MVA, HANMI welcome NMI reinstatement of PRC Approved Destination Status

by Mark Rabago
Saipan Correspondent

SAIPAN — The Marianas Visitors Authority and the Hotel Association of the Northern Mariana Islands welcomed the People’s Republic of China’s decision to reinstate the Northern Mariana Islands on its Approved Destination Status list, allowing package tours and charter flights to the destination once again. 

“The tourism industry cannot survive long term with just one dominant source market as is the case today with South Korea.  China was once our second largest source market with over 200,000 annual arrivals pre-COVID-19,” Christopher A. Concepcion, managing director of MVA; said.

He also echoed the statement made by U.S. Commerce Secretary Gina Raimondo, who welcomed the move by China’s National Tourism Administration to allow group travel to the NMI in particular and the United States overall.  

“As the secretary mentioned, this is a result of continued engagement between U.S. and Chinese government officials, and came after months of negotiations between the U.S. Department of Commerce and the Chinese Ministry of Culture and Tourism.”  

Concepcion said the NMI is unique among all U.S. states and territories in that it is the only jurisdiction that allows entry of Chinese citizens through a discretionary parole program of the U.S. Department of Homeland Security. 

“The MVA is focused on the tourism aspect of this development and nothing more. Any opportunity to diversify our tourism portfolio is welcomed.”
Concepcion said even without direct flights, the NMI is seeing a slight increase in arrivals from China.

“Prior to the pandemic, China was one of the top source markets for the Northern Marianas. While the market is anticipated to continue incremental growth, it is expected that it will take several months before charter flights resume and more arrivals are seen,” he said.

Raimondo earlier said the restoration of the United States as an approved destination for Chinese group travel is a significant win for the U.S. travel and tourism industry and an important step forward to promote the type of people-to-people exchange that is crucial for U.S.-China bilateral relationship.

“This has been the culmination of months of hard work between the U.S. Department of Commerce and the People’s Republic of China Ministry of Culture and Tourism. Before COVID, as many as 3 million Chinese travelers visited the United States annually, contributing more than $30 billion to the U.S. economy. We look forward to once again welcoming Chinese group travel to the United States.”

Dennis Seo, assistant general manager at Pacific Islands Club Saipan and HANMI vice chairman; said the group also welcomes the reinstatement.

“Although there are still some steps to overcome, such as re-establishing flight availability and the local tourism supply chain, this lifting of pandemic-era restrictions on group tours to the U.S. is another positive step toward the recovery of tourism business in the [Northern] Marianas,” he said.

China has been one of the key tourism markets of the NMI, comprising 46% of the total visitor arrivals or about 190,000 visitors in 2019, Seo said. 

“At this time, our destination has recovered only 44% of visitor arrivals compared to pre-COVID – mostly from South Korea and some from Japan. Charter flights from China will allow us to accelerate our economic recovery, keeping our hotels and other businesses in operation, our employees on the job, and generating more financial resources for all the government.  This is welcome news for The Marianas,” Seo said.

While MVA and HANMI welcomed the reinstatement, Gov. Arnold I. Palacios hasn’t changed his position to pivot the NMI away from its reliance on the Chinese tourism market.
“My current position is still the same. We cannot continue to be reliant [on the Chinese tourism market]. If they come, that’s great,” he said.

While he is glad the Chinese government is now allowing group tours to the U.S., the United Kingdom, Australia, the CNMI, and other countries, Palacios said everyone will still have to remember that there is still a sensitivity factor to the locations of Guam and Tinian, where major military facility infrastructures are being built.

Prior to the COVID-19 pandemic, China was the second top source market for the NMI, with South Korea in first place.

“Again, we can’t put all our eggs in that market,” Palacios said, adding that he is not saying that Chinese tourism needs to stop. He said the geopolitical climate right now is “very sensitive.”

The governor said the federal government can “pull the plug” on the Chinese tourism market at any given time, so the NMI needs to be mindful of that.

In March, Palacios wrote a letter to Adm. John Aquilino, commander of the U.S. Indo-Pacific Command, saying his administration is committed to advancing U.S. national interests in the Pacific region, which includes pivoting away from the NMI’s reliance on its Chinese tourism market.

The Commonwealth Ports Authority finds it problematic that the NMI is not actively courting the China tourism market to return without an alternative visitor arrival market to fill the gap. 

Kimberlyn King-Hinds, chairwoman of the CPA; said despite a 1,000% increase in visitor arrival numbers from a year ago, airline service to the CNMI has not reached pre-COVID-19 numbers and due to the lack of flights the CPA is forced to hike airport rental rates up to 79% from $18 to a little over $32 per square foot.

Airport rentals do not only refer to rent paid for actual physical space like a store, but also refers to the assigned gate for each airline — a terminal rental.

“We’re going to adopt a new rate methodology. As I stated before, it’s based on cost recovery. What we’re looking at is basically different scenarios to try to lessen the impact on the airline carriers — basically airport rates and charges. We have to find money to operate,” she said.

King-Hinds said this dilemma will only continue until the NMI either brings back the China market, rapidly expands the influx of tourists from the CNMI’s largest pre-pandemic market, or find new markets to replace the China market.

“We are in a world of hurt because we don’t have the China market online. That’s a fact. If you compare pre-pandemic and post-pandemic arrival numbers, we are nowhere near where we need to be. Absent the China market, we will not reach those numbers unless we get new markets online. That has a significant impact on our ability to keep rates down,” she said.

Marianas Global Inc., a South Korean conglomerate that recently was awarded the contract to operate Managaha Islands, is bullish on the tourism industry of the Northern Marianas with or without Chinese tourists.

Younghee Youn, founder and CEO; said Marianas Global fully expects Managaha Island to attract 1,000 tourists per day once renovations are complete.

Currently, Managaha Island averages 700 to 800 tourists a day as visitors from South Korea flock to the destination.

In the past, the island was voted one of the best diving and snorkeling spots in the world by travel fairs in Japan. Before the COVID-19 pandemic, around 1,000 individuals would visit Managaha Island per day, as per records from the Department of Public Lands. mbj