Korean economic woes impact NMI

Following two months of year-over-year increase in visitor arrivals, the Marianas Visitors Authority is reporting a slight dip in numbers, attributed in part to a cooling Korean economy.

Arrivals for the month of November 2008 were virtually the same compared to the same period the previous year. Total visitor arrivals to the CNMI reached 31,690, a mere 72 more visitors than November 2007.

After posting consistent gains over the last year, arrivals from Korea dropped a significant 23 percent last month to 8,912 visitors. Perry Tenorio, managing director of MVA, cited two major factors influencing travelers from Korea: the depreciation of the Korean won and a Korean government request to its citizens to cut back on overseas travel.

The exchange rate between the U.S. dollar and the Korean won has, from the traveler’s viewpoint, slipped dramatically, said Tenorio.

“A tourist from Korea back in August 2008 received a dollar for every thousand won he offered in exchange. Today, that same tourist would have to spend over 1,500 won to get that same dollar. In short, it will cost him half again as much to travel to a U.S. dollar-based destination as before,” said Tenorio. “This is a serious obstacle to someone thinking of traveling during the next few months. This exchange discrepancy will likely ease over time, but will affect short-term travel decisions negatively.”

The Korean national government has also issued a communiqué requesting its citizens not to travel out the country in order to reduce cash outflow and to help stabilize the won against foreign currencies.

“This government communiqué has come in patriotic terms rather than an outright ban on offshore travel, but even so, we expect it will carry a lot of weight with Korean citizens,” said Tenorio. “This no-travel request will probably be lifted once the won stabilizes and exchange rates return to a more normal level. Meanwhile outbound travel from Korea can be expected to dwindle seriously.”

November 2008 was a strong month for the Japan market with a 28 percent increase in arrivals compared to November 2007. Japan generated 17,055 visitors in the month of October, a figure 3,773 above arrivals in November 2007. One major factor that contributed to this growth is airline seats capacity. In November 2007, the CNMI had two daily direct flights from Japan with total seats of 480 per day. In 2008, the number of direct flights doubled from two to four per day, bringing the total number of seats to 844.

Russia continues to record growth, with arrivals jumping 75 percent to 456 visitors. MVA travel partners in Russia have launched an aggressive promotion designed to lure travel to the CNMI, and the CNMI is expecting three charter flights from Vladivostok before the end of January.

Arrivals from China continue to plunge due to a reduction in airline seats. For the month, arrivals reached 2,040 visitors, a 28-percent decreased compare to November 2007. The CNMI has only one direct flight from Shanghai, China, compared to two in November 2007 when the CNMI had two direct flights from Guangzhou and Beijing.

Cumulative arrivals this fiscal year total 60,578 visitors, or 1,722 (2.93 percent) visitors ahead of the same period last year.

With the economies of Japan and Korea on the downswing and the uncertainty of continued visa waivers for China and Russia, tourism in Saipan, Tinian, and Rota faces significant unpredictability in 2009, the MVA said.[B][I] (MVA)[/I][/B]