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GVB strategic plan to add revenues to Guam

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THE implementation of the 2020 tourism strategic plan, now in its final draft, would facilitate an increase in tax revenues to the island, according to the Guam Visitors Bureau.

GVB chairman Mark Baldyga said the tourism sector currently contributes approximately $150 million in taxes to the island. If half of the objectives laid out in the plan are accomplished, he said another $100 million to $200 million in tax revenue per year can be realized by GovGuam.

Baldyga made the statement in a public hearing convened by Sen. Tina Muña-Barnes, chairperson of the legislative tourism committee.

GVB requested the Legislature to provide input to the final draft of the 2020 plan, which is the bureau's blueprint for transforming the island into a world-class, first-tier resort destination of choice.

Specifically, the long-term plan sets a goal for 2 million visitor arrivals by 2020 and pushes for market diversification and the promotion of local Chamorro culture among its objectives.

"If we pull this together, if we get the buy-in of the policymakers and the community, we really have something powerful," Baldyga said.

Upswing

The industry has been experiencing an upswing in visitor arrivals with GVB reporting that at the close of 2013, the number of arrivals have increased by 2 percent compared to 2012 figures.

Five days before the end of the year, GVB reported that the island welcomed about 25,767 more visitors than last year.

GVB also noted that there was a significant increase in visitors from Russia throughout the year. Monthly comparisons from 2012 as well as a yearly comparison show a rise in Russian arrivals.

However, the majority of visitors to the island still come from Japan. Although the number has decreased since 2012 by a slight 4 percent, Japan remains the No. 1 market for tourists coming to Guam. During the last two years, more than 1 million people visited Guam, and in 2013 well over 800,000 of them flew in from Japan.

Unfortunate cost

However, Baldyga noted that Guam's tourism growth over the past two decades came at an unfortunate cost since the island developed a reputation as a nearby bargain destination.

"Right now, we are competing on price alone in an increasingly competitive environment. So that is the bad news," he said during the public hearing.

Baldyga also noted some of the challenges faced by the industry, including the lack of true five-star quality rooms, dining and service.

He also noted the shortage in hotel rooms during peak season, emphasizing that between 100,000 to 200,000 potential visitors were turned away last year due to this shortage.

Furthermore, he said with Japan's aging population, the number of visitors from this particular market will be 10 to 15 percent fewer in 10 years.

Recent GVB figures indicate that the number of visitor arrivals from Japan has decreased since 2012 by a slight 4 percent. However, the country still remains the primary market for Guam’s tourists.

On the upside, Baldyga said the island has tremendously strong fundamentals, including Guam's proximity to Japan and Hawaii.

"We are safe. We are a U.S. territory. And we have world-class attractions like world-class scuba diving, marine sports and golf courses. We really need to focus on those fundamentals and build from there," Baldyga stressed.

"We expect that gradually, over a 10- or seven-year period of the strategic plan, we can slowly move the image of Guam from close and cheap where it is today, to value or quality for value," he added.

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