“How long can a company run on a single-digit occupancy?”
That question, which Hotel Association of the Northern Mariana Islands chair Gloria Cavanagh posed at yesterday’s Saipan Chamber of Commerce meeting at the Pacific Islands Club Saipan, has become more pressing for many hotels each day, prompting many to scramble to cut costs and let go of people to ensure their continued survival.
At the same meeting, Labor Secretary Vicky Benavente disclosed that the department has been notified that over a thousand employees from different companies will lose their jobs, that over a dozen companies have asked them about reduction in workforce and hours.
Based on the March records of seats on flights still coming to the CNMI, HANMI hotels are looking at less than 30% occupancy, should the load factor be at 60%.
“The actual total amount of seats is 12,555. If we had those 12,555 seats filled 100%, our occupancy for HANMI hotels would still only be 49.7%,” said Cavanagh, “but it is actually unreasonable to think that we’re going to have 100% load factor.”
Cavanagh added that it is not even a matter of incentivizing the tour agents nor the airlines, but the reality that nobody wants to fly.
To provide the CNMI Department of Labor with a complete picture as to how the hotels are doing, HANMI has prepared a survey that asks the hotels about its current services, if the services and hours are being cut, if people are being laid off, or if the hotel is closing.
As general manager, Cavanagh said that PIC alone has minimized its services and has implemented time reductions as a cost-saving measure.
She added that her employees would love to get 32 hours a week, in relation to the government implementing a 64-hour per pay period, 32-hour per week austerity.
Revealing that PIC only had an 8% occupancy yesterday, Cavanagh asked, “In reality, how long can a company run on a single-digit occupancy?”
While acknowledging that layoffs are a possibility, Cavanagh said that that is not in the plan at the moment.
“If we send everyone away, and we lay off people, then that’s going to be an issue,” she said. This is because, once the virus outbreak is resolved and the tourists are ready to go back, the CNMI tourism industry may not have enough manpower then.
Benavente said that they have put emergency regulations in place, valid for 120 days, and that they have also already asked the U.S. Department of Labor for unemployment assistance.
“The U.S. Department of Labor has been communicating with us. We have asked ‘the big ask,’ can we get some help for disaster, unemployment assistance for more than 1,000 employees that we’ve been notified will be laid-off, a thousand people without jobs,” she said.
Benavente revealed that since December, the Department of Labor has received over a dozen letters from companies who are asking about reduction in force as well as reduction in hours.
Aside from asking U.S. Labor for assistance, the CNMI Department of Labor has also organized a Workforce Resource Fair on March 11, from 4pm to 6pm, targeted to employees.
The Northern Marianas Housing Corp., Commonwealth Development Authority, and some other organizations will be present to help people who are going to be losing their jobs, as well as whose hours would be reduced.
As the number of tourists drop to its lowest due to the COVID-19 outbreak, hotels have been tightening their belts and have been implementing measures to keep its operations running.