CNMI eyes block agreements with air carriers to guarantee seat purchases
- Admin
- 7 minutes ago
- 3 min read
By Mar-Vic Cagurangan
In a bid to stabilize the descending air service to the Northern Marianas, the local hotel industry has begun negotiating block agreements with air carriers for guaranteed seat purchases.
The Hotel Association of the Northern Mariana Islands has taken the initiative amid the steady decline in visitor arrivals to the CNMI, leaving several hotels empty.
The hotel association has reported a 14.87 percent average occupancy rate among 11 member hotels for September 2025, showing a 35 percent dip from 43.02 percent in September 2024, and the lowest since 1992–excluding the Covid years when world travel was on pause.
The industry attributed the static market to "fierce flight competition from the primary source market of Korea, an unfavorable currency exchange rate, an oversupply of air seats to neighboring Guam, a global shortage of new aircraft due to Boeing delivery delays and loss of destination competitiveness."
“It is a perfect storm of factors working against our destination right now – from currency exchange, to airline issues, to geopolitical relations,” said Dennis Seo, chairman of the hotel organization.
The flight service's downward trend is forecast to continue throughout the fiscal year.
“HANMI is working closely with the Marianas Visitors Authority, airlines, travel agencies, and the administration to keep every air seat we can and to keep our doors open," Seo said.
The association said talks with air carriers and the MVA are ongoing to pursue hard block agreements, which would guarantee a seat capacity for a specific period.
The agreement “may involve financial penalties for unsold seats or offering special benefits to consumers in Korea who purchase Saipan travel products,” HANMI said. “Negotiations for winter seasonal charter flights from Busan-Saipan route are still underway to bring twice weekly flights during the period.”
Hong Kong Airlines resumed twice-weekly flights from Hong Kong on Sept. 21.
Meanwhile, the Hong Kong-based carrier Greater Bay Airlines is considering starting twice-weekly flights from Hong Kong in the winter 2025-2026 season.
Korea, the CNMI's top source market, has a more challenging outlook, considering the impact of an oversupply of air seats to Guam starting in August.
The Korea Fair Trade Commission's 2024 approval of the Korean Air-Asiana Airlines merger in late 2024 set strict requirements, such as a 90 percent seat supply mandate on "routes deemed important," and Guam falls in this category.
As a result, Korean Air and its LCC affiliate Jin Air began doubling flights on the Seoul Incheon-Guam route in August, eventually operating six times a day to meet the mandate.
“The merger mandates are having a devastating effect on rates, making travel to Guam from Korea much, much cheaper than travel to Saipan, even as low as $180 to $250 round-trip,” Seo said.
He said the hotel association will endorse the Korean Community of Saipan's plans to petition the Korean Fair Trade Commission for a reprieve "due to the devastating effect this is having on local businesses."
The scant air service to the CNMI has taken its toll on the hotel industry, which is forced to cut rates due to low occupancy.
“A total of 9,203 of 64,905 available room nights sold during September 2025 compared to 27,065 of 62,915 available rooms sold in September 2024,” HANMI said.
The average room rate was $113.69, a drop from $130.88 last September and the lowest September room rate in 12 years.
“Our hotels understand the financial situation of the government and the difficult decisions that had to be made with this year’s budget, as we have also had to reduce operations, reduce hours and let people go. It’s very difficult,”
Seo said. “Stabilizing air service is the top priority of all stakeholders right now.
Subscribe to
our digital
monthly edition