BY GIFF JOHNSON
Marshall Islands Correspondent
MAJURO, Marshall Islands — The Marshall Islands Resort in Majuro, which celebrated its 25th anniversary of operations in August, has proof that in every dark storm cloud there is a silver lining.
The COVID-19 period with borders locked down has hammered local hotels including the resort, while keeping the country COVID-free. Occupancy rates collapsed. But in that dark cloud Resort General Manager Hirobo Obeketang found a silver lining.
As its revenue picture declined as a result of no visitors in 2020, the resort was faced with a large and static power bill. Staff turned off all the air conditioners in unoccupied rooms — which was a lot. But the power bill stayed the same. So Obeketang engaged the power utility to conduct a power evaluation on the two original meters the hotel used from its first day of operations in 1996. After the review by Marshalls Energy Co. technicians, the resort’s power bill dropped
“We are now saving $12,000 to $15,000 a month,” Obeketang said, adding that while he’s not pursuing a claim with MEC for earlier billings, he sees this as a huge opportunity for the hotel. “What we are saving in our power costs we are putting into room improvements.”
Obeketang also offered praise for Reginald White and the National Disaster Committee’s economic impact team that evaluated the COVID impact on businesses.
“They required financial statements and documentation (about the hotel’s financial situation),” he said. “You can’t just say, ‘We need money’ and get it.”
The NDC committee wanted to see what local businesses were doing to cut costs during this period. Among the actions the resort has taken since early in 2020 included reducing the hours of certain staff to cut costs due to the decline in room occupancy. “We didn’t lay off people but we reduced their hours,” he said. “They qualified for the Pandemic Unemployment Assistance (from the U.S. government).”
The resort’s operating loss in 2019, pre-COVID, was $96,495 — one of its closest years to breaking even. But for the 12 months ending Sept. 30, 2020, the operating loss more than doubled to $212,186. Looking at projections earlier in 2020, the government provided the resort with COVID relief funding of $239,064. The hotel projected late last year that its six-month operating loss through March 31 this year would be about $180,000; based on that projection, the government issued the resort a second COVID relief payment of $179,266. The COVID relief has continued.
While the room occupancy has been an ongoing problem with COVID travel restrictions, the food and beverage side of the hotel operation is booming. The hotel is busy with catering and hosting multiple meetings and workshops each week.
Obeketang also pointed out that the hotel has operated for the past 10 years without subsidy from the government.
“COVID has helped us in a way,” he said. “It’s focused us on how to save money.” mbj