Hotel occupancy down as rooms are sold cheaper

As expected, the continuous economic slowdown has severely affected the island’s tourism industry as hotel occupancy in 1999 was registered only at 60.44 percent.

With lesser number of tourists who came to the CNMI last year, the average monthly room rate was only $98.98, an $18.25 drop from the previous record in 1998.

The 1999 hotel occupancy rate was way below the highest record of 85.57 percent and 82.62 percent in 1996 and 1995 respectively, considered as the boom years in the CNMI’s tourism industry.

In 1996 and 1995, averaged monthly room rate reached $127.73 and $116.77 respectively.

While there are more rooms to fill, visitors are paying less for their stay which means less profit for the hotel business and lesser revenue for the government, according to Mark Murai, general manager of Aqua Resort.

Saying that cheaper packages are dangerous, Mr. Murai said there is a need to upgrade the CNMI and market it aggressively as a destination. “We need a strong marketing strategy as a whole, we need to improve our infrastructure and keep an eye on public safety,” he said.

Mustafa Issa, general manager of Hyatt Regency, said the uncertainty brought about by the Y2K millennium bug has scared away travelers as the hotel is normally fully booked during the Christmas season. “Definitely, the second half of 1999 was stronger than the first half,” he said.

While admitting that the economic downturn has drastically affected the hotel’s business, Mr. Issa said occupancy is slowly picking up. “It makes us optimistic but not really a huge improvement,” he added.

Nikko Hotel general manager Yoshitsugu Abe believes that business will greatly improve this year as Japan’s economy has shown great improvement.

Mr. Abe cited three factors which will boost tourist arrivals this year, 1) yen rate to be pegged at less than 110 as against the U.S. dollar, 2) air seats capacity, and 3) the big summit meeting in Okinawa this summer which will push Japanese to go to other destinations including the CNMI.

Hotel Nikko’ enjoyed high occupancy during the holidays but business has slowed down immediately after the Christmas season.

The Hotel Association of Northern Mariana Islands has always emphasized the need to pour in more money in promoting the CNMI to Japan so that the Northern Marianas can easily get back its lost market share there.

HANMI has likewise, stressed the need to develop a distinct identity for the CNMI because it will be a crucial factor in marketing the Northern Marianas.

In developing a strong identity for the Northern Marianas, the association has noted the need to focus on the culture and history of the Chamorros and Carolonians.

Ron Sablan, president of HANMI has said that the CNMI cannot continue to capitalize on the beaches of the Northern Marianas in promoting the CNMI because tourists would always want to experience the local culture of a given destination. In fact, tourists have become so discriminating now that there is a need to provide value for
money in marketing a destination.