North Korea threats take toll on tourism; GVB reports 7,426 tour cancellations
Guam missed out on about $9.5 million in potential revenues last month due to thousands of tour cancellations at the height of North Korea’s threats to launch ballistic missiles aimed at the island, the Guam Visitors Bureau reported Wednesday.
While visitors continued to arrive in droves throughout the weeks marred by geopolitical tension, GVB’s post-crisis report showed 7,426 cancellations from travelers associated with package tours, school groups and Meetings, Incentives, Conventions and Exhibitions (MICE) groups for August. A majority of the cancellations came from Japan.
GVB’s marketing department also found that China Air cancelled its Guam-bound charter flight from Taiwan scheduled in October due to persistent threats from North Korea that discouraged Taiwanese travelers from visiting Guam.
Travel agents have also noticed bookings to Guam from Taiwan for November and December have slowed down, the bureau said.
Overall, GVB’s Research Department determined that arrivals have declined by nearly 1 percent in August when compared to the same month the previous year. “August serves a perfect example of the volatility of our tourism industry. While we still see strong growth in Korea, the alarming number of cancellations from Japan and other markets in the region has forced a slight decline to what was anticipated to be Guam’s strongest month in visitor arrivals,” said Acting Director of Research Nico Fujikawa.
“Guam’s reputation as a family-friendly destination is in jeopardy," said Director of Global Marketing Pilar Laguaña. "While the reality is that the island remains safe and protected, it’s hard to change the perception of visitors that now see Guam as risky. Unfortunately, we expect this trend to continue into the remaining months of the calendar year." On Wednesday, GVB President Nathan Denight slammed the legislature for underfunding the agency’s budget even though the Tourist Attraction Fund (TAF) has increased in recent years.
“When I started at the Guam Visitors Bureau, the TAF was at $22 million and through our collective efforts, we increased that to over $42 million this year,” Denight said. “For Fiscal Year 2018, lawmakers reduced GVB’s request by $3.9 million, despite the fact that GVB warned them that Guam is facing major challenges, and without these necessary funds, the bureau will not have the resources needed to increase visitor arrivals next year. You can’t keep underfunding tourism year after year and expect it to increase.”
Speaker Benjamin Cruz is unperturbed, saying GVB has made similar claims last year during the discussion of the 2017 budget. “’Give us all the TAF we ask for or tourism will collapse.’ Well, they didn’t get everything they asked for and for nearly every month except the one impacted by a nuclear threat, they have shattered tourism arrival records,” he said.
“The only people on Guam surprised that our arrival numbers went down during a nuclear missile crisis seem to work at GVB. For nearly ten days, Guam was the potential epicenter of World War III—that’s 240 hours of global press,” Cruz added.
He said the TAF is expected to collect $42 million in fiscal 2018. “That buys just 11.6 hours of prime time advertising on CNN. How does 11 hours of ad space on one network offset 240 sustained hours of global press panic? That’s math, not politics. No TAF appropriation I could write was going to fix that fact,” Cruz said.
During GVB’s budget presentation to the legislature, GVB officials highlighted the difficulties facing its core source markets of Japan, Korea, Taiwan, Hong Kong, Philippines and China.
Tourism officials said Guam already started seeing declines in all these markets besides Korea, and GVB needed these funds more than ever for effective sales and marketing programs and activities that generate visitor arrivals.
Cruz, however, said “if GVB’s success is entirely dependent on a budget that never stops growing, maybe we need to rethink how we run GVB.”
Denight, for his part, said if the Legislature expects to meet its revenue projections, senators must prioritize GVB, which he said generates revenues for the government. “Every $1 that GVB gets generates $77 to the island’s economy and $11 to the Government of Guam, which equates to $1.7 billion in economy sales and over $250 million in government.