The Northern Mariana Islands, a U.S territory in the Pacific, is struggling to revive its main tourism industry to pre-COVID levels three years after the lifting of travel restrictions, amid suspended direct flights from mainland China due to an air travel dispute with the United States.
While the number of tourists to Saipan and other islands in the self-governing territory is recovering, largely due to the return of South Korean visitors, its tourism authority reports that the number of visitors in fiscal 2023 was only 46 percent of the level seen in fiscal 2019, before the pandemic.
The situation, far from the level for sustaining the territory, is evident in Saipan, its administrative and commercial centre, where many shops and restaurants in its main tourism district of Garapan have shut down.
While arrivals from Japan, once the Northern Marianas’ top market, remain low due to a few direct flights, amid strong competition among travel destinations, the territory is trying to lure Japanese tourists, its officials said.
According to local media reports earlier this month, the Hotel Association of the Northern Mariana Islands said the average occupancy rate among 11 member hotels for August was 44.6 percent, a 16 percent decrease compared to 52.8 in the same period in 2023.
The percentage in August this year was half of the 88.8 percent for the same month in 2019, data from the association showed.
“While overall arrivals to the Marianas are higher so far this fiscal year compared to last, the last three months have seen a drop in both average occupancy and average room rates compared to 2023,” association chair Dennis Seo was quoted as saying in the reports.
The group has talked with the governor of the Northern Mariana Islands and three South Korean airlines regarding its concerns, including reduced flights during the off-season starting this month, according to the reports.
Judy Torres, deputy managing director of the Marianas Visitors Authority, emphasized the significance of tourism in an interview with Kyodo News, stating, “Tourism is the only industry here in the Marianas. That’s how important tourism is here.”
The number of tourists recovered to over 194,600 in fiscal 2023 from some 5,370 in fiscal 2021 and about 69,530 in fiscal 2022 thanks to the return of South Koreans, according to the MVA data.
During the last decade, South Korea and China rose to become the Northern Marianas’ top two sources of visitors, with many direct flights connecting the Asian countries and Saipan. Chinese had comprised about 40 percent of pre-pandemic visitor arrivals, according to the MVA.
Tourists from China have “great spending power,” Joshua Wise, vice president of the Saipan Chamber of Commerce, told an economic forum in May. They tend to buy luxury goods, stay in high-end hotels, dine lavishly and participate in optional tours, he said.
Meanwhile, South Korea as a market is “already saturated,” with limited potential for further growth, Wise said, adding that South Koreans generally spend less, as 80 percent of them travel with spouses and children, often choosing to stay and dine in their hotels.
During the pandemic, Chinese airlines stopped operating their services to the Northern Marianas and other parts of the United States. Even after China lifted travel restrictions in 2023, they have not resumed the flights to the territory, except those from Hong Kong, due to an air travel dispute with the United States.
In June 2020, Washington ordered the suspension of most Chinese passenger air carriers’ flights to and from the United States, citing Beijing’s earlier aviation policy that restricted U.S carriers from fully exercising their rights under the two countries’ civil air transport agreement.
While the U.S government has gradually increased the quota for Chinese carriers since May 2023, it maintains a weekly cap of 50 roundtrips by Chinese as well as American carriers, only one-third of over 150 weekly round trips allowed by each side in January 2020.
The territory’s Senate President Edith DeLeon Guerrero requested an exemption from the weekly cap in a letter to U.S. Transportation Secretary Pete Buttigieg in June, arguing that the entry of Chinese visitors is essential to offset the revenue losses.
The Northern Marianas registered only 4,309 visitors from China in fiscal 2023, equivalent to 2.3 percent of the fiscal 2019 level, due to a lack of direct flights, according to the MVA.
But Northern Mariana Islands Governor Arnold Palacios told Kyodo News in June, “We have to be mindful that we are Americans, and we have to be as much as possible consistent with federal policies in terms of relationships.”
“The geopolitical relationship just went south,” Palacios said regarding the United States and China.
Palacios also pointed to the U.S military activities in the Northern Marianas, including training exercises and runway development on the territory’s Tinian Island, as a factor.
“There’s no way…, I believe, that the U.S government will allow a direct flight from (mainland) China under the temperature we’re in.”
Facing such a tough situation, Palacios pushed for campaigns to lure Japanese travelers, noting the Northern Marianas’ historical ties with Japan that occupied the islands between 1914 and 1944.
Japan had previously been the territory’s largest market, beginning fiscal 1978, according to Torres. At the peak of the tourism industry in fiscal 1997, over 450,000 out of more than 760,000 visitors were from Japan owing to many direct flights then from Tokyo, Osaka and other Japanese cities.
But Japan Airlines withdrew from Saipan in 2005, reportedly due to low profits caused by falling airfares to the island, which had been popular as “cheap and close” overseas resort destination among Japanese. Because Delta Air Lines also stopped its nonstop service between Tokyo and Saipan in 2018, only United Airlines currently offers direct flights.
Amid harsh competition among travel destinations, Palacios said, “Our approach to marketing has to change…we’re kind of reinventing ourselves,” given the changing profile and behavior of tourists.
The Northern Marianas is holding such events as marathons and fishing tournaments to draw in participants from overseas and also looking into benefiting from foreign troops who could make a stopover in Saipan after exercises in other Pacific islands, he added.
Meanwhile, Torres noted that the Northern Marianas is also competing with islands in Japan’s southern Okinawa Prefecture in attracting Japanese tourists because of the weak yen.
Masanori Takahashi, president of Pacific Development Inc., a local operator of tours for Japanese, said Saipan used to be popular also as the destination of school trips to study the history of a World War II battle between Japanese and U.S. troops on the island.
Some schools in Japan began to plan to resume overseas trips following the pandemic, but United Airlines has been undecided about its direct flight service between Tokyo and Saipan after the second half of 2025, he said, causing such schools to choose other destinations. “Japanese young people do not know where Saipan is located,” he said, adding the Northern Marianas should get rid of the old image of being a cheap and close foreign resort and promote it with a new brand, such by utilising social media.