On July 31, 2013, I had the distinct privilege of addressing the membership of the Guam Chamber of Commerce as well as several Rotary Clubs. My mission was to spread the good news of the Commonwealth of the Northern Marianas’ tourism and economic growth. In my presentation I delivered the Marianas Visitor Authority projection of 445,000 tourists for 2013. By the end of the year, we finished remarkably close with 439,000 arrivals, which was a 14% increase from 2012. This year with more flights from Russia, Korea and China, the MVA is projecting 484,000 tourists, and the numbers look to be on target. The resurgence of our tourism arrivals are attributed to the Korean, Chinese and Russian markets. However, like many regional destinations, the Japanese tourist numbers are flat, or in our case, declining annually.
I continually hear people say, “That’s a good problem to have” when describing the current dilemma in the CNMI, specifically on Saipan, when referencing the hotel room shortage in correlation to airline flights and our peak periods. Is this a good problem? Let’s examine the issue.
Initially I want to provide a disclaimer that I do not speak for the tourism industry or any airlines mentioned, this is purely information provided on the basis of discussions I have had with many industry leaders. During the peak periods, which are the last week of December through the end of May and July/August, the hotel industry — specifically shoreline resort hotels — on Saipan are experiencing an average of 105% and 93% occupancy, respectively. The shoulder periods are mid-80%, and off-season is hovering at 72%.
It has been announced that Oren Airlines, a Russian carrier, will increase seat capacity with an additional Boeing 757 to begin service in October of this year from the Russian island of Sakhalin. This announcement came on the heels of several boutique hotels stating that they would be opening this summer. But boutique hotels will not satisfy the demand alone. In order for Jeju, Vanilla and Jin Airlines to enter our market or Delta, Asiana, Dynamic or Oren Airlines to increase their flight frequency, we will need to build more rooms, and soon.
The same disclaimer applies here. In April 2013 the Inos Administration announced requests for proposal to lease large tracts of government land and construct a minimum 200-room hotel on a 45,000-square-meter tract of land in San Antonio, just north of Pacific Islands Club, and on another 99,000-squaremeter tract just north of Pau Pau Beach. There were several serious bidders, and the awards were made in late 2013 and early 2014, respectively; however, negotiations are ongoing with respect to lease arrangements for the properties, and construction is expected to begin late this year and early 2015.
E-Land Inc. officially announced early this year that its 315-room Palms Resort, formerly the Nikko, would be transformed into the Sheraton and is soon to announce the progress on its 300-room Coral Ocean Point property. E-Land Inc. will also announce its progress on an additional 300 rooms for Pacific Islands Club, which it acquired in early 2013. DFS Galleria owners then announced a 350-room hotel for its vacant property located in Western Garapan just south of Fiesta Resort Hotel. Several smaller properties have announced their intent to reopen or build new room. These will account for more than 300 rooms.
The recently passed casino law requires the bidder to build a $2 billion, 2,000-room fully integrated casino resort destination somewhere on Saipan. This will be a lofty task for the casino developers specifically because with all of the proposed hotel developments, one question still lingers: Where do we get the workers to man these hotels and ancillary businesses that will come in relation to our impending tourism boom?
The CNMI recently received word from the U.S. Department of Labor that the CW visa would be extended an additional five years to Dec. 31, 2019. This, of course, was welcome news specifically because workers and businesses in the CNMI needed an answer on the status of their contracted workers. Equally concerning, as was pointed out in numerous U.S.–government sponsored economic reports, there is not a sufficient U.S. citizen worker base to sustain our tourism market today. Thus, we will inevitably need a CW visa program in the CNMI until such time our U.S. citizen populace is able to meet the demand.
The beauty of working for one of the largest employers in the region is the diligence and concern my employers have for the communities in which we conduct our business. Along these lines we frequently examine the conditions of our economy. In our recent SWOT examination of the CNMI, we determined that there are 5,700 new hotel rooms proposed to open their doors in the next two to seven years, which will eventually bring our resort hotel room number to 7,300, a number comparable to Guam’s room inventory, if all are successfully built. Our workforce estimate is that we need 8,000 new workers. This is why the Saipan Chamber of Commerce has initiated discussions with the Inos Administration, Congressman Sablan’s office and all stakeholders involved in workforce development and policy to carefully examine this workforce issue.
The Saipan Chamber of Commerce would encourage a public policy that fairly incorporates our U.S. citizen populace into the workplace and further establishes what our realistic needs will be for a continued CW visa worker program to meet the impending demand. We are hopeful that the leadership of the CNMI and U.S. Department of Labor are able to come up with a plan that helps sustain our economy.
— Alexander A. Sablan is vice president of logistics and new business development at Tan Holdings Corp. and president of the Saipan Chamber of Commerce.
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