Tourism recovery at risk as T’way exits, PAL delays return

The Marianas Visitors Authority warned lawmakers that the CNMI’s tourism recovery could face further setbacks following the closure of T’way Air’s Saipan office and Philippine Airlines’ decision to postpone its planned return to the Commonwealth until October, as legislators debated whether to restore $960,235.74 in tobacco settlement funds earmarked for tourism stabilization and marketing.

“Airline seat capacity is down 66% from 2018. Visitor arrivals are at historic lows. And just last month, T-Way closed its Saipan office, reminding us how fragile our air service is. Once an airline leaves, it's even harder and more expensive to bring them back,” acting managing director Judy C. Torres told lawmakers during the public comment portion of the House & Senate Conference Committee Meeting held last June 8 on Capitol Hill

Later during questioning by lawmakers, Torres confirmed that Philippine Airlines has postponed its planned return to Saipan until October.

The proposed $960,235.74 appropriation, identified by Gov. David M. Apatang as additional available funds from the tobacco settlement, would be used primarily for airline service stabilization and activation of MVA’s “Far From Ordinary” destination branding campaign.

Torres urged lawmakers not to reduce the funding request, arguing that tourism remains the CNMI’s economic lifeline.

“I must respectfully emphasize that reducing the appropriation in House Bill 24-96 will not save the Commonwealth money. It will cost the Commonwealth money,” she said. “Tourism is not an expense. It is the engine that funds our recovery.”

She said tourism dollars circulate throughout the economy, supporting hotels, restaurants, retail businesses, transportation companies, construction firms, and ultimately government revenues needed to fund public services and recovery efforts.

“The $960,235 in House Bill 24-96 directly addresses two urgent priorities. First is airline service stabilization. Airline service is our lifeline,” Torres said. “Without stable air access, there is no tourism recovery, no economic recovery, and no path to rebuild our revenue base.”

According to Torres, the funding would help MVA support existing airline routes, conduct joint promotions with carriers, and launch the full activation of the authority’s “Far From Ordinary” destination branding campaign.

“If travelers do not hear about the Marianas, they will not come. If they do not know what makes us different or distinct compared to our other destinations, they will not come,” she said.

During questioning by Senate Fiscal Affairs Committee chair Sen. Jude U. Hofschneider, Torres confirmed that PAL has again delayed its long-awaited return to the CNMI.

“Philippine Airlines has postponed their resumption to October later on this year,” Torres said.

She also told lawmakers that T’way’s exit leaves Jeju Air as the sole South Korean carrier serving the CNMI.

“With the exit of T-Way, we're only going to have one airline, and that's Jeju,” Torres said, noting that the Commonwealth is losing roughly 5,000 airline seats per month from the Korean market.

Hofschneider said the developments underscore his concerns about the future of the tourism sector.

“I just wanted to voice out that I am deeply concerned with the recovery of tourism,” he said.

Torres said fuel costs are becoming another major challenge for airlines and destinations alike.

“One of the issues that we're facing is fuel costs. Fuel costs is rising right now and it's being passed on to the consumers,” she said. “So we need to make sure that we balance the value of choosing the Marianas with that additional cost.”

To offset those challenges, MVA plans to use the requested funding for airline support initiatives, destination marketing, and a “welcome back” campaign designed to improve visitor experiences as tourism gradually recovers.

Following the discussion, House Ways and Means Committee chair Rep. John Paul P. Sablan told Marianas Press that the conference committee had not yet reached a final decision.

“We are going to reconvene tomorrow, June 9, at 1pm and discuss the MVA funding,” Sablan said.