Legislature underfunds tourism industry for 3rd year in a row

GVB projects no tourism growth for FY18

(Tumon, Guam) Tourism supports one out of three jobs on Guam. With the livelihood of thousands of people on the line, reinvestment into Guam's top industry is needed now more than ever.

“Over the last several years, the legislature has underfunded GVB’s budget, all while the Tourist Attraction Fund (TAF) kept increasing. 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,” GVB President & CEO Nathan 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.”

During GVB’s budget presentation to the legislature, the Bureau highlighted the difficulties facing its core source markets of Japan, Korea, Taiwan, Hong Kong, Philippines, and China. Guam was already starting to see 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. This presentation was before the North Korea issue, which has become the most serious threat to Guam’s tourism industry in a decade. The island is now starting to see cancellations and a decrease in future bookings due to all negative media coverage.

“GVB understands resources are tight, but if the Legislature expects to meet its revenue projections, they must prioritize the agency that generates revenues for the Government,” added Denight. “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 revenue. Tourism can work for Guam, but not if you take it for granted.”

Local safety and maintenance programs at risk

“GVB’s projects positively affect every resident on Guam. For over a decade, GVB utilized a portion of its budget to maintain Guam’s roads, provide community grant funding for cultural groups and sports teams, and implement safety measures through our Visitor Safety Officer Program,” GVB Vice President Tony Muña, Jr. said. “This budget does not provide adequate funding to support these efforts. We may have to cut funding for projects like the island wide road maintenance program and cleaning of Hagåtña Bay to address serious safety concerns in Tumon. Pot holes and damaged sidewalks plague the tourist district and only adequate funding can fix these issues for the thousands of local employees, active runners and visitors that roam Pale San Vitores Road. In this age of social media and user-generated reviews, how can we attract new and repeat visits if we can’t get the resources needed to deliver the best experience to our visitors?”

GVB concerned with gradual decline of visitor arrivals

Ahead of the preliminary arrivals report for August 2017, which will be released next week, GVB’s Research Department has confirmed international civilian arrivals have declined by nearly 1% when compared to 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.

There have been 7,426 cancellations from individuals associated with package tours, school groups and Meetings, Incentives, Conventions and Exhibitions (MICE) groups for August. A majority of the cancellations came from Japan. The economic impact of these cancellations is an estimated $9.5 million dollar loss to Guam.

GVB’s Marketing Department has also confirmed China Air cancelled its scheduled charter flight to Guam from Taiwan in October due to the North Korea issue because customers are hesitant to come to Guam. Travel agents have also noticed bookings to Guam from Taiwan for November and December have slowed down.

“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."

GVB notes funds are available in the TAF to fully fund the Bureau, but are being used for non-tourism purposes. Without the full appropriation of its budget, GVB is not confident in reaching the TAF projections laid out in the budget bill or achieving any growth in tourism for the people of Guam.

Media Contact: JOSH TYQUIENGCO - Public Information Officer