Gaynor Dumat-ol Daleno

gdumat-ol@guampdn.com

At the rate Guam’s visitor industry has grown over the past few years, the island would fall short of its goal to reach 2 million tourists a year, starting in 2020, a tourism economist stated Friday.

Chris Pike, director of impact studies for consulting firm Tourism Economics, projected that Guam would still see significant growth in tourism – from 1.41 million tourists last year to 1.85 million in 2020.

Pike made the presentation at the Guam Visitors Bureau’s quarterly general membership meeting Friday, the same day GVB was scheduled to make a case for a budget of more than $22 million in fiscal 2017 before island lawmakers.

As Pike presented a long-term look at the island's tourism industry, the governor's office announced that Guam welcomed 118,373 visitors last month, a 17.1 percent increase over the previous year, and the best June in Guam’s tourism history, thanks in large part to the Festival of Pacific Arts, which Guam hosted.

“We have opened up our home to so many guests in recent months and showcased the beauty of our island and our people to the world in different ways," said Lt. Gov. Ray Tenorio.

South Korean arrivals increased 48 percent last month compared to the same month last year. The increase in South Korean arrivals helped to offset a continuing slide in Japan arrivals, which saw a slight decrease of 2.3 percent, according to GVB's preliminary figures for June.

To achieve 2 million tourists a year, Guam would need its Japan market to increase the number of visitor arrivals by 232,482, and the South Korean market to send 157,452 additional guests to the island, according to Pike’s analysis.

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In addition, Guam would need to create enough interest from a third significant source of international tourists to see an additional increase of 200,000 tourists to reach that 2 million-a-year mark, according to Pike’s projection.

It's up to Guam to decide where that third market would come from, he said.

There's a nearly 600,000 gap between Guam's total visitor arrivals as of the end of last year and the 2 million-a-year goal.

Still, Guam’s current visitor arrivals figure is significant, and translates into a $1.6 billion a year industry for Guam, generating $3,000 in tourism-related sales every minute.

Guam tourism’s growth created 450 new jobs last year, for a total of 14,833 tourism jobs in the local economy.

One in three Guam jobs exists because of the tourism industry, Pike said.

Every commercial jet that lands in Guam with tourists supports 2.5 jobs in the local economy, according to Pike.

And if island residents see tourists sight-seeing, shopping, dining or doing other touristy activities, each of those visitors literally represents $1,000 in cash infusion into the local economy based on their on-island spending, according to Pike.

Japan market continues slide

Before Pike’s presentation, GVB General Manager Nathan Denight gave an update that overall, Guam’s visitor arrivals increased more than 10 percent as of June this year, primarily because of a 40 percent increase in South Korean tourist arrivals.

Without the surge in South Korean visitor arrivals, Guam’s tourism would have seen an overall slide because the No.1 source of Guam-bound tourists – Japan – slipped more than 5 percent so far this year.

The Japan market still is the biggest source of tourists for Guam, but the market has shrunk, now comprising 49 percent of the island’s visitor arrivals, a steep drop from the Japan market's more than 80 percent size of the total tourism size more than a decade ago.

Guam didn't cause the declining number of Japanese visitor arrivals, according to Pike.

Japanese consumers have seen a drop in incomes, and at the same, are finding U.S.-dollar-based vacation destinations, such as Guam, more expensive because of the weakened yen, he said.

Pike said the U.S. dollar has strengthened about 20 percent against the value of the yen, and that’s how much the cost of travel has increased to Japanese consumers if they chose to visit Guam or Hawaii or elsewhere in the United States.

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The weakened yen has resulted in Japanese tourists cutting back on shopping, Pike said.

Before, Japanese tourists would buy designer bags as gifts to relatives, but these days, they’ve had to cut back on shopping to the extent that a cousin may simply get a postcard rather than a Hermés bag, Pike said.

Milton Morinaga, managing director of PHR Ken Micronesia, a subsidiary of Japan-based Ken Corp., which owns several Guam hotels, said Japanese consumers are finding more things to do for domestic vacations, and that's part of the reason for the dip in Guam's Japanese arrivals.

Guam’s goal for 2 million tourists in a year was unveiled two years ago, in part with the hope that the federal government would allow visa-free travel of tourists from mainland China.

Guam and the Northern Marianas share a visa-waiver program, but the U.S. Department of Homeland Security allowed the visa-free travel of tourists from mainland China only if they’re entering the Northern Marianas.

Guam government officials' recurring requests, for more than a decade now, for the federal government to grant Chinese tourists visa-free entry into Guam hasn’t yielded a favorable outcome.

The federal government did allow Guam to welcome Russian tourists without having to go through a travel visa application process, but U.S. economic sanctions against Russia and the suspension of charter flights from Russia to Guam caused that part of Guam’s visitor market to nearly dry up.

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