MVA in arrears of $1.7M as Finance owes $4M
The Marianas Visitors Authority owes its offshore offices about $1.7 million, as the Department of Finance has yet to remit $4 million in hotel occupancy tax to the MVA, according to MVA vice chair Gloria Cavanagh.
In an interview, Cavanagh said that Finance has remitted to MVA about $250,000 for this month, but this is only a partial of the hotel occupancy tax collection for December 2018.
“It’s very difficult. We don’t have that luxury anymore as far as promoting the destination,” she said during a recess in Wednesday’s MVA board meeting.
Due to this non-remittance of funds, there are so many things, including different request for proposals, that are being compromised, she said.
“Altogether it doesn’t make sense. MVA is a vital part of the economy. And it should be the last that would be touched,” she added.
Cavanagh said if MVA does not promote the CNMI as a destination, then it just prolongs the austerity measures for government employees.
She said MVA is owed $4 million in hotel occupancy tax as the total amount for the December collection is still in arrears.
Cavanagh said they have received 50 percent of the collection prior to this month—$250,000—which would only cover the budget payroll and rent. As a result, the MVA doesn’t have the money for marketing and promotions because they just don’t have the money to do so, she added.
“It’s a huge impact,” she said, noting that they are seeing a 17-percent decrease in tourist arrivals just for this past month.
Cavanagh pointed out that the only way to actually get to the point where the CNMI’s tourist arrivals were last year or even to a reasonable single-digit decline, is to promote the destination to its key markets.
“So, it’s a very dire situation. We’re in arrears. We’re very much in arrears,” she said. All offshore market offices (China, Korea, and Japan) are in arrears, as well as local vendors.
She said she is not sure when the last time the offshore offices got paid, but that they are in arrears about $1.7 million for those offices.
“It’s very serious,” Cavanagh said, noting that the last time that this happened was prior to 2013, when MVA was basically on a $3-million budget from the central government.
She said it was the reason at that time why the Hotel Association of the Northern Mariana Islands lobbied MVA very hard to get Public Law 18-1 passed, during which HANMI voluntarily increased the hotel occupancy tax by 50 percent.
She said HANMI did that because they understand that MVA is very vital to a destination.
“When you have an economy that is driven by tourism, you need to promote the destination. If you don’t promote the destination it’s very easy to be forgotten,” said Cavanagh who is also the current HANMI president and general manager of the Pacific Islands Club Saipan.