Govt says closure will negatively affect Tinian economy, rest of CNMI
Two weeks after Tinian Dynasty Hotel and Casino shuttered its casino doors, its owner, Hong Kong Entertainment, is now announcing that the full closure of both the casino and hotel is imminent.
HKE chair Wai Chan Chan informed Tinian Mayor Joey P. San Nicolas that the full closure might happen before the end of this month.
“It is with great regret that we must inform you that complete closure of the Tinian Dynasty Hotel and Casino is imminent. Insufficient guest arrival and negative cash flow has made it impossible to keep the property operational. All of our remaining operational resources will soon be exhausted,” Chan stated in a letter to San Nicolas dated Sept. 1.
Chan said that HKE had not anticipated the losses suffered as a result of Typhoon Soudelor.
“We do not have necessary capital resources of business revenue to sustain the hotel. We are currently operating at a significant loss and we cannot afford to do so any longer,” Chan said. “Our operating funds will be exhausted in a matter of weeks. We now anticipate that the hotel will be closed before end of September.”
Tinian Dynasty has more than 600 employees, according to San Nicolas.
The onslaught of Soudelor stopped nighttime flights to and from Saipan, ultimately resulting in the cancellation of tour packages to Tinian. That forced Tinian Dynasty to temporarily close its casino operations on Aug. 14, laying off 135 employees. Its hotel operations remained open, though.
It is not only the Tinian Dynasty’s employees that will be hurt with its closure; the Tinian municipality will be impacted as well. It was earlier reported that Tinian Dynasty’s casino revenues provide funding for 43 positions within the Tinian Casino Gaming Control Commission, Tinian Mayor’s Office, and the Office of the Tinian Municipal Council.
Last Aug. 25, San Nicolas issued a notice to Tinian municipal employees on the likelihood of their contract not being renewed as a result of the casino’s closure. It also suspended the operation of numerous municipal programs and activities that are funded by casino revenues.
San Nicolas expressed concern due to the fact that the government cannot be the only source of employment for the Tinian community.
“We simply can’t afford it. That is why we as leaders need to seek ways to promote and support private sector employment,” he said.
His concern is the “collateral damage” that would result from TDHC’s shutdown—the hundreds of people that would be left unemployed.
“This means less people eating out at restaurants and buying at the grocery stores. This undoubtedly will have a devastating impact on our fragile local economy,” he said.
San Nicolas said he has already met with Gov. Eloy S. Inos to apprise him of the situation.
“The governor is just as equally concerned. He and I are exploring the possibility of tapping into grant money from the [U.S] Department of Labor that was awarded to assist with displaced workers,” San Nicolas said.
According to Inos, Tinian Dynasty’s closure will have a ripple effect not only on the Tinian economy but the CNMI’s economy as well.
“The planned closure of the Tinian Dynasty Hotel & Casino before the end of this month will surely cause a ripple effect on the Tinian economy and the CNMI economy as a whole,” Inos said.
“I understand that about $3 million is paid annually to the Tinian Municipal government and the TCGCC for various fees aside from what the establishment pays its employees and for other direct services. I am concerned because this closure and the loss of the fees will have a direct impact on retail purchases, employment income, and the purchases of local services, among others,” he said.
“I will be in talks with San Nicolas, members of the TCGCC, and the Tinian delegation to see how, in the short term, we can avail of the U.S. DOL grant funds for the establishment’s dislocated and displaced workers. Further talks will be in place for the long term to mitigate the expected ripple effects on our economy,” he said.
Right now, HKE is still waiting for TCGCC’s approval of Tinian Entertainment Co.’s casino license application to assume operational control of the casino.
TCGCC executive director Lucia Blanco-Maratita laments that instead of informing TCGCC first, HKE decided to go directly to the Tinian mayor about their plans to close the Tinian Dynasty entirely.
“Chan sent a letter on Sept. 1 to San Nicolas that he is planning on closing the Dynasty hotel because of losses suffered by Typhoon Soudelor. He has not even provided official notification of the closure of the entire property to the Gaming Commission,” Maratita said.
“We are currently verifying the facts with Mr. Chan and to determine what his plans are. If in fact he wishes to close the Dynasty, he must follow the procedures for such closure as outlined in the Tinian Gaming Act,” she added.
“We are in the process of confirming what his [Chan’s] plans are,” she said.
In the meantime, TCGCC continues to process the casino license application for TEC and Chinese Strategic Holdings Ltd., who want to invest in and operate Tinian Dynasty.
“We are currently waiting for the companies to submit the requested documents and information that are needed in order for their application to be ‘deemed substantially complete’ so that the suitability investigations of their entities and individuals can commence. We expect that once they submit these documents, pay the fees due, we will then begin and complete the suitability investigations within 45 days,” Maratita said.
“The commission can then make its determination as to their suitability to be involved in the casino industry. Right now, we are just waiting for the company to meet these requirements,” she added.
Marianas Visitors Authority managing director Perry Tenorio expressed surprise upon learning about Tinian Dynasty’s imminent closure. Tenorio said that MVA will be looking into the matter to find out the impact of Tinian Dynasty’s closure on the tourism side of the economy.