CNMI's tourism-dependent economy continues to face significant challenges. Even as it recovers from the substantial losses caused by COVID-19, external factors further reduce tourist arrivals. KPRG’s Bryan Manabat reports how this has led to business closures across the archipelago, and the latest steps taken to address it.
TRANSCRIPT
BYLINE/BRYAN MANABAT: Last month, an environmental engineering firm in the CNMI shut down… one of a dozen that closed in April. Over a hundred businesses have folded since January 2024. The reason? A fluctuating dollar, escalating geopolitical tensions, and severely limited flight options. These hinder tourist arrivals in the CNMI.
JAMIKA TAIJERON 1: Things actually might get worse.
MANABAT: That’s Jamika Taijeron. She’s the executive director of Marianas Visitors Authority, or M-V-A.
TAIJERON: Tourism is more than just numbers. It's about people, it's about jobs, it's about culture, community, pride and opportunity.
MANABAT: Because of its proximity to Asia, CNMI’s main tourism markets are Japan, Korea, and China. But the dismal tourist arrival numbers have yet to match pre-pandemic levels. According to MVA three-fourths of the CNMI's economy is derived from tourism.
TAIJERON: We cannot grow tourism numbers unless we get more flights and when we talk to our existing airline partners, they’re saying they don’t have the equipment. MVA must also prove that our destination has a demand, and that demand would be larger than any other large city.
MANABAT: Despite the challenges, Taijeron isn’t giving up. She says there’s still momentum for CNMI to improve itself as a prime destination.
PYONG CHUL CHAE: Actually it's my second time, it's a good place especially with child. Safety is good. Resort facility is good, and beach is beautiful.
MANABAT: Pyong Chul Chae with his wife and daughter is staying at Crowne Plaza Resort Saipan for a four day vacation. He says they will come back for more good food experience, great weather, beautiful beaches, and relaxing places.
CHUL CHAE: Beautiful weather and delicious food, restaurant is good. Later, I have a plan to visit again. And it's not far from Korea, four hours. That's why I always consider and choose Saipan and Guam.
MANABAT: Compounding the issues are delays in approving CNMI’s Electronic Vitality and Security Travel Authorization program… Also known as E-V-S-TAP. This allows mainland Chinese tourists to visit the CNMI without a visa. Homeland Security has not given a reason why there’s a delay. As a result, Hong Kong Airlines has suspended its flights to Saipan. Governor Arnold Palacios took action.
ARNOLD PALACIOS: I immediately reached out to Homeland Security, CBP, and even the White House when I was made aware of this. So obviously with the situation, with geopolitical situation in our Asia Pacific area, we are feeling the pinch.
MANABAT: He says most of the issues are external, over which the CNMI has no control. This includes changes in the global tourism dynamics. He directed MVA to focus on what it can do.
PALACIOS: We can do something about it, like improving our destination, looking for additional airlifts, because that’s the main issue.
MANABAT: Now, the federal government may be listening. President Trump has signaled a willingness to resume 902 consultations. These are formal talks between the CNMI and Washington about its political status and economic needs. Palacios hopes the talks will also help with infrastructure and skilled labor. For KPRG’s Current Perspectives, I’m Bryan Manabat, in Saipan.
KPRG News transcripts are created on a rush deadline by a KPRG contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of KPRG's programming is the audio record.
