{"id":409749,"date":"2024-06-06T14:00:00","date_gmt":"2024-06-06T14:00:00","guid":{"rendered":"https:\/\/www.saipantribune.com\/?p=409749"},"modified":"-0001-11-30T00:00:00","modified_gmt":"-0001-11-29T14:00:00","slug":"HK-Airlines-proves-pent-up-demand-to-travel-in-China","status":"publish","type":"post","link":"https:\/\/www.saipantribune.com\/index.php\/HK-Airlines-proves-pent-up-demand-to-travel-in-China\/","title":{"rendered":"HK Airlines proves pent-up demand to travel in China"},"content":{"rendered":"

Saipan Chamber of Commerce director Alex Sablan shares that Hong Kong Airlines is proof that there is a pent-up demand to travel in China with Hong Kong\u2019s weekly flights bringing in more tourists than United Airlines\u2019 thrice-weekly Japan flights.<\/p>\n

The Chamber held its monthly general membership meeting yesterday at the Kensington Hotel Saipan.<\/p>\n

During the meeting, Chamber board secretary Ron Smith discussed the importance of \u201cOperation 500K,\u201d a strategic plan to bring in at least 500,000 visitors needed to keep the CNMI\u2019s economy afloat.<\/p>\n

\u201cOperation 500K\u201d entails at least four flights a week from three source markets, currently the CNMI has daily flights from Korea, three weekly flights from Japan, and once a week flights from Hong Kong.<\/p>\n

During the presentation, concerns were raised if there really is a pent-up demand to travel from China to which Chamber director Alex Sablan said \u201cyes\u201d and Hong Kong Airlines is proof of that.<\/p>\n

\u201cThere is pent-up demand, we\u2019re seeing it through the Hong Kong Airlines flight, [People\u2019s Republic of China] tourists are even willing to transit through Korea. Their numbers aren\u2019t entirely lost, we have more Chinese tourists through this weekly flight from Hong Kong Airlines than we do from the three weekly flights by United from Japan.\u201d<\/p>\n

Sablan also noted that the United States has even seen over 2 million PRC tourists coming in post COVID-19 and that\u2019s through B-2 tourist visas.<\/p>\n

The CNMI has an advantage over the continental United States as it\u2019s the only territory with the CNMI Economic Vitality & Security Travel Authorization Program (EVS-TAP), which essentially makes traveling easier for Chinese tourists to visit.<\/p>\n

\u201cIf you look at post-COVID data, there was about 1.2 million travelers from China to the U.S., last year there was about 2.2 million, there\u2019s a projected 3.3 million coming into the U.S, next year and beyond the United States is looking at around 3.7 million to 4 million. These are B-2 visas, but the CNMI is the only territory with the EVS-TAP program as a resource. This was negotiated through 902 talks during the Trump administration and the Biden administration saw it through and are now implementing it,\u201d he said.<\/p>\n

According to Saipan Tribune<\/em> archives Chamber vice president Joshua Wise shared that the CNMI is in crisis mode.<\/p>\n

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 said 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

To address these issues and to bring the CNMI\u2019s economy to the point of breaking even, Wise says the Chamber and the Hotel Association of the NMI has established \u201cOperation 500K.\u201d<\/p>\n

<\/p>\n

Saipan Chamber of Commerce director Ron Smith during the Chamber\u2019s general membership meeting yesterday at Kensington Hotel Saipan.<\/p>\n

-CHRYSTAL MARINO
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