Chairman: HANMI occupancy figures below profitable

The Hotel Association of the Northern Marianas issued a somber report regarding current occupancy figures, although its chairman said HANMI had reasons to be optimistic.

HANMI reported a 36% average occupancy rate among its 11 member hotels for December, with 26,146 of 71,801 available room nights sold for the month.

While HANMI said the rate is a 12% increase compared to a 24% average occupancy among 14 hotels in December 2022, it did not compare figures to the same month for 2019, prior to the pandemic.

According to the NMI’s Department of Commerce, figures for 2019 showed an occupancy of 80.43%.

Dennis Seo, general manager of Pacific Islands Club Saipan and chairman of HANMI; said in a Jan. 29 release, “On average, HANMI member hotels are still well below the industry benchmark of 80% occupancy to be profitable.”

Seo also said, “We are optimistic about the potential benefits of the EVS-TAP program for visitors from China, which we fully support. In addition, we are advocating for the reinstatement of Annex VI by the U.S Department of Transportation, which would allow Chinese carriers to provide flight service to Saipan without restriction on passenger flight numbers.”

HANMI is also optimistic “about the successful resumption of Hong Kong Airlines operations, which we understand is currently in the final stage of approval, with expectations for operations to resume in late March,” Seo said. “And we are pleased at the extension of Asiana flight service from Seoul through June 2024.”

Any increase in total occupancy tax - currently at 15% compared to 11% in Guam - is undoubtedly good news for the cash-strapped economy in the NMI.

HANMI estimated its members contributed $8.3 million in local taxes for 2023, 69% more compared to last year's $4.9 million (based solely on gross room sales and the hotel occupancy tax, excluding other sales revenue), the organization said.

The NMI Legislature has looked at an increased beverage tax, an increased cost for marriage licenses, and most recently a tax of 3% for construction contracts above $250,000 as a means of raising cash. The last measure is pending tax clarification, according to media reports. mbj