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<\/p>\nThe CNMI is currently facing a significant economic crisis due to the slow recovery of the CNMI\u2019s tourism industry. Addressing the CNMI\u2019s current economic state, Rep. Patrick H. San Nicholas (R-Tinian) is calling out to all CNMI leaders to take action.<\/p>\n
Last week, the Saipan Chamber of Commerce held the 2nd annual Economic Forum where Chamber vice president Joshua Wise shared insight on the dire economic state the CNMI is currently in stating that the CNMI is in crisis.<\/p>\n
Yesterday, in addressing the CNMI\u2019s current economic crisis, San Nicolas said the CNMI now, more than ever, needs bold leadership and decisive actions to address the crisis.<\/p>\n
\u201cIt\u2019s time for action not just words. The CNMI economy is facing significant challenges, and we need bold leadership and decisive actions to address them. As a lone representative from the island of Tinian, I am committed to working toward solutions that will stimulate economic growth, create jobs, and improve the livelihood of our people,\u201d he said.<\/p>\n
San Nicolas shared that CNMI leaders, like himself, must invest in key sectors, support innovation and entrepreneurship, and promote fair trade policies.<\/p>\n
\u201cLet us put aside partisan differences and work together to pass meaningful legislation that will revitalize the CNMI economy, the time for talk is over; it\u2019s time for action. Let us rise to the challenge and build a brighter economic future for our people. We are chosen amongst the people by the people to represent them in good faith, I stand for the people and not for an individual,\u201d he said.<\/p>\n
San Nicolas also noted that the hospitality industry, particularly major hotels, are facing significant challenges and need help.<\/p>\n
\u201cFrom Super Typhoon Yutu to the pandemic, [these events have] severely impacted tourism and travel leading to substantial decline in bookings and revenue. We need targeted support to help these businesses stay afloat,\u201d he said.<\/p>\n
San Nicolas adds that leaders of the Commonwealth must come together to address and identify the specific needs of the CNMI\u2019s hotels and act swiftly to prevent further job losses and ensure long term viability of these vital economic drivers.<\/p>\n
\u201cThese industries have a ripple effect that benefits not only the employees but also the wider community. When major hotels thrive, they create jobs, stimulate local economic growth and contribute to the overall vitality of the islands and the people. This in turn will benefit visitors and tourists who come to enjoy the island\u2019s unique attractions. By supporting the hospitality [industry], we are investing in the well-being of the people, fostering economic resilience and that our region remains a vibrant and attractive place to live, work and visit and let us recognize the far-reaching impact of our actions and work together to create a thriving economy that benefits everyone,\u201d he said.<\/p>\n
In his presentation during the 2nd annual Economic Forum last week, Wise explains that fiscal year 2017 was the last year the CNMI was on track for a healthy and sustainable tourism industry.<\/p>\n
\u201cWe were recognized by the World Tourism Organization as the third fastest growing tourism destination in the world. We had over 663,000 visitors, and the fourth highest fiscal year arrivals in history. We achieved this with nearly 5,600 flights from three major markets,\u201d he said.<\/p>\n
Wise adds that as of this year and last, the CNMI is far from 2017 numbers.<\/p>\n
\u201cLast year, we reached just over 215,000 arrivals. We are forecasted about 300,000 arrivals this year. That\u2019s absolutely not enough. We need at least 500,000 arrivals to break even. This forecast is a 54% loss compared to arrivals in 2017. Hotel occupancy also follows arrivals. We went from 90.89% in 2017 to 37.63% in 2023. Hotel occupancy of 80% is what hotels need to make a profit but 70% is what we need just breakeven. So, at 37% occupancy, which takes into account only HANMI members, is a massive loss. When we take into account the entire island\u2019s room inventory from non-HANMI members like guest houses, AirBnbs, our best occupancy we can achieve is just over 25%. This is an over 71% loss compared to our occupancy in 2017,\u201d he said.<\/p>\n
Based on these numbers, Wise says the CNMI has collected significantly less Hotel Occupancy Tax and Business Gross Revenue Tax.<\/p>\n
\u201cThis affects our entire economy. With less occupancy, means less occupancy tax, which means less BGRT. In 2017, we had nearly $17 million collected in HOT and $5.6 million in BGRT from HANMI hotels. However, last year, we had just $6.2 million collected in HOT and over $604,000 in BGRT. This year, the CNMI is expected collect about $7.2 million in HOT and around $2.4 million in BGRT from HANMI members,\u201d he said.<\/p>\n
Wise explains that the significant drop in arrivals (which resulted in the significant drop in hotel occupancy) is a result of less flights.<\/p>\n
\u201cLess flights mean less visitors. In 2017, the CNMI received 5,597 flights but when compared to last fiscal year, the CNMI only had 1,799. that\u2019s a 67.86% loss in flights. Meanwhile, in 2017, the CNMI had 12 airline carriers but in 2023, there are only four,\u201d he said.<\/p>\n
Wise said with the CNMI\u2019s current flights, the maximum number of tourist arrivals is about 270,000 which is nowhere near the 500,000 needed to \u201cbreak even.\u201d<\/p>\n
\u201cThe Korea market is already saturated, the Japan market is struggling with a record-low yen, and HK Airlines can only achieve 5% of China 2017 arrival. Bottom line, the current conditions are not stable,\u201d he said.<\/p>\n
<\/p>\n
Patrick H. San Nicolas<\/p>\n","protected":false},"excerpt":{"rendered":"
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