By Jayvee Vallejera and Bryan Manabat
Saipan—Welcome to 2025, when the price of a dozen eggs is now an economic indicator. With bird flu spreading across the United States, egg supplies have fallen and prices are soaring and many groceries have already run out of eggs to sell.
The CNMI—one of the more remote outposts of the American empire—is not immune. One of the bigger groceries on Saipan no longer has eggs. Just before running out of these items, a dozen of their extra-large eggs sold for $8.99; a 30-piece tray was $17.99. A couple of months ago, a dozen extra-large eggs cost only $5.99.
The price of eggs is just a sliver of the bigger picture—and the perfect storm that is battering the CNMI economy.
Already weakened by a sputtering tourism industry that has not recovered from the Covid-19 pandemic, the recent closure of three legacy companies presented yet another symptom that the CNMI economy is nowhere near stable.
Saipan’s longest-running international hotel brand, the Hyatt Regency Saipan, shut down in June last year after 43 years in business, leaving 146 employees jobless.
The pressures of global challenges in the travel industry will also result in the closure of the high-end luxury retail store T Galleria Duty-Free Shop Saipan on April 30. According to DFS, the decision to close Saipan operations after four decades of operation is “part of a broader corporate strategy to streamline its global operations and refocus on key profitable markets in Asia.”
The Saipan Tribune, a long-running newspaper in the CNMI, closed last year after nearly 30 years, affecting more than 20 jobs.
That these legacy businesses survived the catastrophic collapse of the garment industry from 2005 to 2009 shows how deeply troubling this current dip in the CNMI economy is. At that time, the CNMI still had the tourism industry to lean on. This time it is the tourism industry that’s on the ropes, and these closures are just symptoms of a bigger problem.
Tourism is the CNMI’s only remaining industry and the main driver of the local economy. Its dismal performance drove the CNMI economy into such a wretched state.
Fewer tourists means fewer buyers. So businesses that rely on tourists put up the shutters after failing to see glimmers of hope in the months ahead. To think that T Galleria had just finished renovating its Garapan mall in April 2022.
There was also the self-inflicted problem that the Palacios administration caused to hobble the industry.
China, Korea and Japan used to be the CNMI’s main source markets. Soon after taking office, Gov. Arnold Palacios unilaterally decided to focus the CNMI’s tourism efforts on South Korea and Japan. This initiative has not borne fruit yet and arrival numbers from both countries remain dismal.
Despite optimistic forecasts in late 2024, the touted recovery has not happened. The Marianas Visitors Authority reports that tourist arrivals to the CNMI actually decreased in January by 26 percent.
“Our current arrival figures are not acceptable and not sufficient to maintain profitable hotel occupancy levels, healthy tax revenues, and an overall healthy economy,” said Christopher Concepcion, outgoing MVA managing director.
He thinks the best way to revive the sluggish travel industry is for the CNMI to capitalize on its unique “economic tools” to create demand and increase tourist arrivals.
“The CNMI must accept all tourists from all over the world who are willing to come. Our message to the market must reflect that,” Concepcion said. “We have unique tools given to us by the federal government for us to build our economy, which other states and territories envy.”
He was referring to the CNMI visa waiver program that allows tourists from China, Australia, Brunei, Hong Kong, Japan, Malaysia, Nauru, New Zealand, Papua New Guinea, South Korea, Singapore, Taiwan and the United Kingdom to visit the CNMI without a visa.
“The Hotel Association of the Northern Mariana Islands, the Saipan Chamber of Commerce and the MVA have been saying in the past couple of years that we need to balance our tourism source markets so that one market is not too dominant, and that essentially means we need a strong third-source market,” Concepcion said.
The CNMI’s tourism industry has traditionally relied on three main markets: Japan, South Korea and China. But it is now down to just two: Japan and South Korea.
In its heyday, the Japanese market made up over 70 percent of the CNMI’s visitors, with over 380,000 arrivals annually. That market today is a pale comparison, made worse by a weak yen that makes it expensive for Japanese travelers to go to U.S. destinations like the CNMI.
South Korea then became the dominant and primary tourism market for the CNMI, but a recent Jeju Airlines crash led to the cancellation of charter flights to the CNMI. Arrivals from South Korea dropped by 29 percent in January.
Arrival numbers from China remain weak after the Covid-19 pandemic and have not recovered yet. Also, direct flights from mainland China have been canceled and have not resumed.
Faced with this scenario, the CNMI should make use of existing tools to rebuild the economy, Concepcion said.
“Once we’ve reached an economic level that allows our government to breathe and generate sufficient tax revenue to provide the services we expect, and once businesses start flourishing again, then we can start to be picky with what markets we put our effort into,” he added.
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