Senate fiscal committee hears Marianas Visitors Authority ask for millions to stabilize air service and boost tourism

The Senate Fiscal Affairs Committee convened in the Senate chamber in August 2025 to review the administration’s FY2026 budget projections and to hear detailed presentations from the Marianas Visitors Authority (MVA), the Hotel Association of the Northern Mariana Islands (HANMI), and the Commonwealth Ports Authority (CPA) about tourism and airline service challenges affecting hotel‑occupancy tax revenue.

The session matters because revenue from the hotel‑occupancy tax funds a large share of MVA’s work promoting the Marianas; unstable air service and weak demand are already reducing collections and, officials said, threaten hotel operations and local jobs if not addressed before the new fiscal year begins Oct. 1.

Committee chairman and members opened the hearing by noting that the governor submitted a FY2026 proposal in April and that the House transmitted House Concurrent Resolution No. 24‑2 (HCR 24‑2) — which defines general revenue and approves resources for FY2026 under Article 3, Section 9(a) of the Commonwealth constitution and 1 CMC Division 7 — to the Senate on July 15, 2025. Secretary of Finance Tracy B. Norida told the committee that “the governor’s proposal remains the same” and that finance staff were prepared to answer questions on revenue categories.

MVA acting managing director Judy Torres summarized three funding scenarios MVA developed for FY2026 and described the external and local factors driving the authority’s request. She said exchange‑rate shifts (notably a weaker Japanese yen and Korean won) and global aircraft delivery delays have reduced travel demand and constrained airlines’ ability to sustain routes. Torres also cited the December 2024 Jeju Air crash and subsequent safety regulatory changes in Korea as causes of cancellations and instability on Korea‑Saipan routes.

Torres told senators MVA’s three scenarios are: a high‑investment scenario (described by MVA at roughly $10.9 million) that the authority said would allow aggressive offshore marketing, negotiations with carriers, product development and interisland promotion; a mid‑level scenario (about $6.4 million) that would sustain core marketing and programs but leave limited capacity for new initiatives and continued airline uncertainty; and a low‑funding scenario that relies solely on projected hotel‑occupancy tax receipts and would force cuts to offshore marketing, cancellation or scaling back of events and reductions in MVA staffing. Torres said MVA estimated visitor arrivals, hotel‑occupancy tax collections and related net receipts under each scenario and asked the legislature to identify a funding source if the committee prefers the higher‑investment options.

HANMI president Dennis So presented hotel association data showing year‑to‑date declines in occupancy and average daily rates compared with 2024; he stressed the local sector’s heavy dependence on Korean routes and said some hotels are operating at a loss. So said the association supports MVA’s larger scenario as the best path to restore demand and stabilize flights.

CPA acting executive director Frederick Panglinen said CPA has implemented rate reductions to help airlines and has been tapping seaport funds to sustain relief programs. He and other officials reiterated that airline profitability — not only local fees — is the main driver of route suspensions; one airline told presenters that a Saipan flight could operate at a roughly $50,000 loss per flight on low‑demand rotations, a figure agencies said has driven requests for subsidies or guaranteed seat purchases.

Senators pressed presenters for data and for actionable steps. Senator Manny Gregory Castro urged agencies to use existing visitor survey data to identify product‑level reasons travelers choose other destinations and to pursue low‑cost ways to improve the visitor experience (for example, better event calendars, clearer arrival transfers and use of social media content). Several senators suggested coordinating more closely with municipal governments, public land lessees and private hotel owners to bring closed or partially opened properties back online and to leverage local events for marketing.

Secretary Norida told the committee the government faces a structural shortfall and that finance is exploring options other than general‑fund subsidies to help MVA meet its goals. She outlined potential near‑term steps the administration could consider, including suspending certain earmarks of MVA trust fund receipts or temporarily exempting MVA from specified fees to direct more net revenue into marketing and airline negotiations; she said those are options the administration could bring forward for legislative consideration.

Committee action and next steps: the committee adopted today’s agenda by voice vote at the start of the session (motion offered by Senator Magnolia Donald; seconded by Senator Cruz). The committee recessed with plans to reconvene at 1:30 p.m. for a continuation focused on HCR 24‑2 and the FY2026 revenue resolution. Members asked MVA, HANMI and CPA to provide supporting data and links to offshore marketing assets, and they asked the administration for follow‑up on potential fund‑reallocation options.

The hearing record shows broad agreement on one point: local tourism recovery depends on a combination of restored air service, product development and investment in promotion. Agencies and industry groups told senators that without additional, timely investment or a compensating federal support package, they expect continued season‑to‑season flight instability, lower visitor arrivals and additional pressure on hotels and tourism jobs.

Votes at a glance: Motion to adopt today’s meeting agenda — mover: Senator Magnolia Donald; second: Senator Cruz; outcome: adopted by voice vote.