WITH THE HOTEL TAX CONTINUALLY MILKED
At a total of over 653,000 tourists, the CNMI tourism industry has seen a significant increase of 30 percent in visitor arrivals in fiscal year 2017 alone. But that record-high figure could plummet due to funding issues and the proliferation of illegal bed-and-breakfast operations.
Indeed, fiscal year 2017 has been a banner year for the Hotel Association of the Northern Mariana Islands, according to HANMI chair Gloria Cavanagh.
During a recent Rotary Club of Saipan meeting, Cavanagh said the number of unsold rooms went down in fiscal year 2017.
“The projected annual occupancy weighted averages is 91.7 percent [in 2017] compared to 87.63 percent in 2016,” she said.
According to Cavanagh, the tourism industry may be growing by leaps and bounds, but the Marianas Visitors Authority still struggles to promote Saipan as a destination due to lack of funding as its coffers continue to be raided by the Legislature.
In fiscal year 2013, MVA was only limited to $3 million. Because this was not enough, HANMI approached the House of Representatives’ Committee on Tourism and was able to convince it to raise the hotel occupancy tax from 10 percent to 15 percent, Cavanagh explained.
The results of the increase were outstanding, Cavanagh said. Eighty percent of the increase was given to MVA for promotion and enhancement purposes. That didn’t last long, though.
“The results were outstanding. So outstanding that the first chance the government had, they started taking from these funds,” she said.
First, the original $3 million was completely taken away, Cavanagh said.
Now, in fiscal year 2018, another $1.6 million was taken from MVA’s funding.
It just seems that MVA is the easiest source for the government to take funds from. “When [the government has] large expenses, they just believe MVA’s money is always the solution,” Cavanagh said.
It appears the purpose of why MVA exists is lost on the government. “I don’t think that they really understand what MVA is in charge of or what it needs that money for. They possibly think its too much money,” she said.
“They,” in this case refers to the CNMI’s lawmakers.
Also threatening the MVA’s budget are illegal bed-and-breakfast operations, Cavanagh said.
Because B&Bs are more preferred by both airlines and tourists due to their lower rates, this could mean a loss of revenue for HANMI that will directly impact MVA.
The Commonwealth Zoning earlier said there are currently only 63 B&B businesses registered with the board, yet there are a total of 264 places on Saipan registered on the Airbnb website.
Cavanagh said this is a concern because unregistered B&B don’t pay the hotel occupancy tax.
“We are not talking about closing them down, just come into compliance,” she said.