Room rates lagging behind improved occupancy rates

August was a good month for the hotel industry, with the average occupancy rate reaching almost 75 percent.

The Hotel Association of the Northern Mariana Islands reported that hotel occupancy rates averaged 74.66 percent last month—a significant increase from the 63.39-percent average rate in August 2003.

Hotel room rates, however, dropped by almost 16 percent in August when compared with the same month last year. While posting the highest room rate so far this year, last month registered the lowest figure for the month of August since 1992.

HANMI chair Ronald Sablan attributed the increase to additional flights introduced by the airlines, the improving Japanese economy, and the exodus of typhoon victims to the hotels.

“There were more affordable travel packages to the CNMI over the past month. Also, as we said earlier, a lot of local residents sought temporary shelter in the hotels during the typhoon,” Sablan said.

He also noted that the Japan economy has been slowly improving.

“We have to give credit to all the players of the tourism industry who have pulled together during these tough times,” he said.

Sablan expressed confidence that the coming months will be favorable to the hotel industry. With that, he hopes that hotels may gradually bring room rates back to their level before the Iraq war and the SARS outbreak devastated the tourism industry last year. The aftermath of both events forced many to drop their room rates in order to come up with more attractive packages to guests.

Last August, room rates averaged only $91.95—a 15.93 percent decline from the $109.37 room rate in August 2003.

The previous low for the month of August was recorded in 2002, when room rates reached only $107.46. This came as a result of the 9/11 terrorist attacks in the United States.

“When arrivals and occupancy rates rise, the room rates also usually rise. This did not happen last month because many hotels had reduced room rates. Once you do that, you can’t just adjust the rates as soon as things start to look good. It has to be done gradually,” Sablan said.

HANMI statistics represents over 2,500 rooms in 14 Saipan hotels—Hotel Regency Saipan, Hotel Nikko Saipan, Dai-Ichi Hotel, Pacific Islands Club, World Resort Saipan, Saipan Grand Hotel, Marianas Resort Hotel, Aqua Resort Club, Aquarius Beach Tower, Coral Ocean Point, Century Hotel, Chalan Kanoa Beach Club, Saipan Ocean View Hotel, and Pacific Gardenia Hotel.