Northern Mariana Islands in need of hotel improvement

The Commonwealth of the Northern Mariana Islands (CNMI; Chamorro: Sankattan Siha Na Islas Marianas) is one of two insular areas that are Commonwealths of the United States; the other is Puerto Rico.

Northern Mariana Islands in need of hotel improvement

The Commonwealth of the Northern Mariana Islands (CNMI; Chamorro: Sankattan Siha Na Islas Marianas) is one of two insular areas that are Commonwealths of the United States; the other is Puerto Rico. It consists of fifteen islands in the western Pacific Ocean located about three-quarters of the way between Hawaii and the Philippines. The United States Census Bureau reports the total land area of all islands as 183.5 square miles (475.26 km2). As of the 2010 census, the Commonwealth has a population of 53,883, of which over 90% live on the island of Saipan. Of the fourteen other islands, only two – Tinian and Rota – are permanently inhabited.

The Commonwealth’s center of government is in the village of Capital Hill on Saipan. As the island is governed as a single municipality, most publications name Saipan as the Commonwealth’s capital.

Tourism is the most important industry in this U.S. territory.
The Saipan news reported that CNMI Governor Eloy S. Inos has disclosed that several hundred hotel rooms in the Commonwealth are not up to par with industry standards and must be renovated at once to ensure that these assets do not deteriorate.

This could be done, he said, by taking advantage of the CNMI State Small Business Credit Initiative program that allows refinancing and investments on island. This is a federal program administered by U.S. Department of Treasury that aims to strengthen state programs that support private financing to small businesses and small manufacturers.

Based on the latest government inventory, of the 3,000 hotel rooms on Saipan, only over 2,000 are operating while the rest need improvements.

“We have total inventory of around 3,000 rooms yet we’re only operating about 2,000 because there’s a good number of hotel rooms not up to par to offer them to tourists,” he said Wednesday.

Inos said the CNMI has reached a point of saturation on accommodation and the renovation of existing hotel rooms is one of its biggest challenges now.

In the last consecutive months, tourist arrivals have been showing double-digit growth, coupled by the high occupancy rates in hotels since the start of the fiscal year.

“That’s good news and we’re excited. We hope to see the stats to continue to grow. But of course we have limitations…and we’re reaching a point of saturation on the accommodation. Folks want to bring in more flights but we need to look at our accommodation…and that’s our big challenge now,” Inos told Saipan Tribune.

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The governor said that he has instructed the Marianas Visitors Authority to work with the Hotel Association of the Northern Mariana Islands on bringing the hundreds of unused rooms online.

“MVA is working with HANMI to try to bring them up to standards. We’d like to ask these folks to access the special money under the SBCDI program, which has US$13 million available for financing and investment,” according to Inos.

He said that 300 to 400 hotel rooms could probably be put online if the government could assist the owners with their renovations. SBCDI money, he said, is not limited to renovation work but could also be used in furnishing rooms.

The SBCDI program allows states and territories and eligible municipalities the opportunity to build upon or create successful models for state small business programs, including capital access programs and other credit support programs such as collateral support programs, loan participation programs, loan guarantee programs, and venture capital programs.

For the CNMI, the U.S. Treasury approved US$13.1 million to be utilized until March 2017. The amount is broken down as follows: US$4.6 million for loan purchase and US$8.5 million for cash collateral support program.

Besides helping with hotel rooms’ renovations, Inos disclosed that the government is also gearing up for the construction of more hotels on island. He announced that the Department of Public Lands recently closed bid on three major public lands. The governor said a review committee will immediately be formed to look at the proposals and expressed optimism that more hotels will be available next year.

“The thrust of these proposals is again to allow developers to build new hotels so we can get additional rooms.”

Inos plans to meet immediately with DPL secretary Pete Tenorio to get updates on these bid proposals.

“We would like to see the construction of new hotels because we’re needing additional rooms. We also need to upgrade the condition of [other] existing rooms to a level where we can really present them to tourists,” he said.

According to Inos, the government is pinning its hope on the reconstruction and reopening of two big hotels next year.

He was alluding to Palms Resort Saipan, which he said could probably be up and running again by end of 2014, and the reopening of Coral Ocean Point, which is expected to happen summer next year.

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