HANMI is grappling with ‘historically low’ occupancy

To shed light on its dire situation, the Hotel Association of the NMI has told U.S. Transportation Secretary Pete Buttigieg that the CNMI’s hotel industry is grappling with historically low and unsustainable occupancy rates, hence its request to exempt the CNMI from the federal cap on the number of China flights to the United States.

In a letter addressed to Buttigieg, acting HANMI chair Dennis Seo said an exemption to the U.S. DOT China order Part 213 is vital since the CNMI’s hotel occupancy figures remain crippled by the continuing impacts of reduced visitor arrivals.

DOT’s China Order Part 213 caps the number of flights from China to the U.S. at 24 flights a month. The cap covers all states and includes all U.S. territories.

To give a clearer picture, Seo shared that from August 2023, the CNMI’s hotel occupancy was about 23.77%.

Specifically, Seo said the number of rooms sold as of August 2023 is 14,582, but the CNMI’s total number of rooms available is about 61,351.

“Our industry is grappling with historically low and unsustainable occupancy rates and subdued room sales, even as the number of available rooms remains high. The average room rate, though seemingly reasonable, is reflective of the competitive pricing we’ve had to adopt to attract guests, which in turn impacts our collective ability to remain viable as an industry. The recovery of the hotel and broader tourism sector is intricately tied to the revival of international air service, especially from key markets like China. China has been a critical factor in sustaining hotel occupancy rates and has been instrumental in supporting economic activity and revenue for the industry. Current occupancy numbers are being supported by a single source market—South Korea—and it is clear that recovery of the industry and the economy cannot rely on this market alone,” Seo said.

Overall, without a sustained source of arrivals, HANMI will not be able to accomplish its goal to help the CNMI’s tourism industry recover, Seo said.

“We understand our responsibilities to the CNMI economy. Our goal and commitment to the CNMI community is to recover; however, the lack of direct air service has been a major impediment to our efforts and, without a sustained source of arrivals, we will not be able to accomplish this task,” he said.

In closing, Seo stated that HANMI is asking for an expedited approval of the Commonwealth Ports Authority’s application for the exemption.

“Such an exemption will not only boost our sector but will also have a ripple effect on the wider economy of the CNMI and allow us to remain in operation, support government revenue, and continue to be a significant source of employment for residents of these islands. We sincerely hope that you will consider approving the CPA’s application, understanding the profound impact it can have on reviving the hospitality sector and. by extension, uplifting the livelihoods of many residents,” he said.