TO CUSHION GARMENT PULLOUT Study says CNMI needs 900 more hotel rooms

A financial analysis conducted by the CNMI’s Strategic Economic Development Council has projected that an additional 900 hotel rooms will be needed to make up for the expected lost in revenues as a result of the projected decline in the garment industry.

The Council, composed of executives from local and regional banks, hotels, airlines, retailers, and travel agents, aims to create a coordinated long-term vision for the future growth of the Northern Marianas.

Business leaders have been meeting to discuss ways on how to diversify and strengthen the local economy with the expected pull out of garment manufacturers with the implementation of world trade agreements scheduled to take effect in the year 2005.

According to the Council’s Hotel Development Committee headed by Mark Murai, general manager of Aqua Resort Club, and Ron Leach, senior vice president of the Bank of Hawaii, tourism expansion plans to fill the gap would necessitate the construction of 900 new hotel rooms by 2004.

By expanding local attractions and enhancing the CNMI’s image as a first class destination, it is estimated that the islands could accommodate up to 800,000 tourists by 2005.

During a meeting at the Hyatt Regency Hotel, the Council noted that changes brought about by current global trade liberalization talks at both bilateral and multilateral levels may result in the removal of the CNMI’s unique advantages, forcing garment-makers to seek other low-cost markets. This will result in job losses among local residents and revenue losses to the Commonwealth government.

An increase in the number of hotel rooms would enable the government to target a $200 million increase in government revenues by 2005 and continue the delivery of essential public services, which is critical to the economic and social welfare of the CNMI.

Increased air service to accommodate tourism expansion is another key element of the Council’s plan. Air Service Committee chair Bill Thompson, former chief of the Guam Airport Authority, said the commitment of every airline serving the CNMI is vital.

Continental Micronesia Marketing Director Wally Dias reiterated the airline’s commitment to the CNMI and said new flights would be added as the local demand increases. Council members agreed to work with Japan Air Lines, Asiana Airlines as well as the Governor’s Special Aviation Task Force to expand air service and encourage additional direct flights, create new incentives and conduct joint promotions overseas.

Tourism growth would also be enhanced through coordinated planning and improvement programs. These include destination development, infrastructure expansion, site enhancement, cultural experiences.

Destination Development co-chairpersons Mustafa Issa, Hyatt general manager, and Marian Aldan-Pierce, DFS Saipan president, said the Council is pleased that $2 million has been appropriated for the initial phase of the on-going Garapan Revitalization Project and that an additional $7 million has been proposed to be funded when proceeds from the proposed $60 million CIP bond float becomes available.

To attract investors, the Council supports legislation to create a package of incentives under a qualifying certificate program. Council member David Berger, a Certified Public Accountant, said the concept is similar to a program already underway in Guam and would be designed to attract investors and developers to the CNMI.

The Council is also working closely with the administration and the Legislature. Governor Tenorio called the effort “a ground-breaking partnership” and has committed government resources and assistance to achieve the Council’s goals.

Commonwealth Development Authority Chair Juan S. Tenorio also pledged CDA’s full support of the Council’s economic development efforts. Senate President Paul Manglona and House Speaker Benigno Fitial have asked their respective legislative committees to assist the Council.

The governor expressed full support for the initiative taken by the private sector as he noted efforts of the business group to assist the Governor’s Economic Revitalization Task Force. He said the meetings are “another good example of the excellent cooperation and support of the local business community.”