Tuesday, April 5, 2016

Tourist Magnet, Part 1 (Taiwan Review)

When the ten millionth foreign visitor to arrive in Taiwan in 2015 landed on December 20, there was fanfare but no surprise. Americans Christopher and Tina Manuele were greeted by officials from the Ministry of Transportation and Communications Tourism Bureau, treated to a traditional lion dance, and presented with gifts. Later they met President Ma Ying-jeou, who took the opportunity to highlight the steady yet remarkable expansion of Taiwan’s tourism industry in the seven years and seven months since he took office. 

Much of the growth is the result of a 2008 agreement between Taipei and Beijing that has led to millions of Chinese sightseers joining package tours (PTs) to Taiwan.

In 2008, Taiwan welcomed 3.85 million foreign visitors, with more (just under 1.09 million) coming from Japan than anywhere else. Of 2011’s 6.09 million arrivals, 1.78 million were mainland Chinese and 1.29 million Japanese. The total for 2013 was 8.02 million, of whom 2.87 million (36 percent) were from the PRC, and 1.42 million from Japan (18 percent). The number of Hong Kong and Macao residents heading to Taiwan that year reached 1.18 million (15 percent). 

Between 2008 and 2015 the proportion of foreign arrivals stating “pleasure” as the main reason for their trip soared from 46.2 percent to 71.9 percent. In addition to total arrivals increasing 2.7-fold between 2007 and 2015, tourist industry foreign-exchange revenues grew 2.6-fold to US$14.8 billion in the same period. Over the past decade, very few countries have seen inbound tourism grow faster than Taiwan.

The Executive Yuan’s 2015-2018 Tourism Action Plan recognizes the industry’s vulnerability to external economic and political factors, and explains that “while our efforts will continue to focus on major markets such as mainland China and Northeast Asia, we will actively seek tourists from Southeast Asia, Muslim countries, and other emerging markets.”

The Plan predicts international arrivals will grow at an annual average of 4.5 percent over the next few years. However, in line with the stated aim of "optimizing quality, enhancing value,” some market segments are expected to grow faster than others. 

The number of ordinary mainland Chinese PTs is expected to grow just 2.6 percent per year. For Japanese, South Koreans, cruise passengers, MICE (meetings, incentives, conferences and exhibitions) visitors, and those on high-end packages, the target is 5.8 percent. 

As part of its efforts to lift the overall quality of Taiwan’s tourism industry, the bureau is gradually reducing the number of “cheap and cheerful” PTs from mainland China which critics say bring noise and congestion but few real benefits. The daily limit on leisure arrivals from the mainland of 5,000 still applies, but since May 2015, half of this quota has been reserved for “quality tours.” At the same time, certain visitors are exempt from the cap. Among the latter are those who will explore indigenous areas, those arriving via the ROC’s outlying islands, and tourists who have booked five-star hotels for at least two nights out of every three.

Teresa Kuo, a travel agent with 15 years experience, is especially optimistic regarding the cruise market, saying: “Taiwan’s location, right in the middle in Asia, is a great advantage for developing this kind of tourism.”

The bureau’s projections are in line with the 4 to 5 percent annual expansion in Asia Pacific tourism forecast by the UN’s World Tourism Organization for 2010 to 2030, but well below what some industry figures believe is possible.

“Taiwan has incredible potential and is an under-recognized gem, especially outside the region,” says Cary Gray, general manager of W Taipei, a 405-room luxury hotel in the heart of Taiwan’s capital (see lower photo). “With government support and better infrastructure, it should be possible to double the number of international visitors within five to eight years.”

Kuo says that, while bilingual signage around major tourist attractions is now much improved, she still notices inconsistent spellings for place names. “The English-friendly environment should be extended to all kinds of transportation, and even food stands,” she says.

Until June 2011, PRC citizens could only explore Taiwan as members of a tour group. Abolishing this requirement added a new acronym (FIT, “free independent traveler”) to local argot, and gave rise to various expectations in Taiwan. 

Entrepreneurs in places seldom visited by mainland groups anticipated an influx. Some Taiwanese who have no direct economic interest expressed the hope FITs would go home with a keener appreciation of Taiwan’s democratic freedoms, and a more nuanced view of cross-strait relations. Whether or not their attitudes change, independent mainland Chinese tourists appear to adore Taiwan. Over 95 percent of FITs surveyed by global market-research company Nielsen in March 2014 said they hoped to visit Taiwan again, and more than half planned to revisit within 12 months.

Since March 2015, residents of 47 cities in the PRC have been allowed to apply for FIT entry permits. Of last year’s 10.44 million international arrivals, 1.33 million fell into this category. Another 1.92 million mainlanders came on PTs. All in all, 4.18 million people made journeys from the PRC to Taiwan in 2015, including 91 percent of the 66,210 non-Taiwanese who listed “medical treatment” as the principal purpose of their trip. 

Some FITs backpack around Taiwan, but others travel in real style.  

“We have a half/half mix of business visitors and leisure travelers from all over the world. In 2015, the number of Japanese guests fell 1 percent due to depreciation of the yen. However, in the same period we saw a 2 percent growth in the number of Chinese guests, thanks to the expansion of the FIT program,” says W Taipei’s Gray. 

Gray says that, compared to Chinese on PTs, “Chinese FITs have a lot more freedom to choose where they stay, and typically a bigger budget for accommodation. It’s a major opportunity for us.”


He points out that no new internationally-branded hotels opened in Taipei between 1999 and 2011, but five have been added in the past five years. He believes there is still room for new hotels in Taiwan, but would like the authorities to help the sector in two ways. Firstly, he hopes the rules which govern the hiring of foreign employees can be adjusted. “Various jobs are very difficult to fill if we’re limited to local applicants,” he says.

Secondly, he sees the proliferation of B&Bs as “a great threat to Taiwan’s hospitality industry, because many have been allowed to operate despite minimal fire-prevention and other safety systems. But I believe this issue will be addressed in the near future, hopefully before a disaster occurs.”

As with my recent article about solar energy in Taiwan, I've decided to post here a version of this article that's substantially longer than the one in the magazine's print and online editions. To read Part 2, click on this link.