Major hotels in the Northern Marianas have been operating with less than half of their rooms being occupied year-round. How long can they stay afloat if things do not improve fast?

Hotel Association of the Northern Mariana Islands Chair, Dennis Seo commented on the state of the NMI industry, saying, “It is, simply speaking, survival mode for everybody.”

The Hotel Association of the Northern Mariana Islands’ 11 hotel members reported a 38% average occupancy rate in 2023.

Seo said hotels start to make a profit at 80%.

The Vice Chair, Ivan Quichocho added, “If air service remains where it is with no foreseeable improvement in air seats to be coming in, it's pretty, pretty sure that hotel properties on the island will have to take drastic measures because they can't continue fielding huge losses. I mean, huge losses.”

Quichocho said the industry is slowly bleeding as operating and maintaining buildings are costly.

He said that the last time they saw numbers reach the 80% threshold was in 2019 -- and that was in the aftermath of Typhoon Yutu before the pandemic. The numbers have shaken every sector of the economy.

“When you have hotels at 34% occupancy year round, the wholesalers selling the pork belly the lobster tails the this the that they're not taking orders. So the containers arriving at the port is down. That also affects the coffers,” said Quichocho.

Currently, South Korea dominates the market. They admit, there needs to be at least 3 vibrant source markets to cushion the NMI’s fall. But there is hope with the return of Hong Kong Airlines later this month.

Seo added, “We have to trim our operation in terms of our amenities and we also have to cue the work hours of our employees, which means that the general overall experience of those tourists will be decreased.”

And Quichocho said, “Not one property is feasting year-round. So everybody is fielding losses. So it is very difficult to answer the question of what happens next, because it is really about the owners of these hotels and their appetite to continue shoveling out cash losses.”