Guam Tourist Numbers Fall in 2008

Tourist numbers fall in 2008: GVB blames fuel prices, market crash
By Brett Kelman
Pacific Daily News
bmkelman@guampdn.com
January 7, 2009

Edwin Cruz believes that the familiar faces who used to visit him in Tumon during the holidays may have belonged to some of the 44,044 tourists who decided not to fly to Guam last fiscal year.

Cruz, 50, owns two beachside businesses that rent snorkels, fins, kayaks and paddleboats outside of major hotels on the sandy strip of Tumon Bay. Rental gear from Isa Aqua Sports and Isa Sports Club sprinkle the coast with pink, orange, yellow and white.

Every December -- during the busy season -- Cruz would recognize the same Japanese and Korean families who returned to Guam each winter to relax on the beach, play in the shallows and put money in his pockets.

This December, they didn't show up. All told, lots of tourists didn't show up, he said.

"This same time last year, it would have been busier. Absolutely busier, ... I wouldn't have time to talk right now." Cruz said, laughing.

Yesterday, Guam Visitors Bureau President Gerry Perez said that the high cost of fuel and the global market crash kept tourists, like many of Cruz's customers, away in 2008. Many airlines in Asia added fuel surcharges to their ticket prices, driving travel costs up while the economy was down.

According to the Guam Visitors Bureau fiscal 2008 annual report presented at the bureau's quarterly meeting yesterday, tourist arrivals dropped by about 3.6 percent last year. Tourism numbers were lagging only slightly behind for most of the year, but when the economy went sour during the fall, arrivals plummeted by 14 percent.

According to the report, 1,223,290 tourists arrived in fiscal 2007. In fiscal 2008, only 1,179,246 arrived. Since the average Japanese tourist spends about $635 during a stay on Guam, the local economy missed out on about $28 million of local spending.

Arrivals from Japan and Korea, Guam's largest markets, both dropped more than 5 percent, the report stated.

Cruz said he could feel the difference. If it were January of 2007, he wouldn't have a moment of peace. Ten tourists would be waiting to rent equipment the moment his businesses opened each morning.

Like owners of many struggling businesses that rely on tourists, Cruz said he started cutting the hours of his 11 employees last month to lessen his losses. He fights to keep morale high, but his workers have started dropping "hints" that their lives are rewritten by smaller paychecks, he said.

"This is not the end of the hardship, but we've got to just be prepared, you know? Start adjusting our lifestyles," he said. "Right now it's a day-by-day thing. You cannot predict a slow economy and you cannot predict how deep your pocket is. You've got to look at doing everything possible to survive."

But Perez can predict that the light at the end of the tunnel is still a year away.

He said yesterday that although airline fuel surcharges were slowly disappearing and the Japanese yen had regained much of its value, tourism numbers may not improve until 2010.

"Because the Japan economy is in such dire straits, it's negating the benefits of a stronger yen and lower fuel surcharge environment. In the case of Korea, the Korean won has deteriorated about 26-30 percent in terms of its value, ... that means that Guam, in won terms, is a much more expensive destination," he said.

Solutions
Perez said the Guam Visitors Bureau hoped that four initiatives that will begin this year would "soften the blow."

"We believe that there are structural conditions in the market -- they are mega-trends -- we can't stop them. But we can at least tactically address some opportunities to lessen the impact," Perez said.

Perez said the initiatives were:

The "Visit Guam" campaign, which will attract tourists through the Internet and connect them with travel agents;

Weekly sales promotions in shopping malls and department stores in Japan;

A campaign to entice large groups of tourists, such as businesses that want to reward their employees; and

Advertising using renowned Japanese celebrities, including recently retired Pittsburgh Pirates pitcher Masumi Kuwata.

Tourism could receive a big boost with the approval of a China visa waiver for Guam and the Commonwealth of the Northern Mariana Islands.

GVB announced yesterday that a delegation from the U.S. Department of Homeland Security will visit Guam and the CNMI next week to explain new regulations for visitors to the island.

The new regulations, which are set to take effect in July, will outline specific requirements under which visitors from any country will be allowed into Guam and the CNMI, the release said, without giving details about what the new regulations entail.

"This is good news because it means we should be able to attract new markets, such as China, and the Philippines for that matter, so long as certain requirements are met," GVB Chairman Tydingco said in a news release yesterday.

A waiver would make it easier for Chinese tourists to visit Guam and the CNMI than anyplace else in the United States, where they still are required to obtain non-immigrant visas.

Cruz thought the solution was simpler -- if you keep prices low, tourists will come back, he said.

More on the Move from Okinawa to Guam

Move to Guam could cost Marine Corps extra $465M a year
By David Allen, Stars and Stripes
Pacific edition, Friday, March 16, 2007

CAMP FOSTER, Okinawa — The move of some 8,000 Marines and their families from Okinawa to Guam by 2014 is expected to cost the Marine Corps an extra $465 million annually.

However, a recent inspector general’s report concluded that the Navy, Air Force and Marine Corps are not prepared for the increased annual costs resulting from the planned changes to the force structure in the Pacific.

The 14-page report, released Monday, is the culmination of a yearlong audit and interviews with military officials. It states the Marine Corps is the only branch so far to estimate how much it will cost yearly to move assets to Guam from Okinawa. However, the corps has not included the cost in its budget projections.

“The source of funds for the additional requirements (has) not been resolved between Headquarters, Marine Corps and the Department of the Navy,” the report states.

The Navy and Air Force also will incur additional annual costs by moving assets to Guam, but the services have not determined what they are, the report adds.

“If DOD and the Services do not include the projected increased annual funding requirements in the next Program Objective Memorandums for DFY 2009,” the report read, “the quality of life for servicemembers and their dependents and the readiness of U.S. forces in USPACOM may be adversely affected.”

The United States has reached agreements with Japan and South Korea for a major restructuring of U.S. forces in the Pacific. A reduction of some 12,500 U.S. Forces Korea personnel is expected to be complete by the end of 2008.

The United States and Japan agreed last May to replace Marine Corps Air Station Futenma with a new airfield on Camp Schwab and to close several other Marines bases on Okinawa. That would result in the move of 8,000 Marines and about 9,000 family members to Guam, with Japan picking up about $6 billion of the estimated $10.3 billion cost.

To help cover that cost, Japan officials are considering reducing host-nation support for U.S. forces remaining in Japan. Japan now pays about $3.03 billion a year to maintain U.S. forces and is expected to pay that much until 2008.

“DOD must recognize and plan for a possible substantial increase in funding requirements to support forces remaining in Japan if Japan reduces its host nation support,” the IG report states.

Besides the Marines, the Air Force plans to relocate about 3,500 servicemembers, civilian employees and their families to Guam from various locations, but has not estimated the increased budget requirements for the move, according to the report. Also, the Navy, which closed many facilities on Guam in 1993, will need an increase in funds to “refurbish and adequately maintain facilities” for the influx of Marines and airmen.