from Japan and Korea, while the destinations in Asia have become much cheaper.

As a result, airlines servicing the CNMI have reduced or terminated direct 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).

Various airlines have assured tourism officials that they would restore seat capacity if they stimulate travel demand to the CNMI. This has led MVA to reassess and refine its marketing positioning in Asia, its most important region, Tenorio said.

The decline in Asian visitor arrivals, Tenorio said, is seen as an opportunity for positive change and development. When recovery comes, the CNMI will be positioned to enter the new millennium with strong and sustainable growth in the region, he added.