THE Governor’s Council of Economic Advisers on Wednesday hosted the presentation of a plan to sustainably develop the Northern Marianas into a multi-island integrated destination.
Authored by hospitality and travel consultant Darlena Zhai, the study also shows the key role that Saipan plays in this plan.
The presentation began with an assessment of the current and historical situation of the CNMI, and what it means for the destination, showed an inventory of local hotels, natural sights and amenities, and a SWOT analysis of the CNMI tourism industry, identifying its strengths, weaknesses, opportunities and threats.
An inventory of local hotels showed a combined room count of over 2,500 rooms at Grandvrio Resort Saipan, Fiesta Resort & Spa Saipan, Hyatt Regency Saipan, Pacific Islands Club Saipan, Saipan World Resort, Kanoa Resort Saipan, Aqua Resort Club, Aquarius Beach Tower, Laolao Bay Golf and Resort, and Century Hotel.
The inventory noted that Grandvrio Resort Saipan is a large property with a big range in its rooms product in terms of quality positioning; Fiesta REsort & Spa Saipan is to be refurbished and rebranded as Crowne Plaza Resort next year; Hyatt Regency Saipan’s lease expires this year and it is still undetermined whether it will be renewed; Kensington Hotel Saipan is the newest property with the most modern facilities; PIC Saipan recently completed extensive renovations; Saipan World Resort has no major plans announced; Kanoa Resort Saipan is in the process of securing a global brand; Aqua Resort Club is an inland property; Aquarius Beach Tower is a shoreline property with limited non-room facilities; Laolao Bay Golf and Resort has no changes announced; and Century Hotel is also an inland property.
Furthermore, the inventory shows an assessment of four additional hotels with a combined room count of over 1,000 rooms: Coral Ocean Golf Resort, Mariana Resort, Imperial Pacific, and Honest Profit.
Coral Ocean Golf Resort was closed for renovations after Super Typhoon Yutu; Mariana Resort is closed and a request for proposal for a new leaseholder has been issued; Imperial Pacific has stopped construction and its hotel structure remains at the exterior stage; and Honest Profit’s hotel structure is incomplete, but has a permit that requires its completion by April of next year.
On a global scale, Saipan is ranked 12th as a top destination to visit, taking into account its average daily rate of $148, 80% occupancy, and revenue generated per available room of $118.
Data shows that between 2013 and 2019, Saipan had an average daily rate of $136.71, and 84.7% average occupancy.
In the presentation, the identified strengths of Saipan included its ongoing promotional efforts, which are well-known in the regional wholesale segment, a good inventory of sizable properties on great shoreline sites, many existing tourism amenities, and key attractions and resorts achieving noteworthy reviews despite its older facilities.
The identified weaknesses of Saipan were its dated accommodation products in crucial need of revamping and rejuvenation, a number of developments located on prime sites that are currently non-operational, a lack of strong destination identity, a lack of internationally established brands, and a limited local workforce.
Opportunities identified on Saipan include the presence of untapped submarkets within the Asia-Pacific region, upcoming lease renewals of several key shoreline inventory presenting ideal opportunities to introduce global brands, as well as new opportunities that could encourage the retention of the younger generation.
However, the study notes that without a significant upgrade, it will be highly challenging for Saipan to be competitive.
Moreover, there is comparatively less development in facilities and projects that benefit both tourists and the local community, and potential undesirable establishments could negatively impact the destination as well as the quality of life for its residents.
Issues with sustainable development include the importance of preservation, avoiding overtourism, ensuring quality of developments, and future-proofing.
The study shows prime and opportune timing for post-Covid travel, safe destinations, fewer and longer trips, and the variety of experiences in one destination.
Saipan: ‘The improved hub’
Citing Denarau, Fiji as an example, transforming Saipan into a high-quality, lively resort destination with upgraded facilities, amenities, and a natural charm lost to many overdeveloped islands would require upgrading and branding existing facilities; redeveloping and cleaning unfinished or disused developments; and ensuring quality for any new development.
Quality can be shown through having an international brand, vetting the legitimacy of developers or investors, assessing whether a project is realistic to execute in terms of its scale, future market demand potential, and labor requirements; and whether as a product, an entity will sustainably and meaningfully add to what the CNMI has to offer.
Fiji tourism data in 2019 showed visitor arrivals of 894,389 and over $1 billion of total tourism spending, taking into account that 52% of visitors were free independent travelers and 42% were repeat visitors.
Between 2010 and 2019, Fiji averaged about 747,258 visitors a year, or roughly 62,271 visitors a month.
An overall inventory of the number of rooms in Saipan shows that inclusive of non-operational key properties, it has about 4,100 rooms.
The room night demand for the HANMI set of properties relative to the visitor arrival ratio has been on a downward trend going from 1.4 in 2016 to 1.3 in 2018.
This downward trend could be due to the proliferation of smaller properties or unregistered accommodation outside of this set.
Looking into future growth, even a 30% growth would still require about 700,000 arrivals to get to 75% occupancy.
In order to achieve this growth, Saipan would need to improve its attractions and accommodations to prolong the average length of a visitor’s stay, as well as limit the increase of supply or other accommodations outside of the hotels counted in this study.
If Saipan were to have a lot more rooms than what is included in this study, then it would need significantly more visitors, else it would experience lower occupancy.
As for attractions on Saipan, there are a few signature attractions that are key revenue generators.
For the sake of sustainable and active management, Saipan would need to keep areas that are more resident-centric, consider actively managing additional sites, preserve the environment, and use revenue towards management and preservation efforts.
The study uses Marpi as an example of a signature integrated attraction because it showcases the beauty and heritage of the Marianas and it meaningfully adds to the destination.
Furthermore, the plan proposes that amenities not just be touristic but for everyone to enjoy, including residents.
This would include the revitalization of Garapan and beyond, community event spaces, offering high street and off-price retailers and food and beverage outlets; and providing means to get around the island, such as bicycles and shuttles within a year from now.
It is projected that Saipan would generate about $150 to $200 per person per night, compared to $200 to $250 a night in branded shoreline resorts on Guam and $170 to $200 a night in Denarau, Fiji.
A target of 700,000 overnight visitor arrivals, four days of average length of stay, 75% average occupancy, and 4,000 rooms has been set for Saipan.
Tinian: ‘The ideal day-trip getaway’
Tinian was presented as the ideal day-trip getaway, taking into consideration its large planned military component that is less ideal for traditional tourism development, its vicinity to Saipan allowing for opportunities to develop day-trip attractions, and its ideal adding to the activities component of the CNMI.
This would require access, such as scheduled ferry service and flights from Saipan, convenient schedules that are critical to facilitate day trips, and additional creative access options such as helicopters and seasonal fishing excursions from Saipan to Tinian.
In the immediate term, the ideal day-trip business model would return to fundamentals, revitalize and build upon Tinian’s existing natural and cultural assets; a guest base of hundreds of thousands of guests arriving via Saipan to the Marianas each year, packaging with the round-trip ferry; access to all three signature attractions: the House of Taga, Exploration Trails at Punta Carolina, and Taga Beach; make Tinian the Festival Island of the Marianas, supplemented with great local cuisine and sporting events; option to visit North Field depending on access at the time; and an option to join Goat Island Adventures.
In the longer term, Tinian would generate more overnight demand as quality attractions making it a popular day-trip option could lead to several visitors wishing to spend the night.
This would trigger the development of smaller, owner-operated facilities.
As sufficient demand builds up, investors could be looking at sizable resort developments.
There would potentially be an upper mid-tier, branded beachfront resort, and an overall fun, all-inclusive concept with great recreational facilities and food and beverage options.
Projects recommended for Tinian are reasonable to execute given that they revolve around the utilization of existing resources.
It is projected that Tinian would generate $100 to $150 per person per night, compared to the $100 to $150 rate in mid-market branded resorts in Southeast Asia.
A target of 25,000 overnight visitor arrivals has been set for Tinian.
Rota: ‘The niche and beautiful’
As for Rota, the goal is to preserve the pristine environment and charms of its small community while improving its island economy and the lives of its residents by hosting sustainable, responsible, and community-based tourism.
The island is identified in the study as the perfect setting for “return to nature” experiences, ensuring that its natural beauty remains pristine to sustain its uniqueness.
The study recommends that Rota be a nature reserve park, a premium market centered around preservation.
Luxury is rarely available at typical resort destinations, so possible activities on Rota could be a Living Forest, Marine Preservation, and Living in Harmony with Nature.
The study also recommends a heritage bike trail to connect most of the iconic lookout areas, cultural sites, historical relics, and scenic spots on Rota.
The study proposes that this would be the best way to experience all that Rota has to offer, while encouraging exploration at a more leisurely pace could result in a longer length of stay for visitors.
However, Rota must first utilize and clean up key disused structures or uncompleted developments within a year from now.
The study shows that realistically, projects on Rota are small in scale, and as such, can be executed in the short to medium term, or over the next two years.
It is projected that Rota will bring in about $200 to $300 a night for small resorts with unique settings for villas.
A target of 22,000 overnight visitor arrivals, three and a half days of average length of stay, 70% average occupancy, and 150 rooms has been set for Rota.
Northern Islands: ‘The ultimate travel adventure’
The Northern Islands are identified as the true luxury of discovery, showcasing the signature experience and true uniqueness of the Marianas, and exploring the potential for permanent facilities in the future.
The medium-term goal proposes a liveaboard adventure, or living aboard a yacht or vessel, dining on the sandy beaches, exploring the land, and glamping.
Current issues show that there are no daytime scheduled flights to key cities in Asia, Guam, and Saipan; no scheduled ferry service with Saipan; and no propeller air taxi flight on demand.
In three to five years, when tourism achieves full recovery and air access reaches a stable level where sophisticated, luxury-tier travelers could get to the Marianas from various hubs in Asia on daytime flights, the development of liveaboard adventure experiences is projected to be in place for the Northern Islands within this timeframe.
Five to 10 years from now, when some of the Northern Islands are rehabituated, it is recommended that market opportunities for small, nature-based resort properties be explored, such as small, niche properties on Alamagan to supplement agriculture.
In terms of branding and target rate positioning, the Northern Islands is projected to bring in $300 per person per night for liveaboard premium tropical islands.
A target of less than 1,000 overnight visitor arrivals, four days of average length of stay, 90% average occupancy, and 10 rooms has been set for the Northern Islands.
The study presented potential itineraries for visiting the Marianas, including a Saipan-only four- or five-night stay; four-night stay on Saipan and two-night stay on Rota; four-night stay on Saipan and one-night stay on Tinian; five-night stay on Rota and one-night stay on Saipan; five-night stay in the Northern Islands and two-night stay on Saipan; and four-night stay in the Northern Islands and three-night stay on Rota.