NMI faces $183M economic loss

The CNMI stands to lose $108.9 million in economic opportunities this year as a result of the federalization of immigration this June and the loss of the Russian and Chinese tourists, according to the Marianas Visitors Authority chief.

This loss, Perry Tenorio said yesterday, is only for up to the end of 2009 and could go higher if it takes the Department of Homeland Security much longer to hammer out the rules under which Russian and Chinese tourists could come to the CNMI.

“The estimated losses from Russia and China markets is just for six months…but if you roll it out for a year, we’re looking at $184 million in economic losses annually,” Tenorio said.

It may take Department of Homeland Security 12 to 18 months before it can establish the necessary security protocols for the Russia and China markets, he added.

The federalization law excluded these two markets from the CNMI-Guam U.S. Visa Waiver program. This means that tourists from these destinations cannot enter the CNMI without a valid U.S. visa.

Records from the MVA showed that the islands welcomed about 27,000 Chinese visitors and about 7,000 Russian visitors in calendar year 2008.

With the exclusion of the two markets alone, MVA is looking at more than a 90-percent overall impact on the tourist arrivals in the CNMI.

“We will lose that opportunity and even if we get 5 percent of these people [from Russia and China] we will never make up the economic impact of these visitors who have been to our island,” Tenorio told Saipan Tribune.

More bad news

Tenorio said another $73.8 million is expected to go out the window due to the termination of Northwest Airlines’ Osaka-to-Saipan air service on March 1, 2009. The termination of the Osaka flight means that the CNMI will lose 66,248 air seats annually.

Although the CNMI still has Asiana’s flight service from Osaka, its aircraft has less seat capacity than Northwest’s.

Asiana flies Osaka-Saipan three times weekly using a 177-seat aircraft seasonally. Tenorio said that projected estimated annual seats by Asiana on an annual basis is approximately 12,744, which makes up only 20 percent of Northwest’s 66,248 annual seats.

From the Osaka service alone, about 50,000 tourists were on island last year.

“The current pattern does not offset the losses we will get from Northwest…but at least we still provide opportunity for people from Osaka to directly fly to the CNMI,” Tenorio said, alluding to Asiana’s Osaka service that was launched Dec. 19, 2008.

‘Asiana’s commitment’

MVA is counting on the serious commitment of Asiana Airlines to the Commonwealth.

Currently, the signatory airline has 18 regular flights to Saipan.

Tenorio said that, although Asiana may adjust the type of equipment they use, MVA is confident that it will continue its service.

“Asiana has schedule air service…depending on the season and demand, they may down up or down gauge their equipment rather than terminating their air service,” Tenorio said, adding that the airline has still 18 regular flights to CNMI.

The airline has two daily flight services from Incheon and four times weekly from Busan, Korea.

Japan Airlines pulled out its service from the CNMI in October 2005, adversely affecting the islands’ tourism industry, which retains Japan as its primary market.