Groups fail to tell CNMI public basic truth: Chinese travelers don’t have money to visit Saipan

The oft-touted yearning of the Marianas Visitors Authority, Saipan Chamber of Commerce, and Hotel Association of the NMI for Chinese tourists to Saipan is becoming more a pipe dream these groups have failed to acknowledge to the public. What these groups have failed to tell the CNMI public is this: Chinese travelers don’t have money to visit Saipan.

“Pressured by a prolonged property crisis, high unemployment and a gloomy outlook in the world’s second-biggest economy, Chinese consumers have become more frugal since the pandemic, prompting discount wars on everything from travel to cars, coffee and clothes,” a June report published in Reuters – Chinese outbound travel recovery lags due to costs, visa snags – says.

Translation: People in China who may have desired to vacation in Saipan no longer have the cash needed to make that happen.

The news of decreasing Chinese spending power has not daunted MVA’s strategy of trying to inaugurate direct flights from the People’s Republic of China in order to bring tourists to Saipan. It is a sort of ‘build it and they will come’ strategy that is fundamentally flawed. Airlines supply planes and seats for routes where there are traveler demands.

Those Chinese travelers are traveling. Just not outside of China.

“Eighteen months after China dropped strict zero-COVID policies and reopened its borders, the recovery in overseas travel is lagging behind market expectations and the shape of Chinese travel is changing, with a surge in domestic trips,” the Reuters report by Sophie Yu, Casey Hall, and Lisa Barrington states.

The post-pandemic recovery expected from Chinese markets has failed to materialize in much the same way hopes of full recovery from other markets – notably Japan and South Korea – have been dashed by national regulations and incentives that instead are promoting domestic travel. And much to the chagrin of MVA and the Guam Visitors Bureau, the economic stagnation affecting our chief source markets continues to cause dismal visitor arrivals.

That trend may continue or even worsen following this past weekend’s global rout of financial markets that began with the largest stock market plunge in Japan since October 1987.

But prior to the weekend rout, organizations like MVA, the chamber, and HANMI had access to global news and should have known the precarious financial situation facing the Chinese, who in 2023 overtook United States tourists as the top travel spenders. These have included well documented proof of declining spending power coinciding with a crashing housing and real estate market throughout Chinese cities.

According to the Reuters story:

“Liu Simin, vice president of the tourism branch of the China Society for Futures Studies research institute, forecasts China’s international travel might not recover to pre-pandemic levels for another five years.

“‘The recovery is a lot slower than expected,’ Liu said. ‘The devaluation of the Chinese yuan combined with inflation in the U.S. and Europe is a double blow.'”

None of these reported facts have surfaced in any of the aggressive literature and propaganda from MVA, the chamber, and HANMI, who have carried out a public relations campaign to pressure CNMI Governor Arnold Palacios to signal support for the restoration of a federal exemption called Annex VI. The exemption essentially would allow more direct flights between Saipan and the PRC.

“My general request of all of you is…please submit a letter to [U.S. Secretary of Transportation Pete Buttigieg] in support of Annex VI and support of EVS-TAP to [Department of Homeland Security Secretary Alejandro Mayorkas],” Tan Holdings’ Alex Sablan said in a general membership meeting of the Saipan Chamber of Commerce in February. “Every letter is beneficial…. There are negative comments to this effort, and we want to counter all negative comments with a deluge of positive for our economy.”

Mr. Sablan’s employer has direct business ties into the PRC, which is run by the Chinese Communist Party. His employer also owns one of only three general distribution newspapers in the Marianas.

At the June general membership meeting Mr. Sablan advocated for the federal change again, saying “We need immediate recovery now for all the hotel properties. We need to get Annex VI.”

The CNMI Republican Party also has attempted to malign the sitting governor (who defeated the Republicans’ beloved former governor Ralph Torres in a landslide victory nearly two years ago) with baseless claims of a burgeoning Chinese outbound travel market ready and waiting to tour the CNMI and flood the islands with money.

Regarding the Annex VI request and another proposal, party chairman Diego Benavente said “We believe that by supporting these initiatives, we can ensure opportunities for jobs and a stable economy.”

But the basis of those jobs and the money for a stable economy – according to this argument – is that Chinese tourists actually get on a plane and spend money in Saipan, Tinian, and Rota.

Contrary to what appears to be a shallow strategy or perhaps even a political blame plot by the so-called CNMI business leaders, Beijing doesn’t want that to happen. In fact, the CCP wants people to visit China.

“China has been making a huge push to attract foreign tourists in recent months. It has rolled out a visa-free program for dozens of countries, with the list still growing,” according to The New York Times Report What’s It Like Traveling to China These Days, written by Vivian Wang and published on July 31. “It has pledged to make it easier for visitors to pay for things, book hotels and get around.”

The CCP is going through extraordinary lengths to increase tourism to China. This has included visa-free 15 day trips to China from mostly Western European nations. Another 50 countries, including the United States, now are eligible for their citizens to visit China for three days visa-free on a transit scheme.

Why is China doing this, Ms. Wang asked in her article before answering, “Simply put: It needs money.”

“As China’s economy slows, its consumers have been hesitant to spend, fanning fears of deflation,” Ms. Wang wrote. “The government also wants to win back foreign investment, after many overseas companies were spooked by China’s long Covid lockdowns and tightening political environment. Visitors on the 15-day visa-free program are allowed not only to sight-see, but to conduct business.”

The propaganda campaign by the governor’s political opponents has more life in it than the desire or affordability of the Chinese outbound traveler to visit Saipan.