Guam is an unincorporated territory in the U.S. under the administration and jurisdiction of the office of Insular Affairs, U.S. Department of the Interior. Because of its strategic location as the westernmost U.S. territory, Guam plays a crucial role in the U.S. military defense of the Pacific region. Guam's economy is greatly influenced by the health of the Asian economies, primarily Japan, Korea, and China.
The much anticipated Record of Decision was released in September 2010, solidifying the actions that the U.S. military will carry out on Guam for the arrival of approximately 8,600 Marines and their dependents from Okinawa. The island, covering an area of 212 square miles, is now clearly on its way toward unprecedented construction of roads, power plants, sewer and general infrastructure to prepare for the development of several thousand military homes and training facilities. Japan will fund approximately $1.3 billion in infrastructure upgrades while the U.S. Department of Defense will fund $560 million in 2011. The final sticker price is estimated to be over $15 billion, which translates to $100 million per capita. The military buildup is attracting contractors, suppliers and laborers from throughout the U.S. and international markets. It is anticipated that the population of Guam may increase by as much as 25% during this period.
Tourism continues to be Guam's main economic driver. While Japan is the primary source of visitors, Chinese tourist arrivals continue to increase and are expected to soon surpass Korean visitors to Guam. Statistics show that Guam is now the most popular travel destination for the Chinese due to the island's proximity, affordability and, more importantly, the accessibility of the visitor visas. The merger of Continental Airlines and United Airlines is expected to increase the number and frequency of flights to the island.
Guam is one of the few bright spots in the U.S. economy benefiting from its strategic proximity to the booming Asian markets and the implementation of U.S.-Japan defense initiatives. The need for warehouses, office, residential and retail properties is generating increased deal flows and widespread speculative investments.