When Taiwan welcomed its 10 millionth visitor for 2015 on Dec. 20, there was plenty of fanfare but no surprise. Though it marked the first time the nation had reached the milestone, it had been widely expected following years of phenomenal growth in arrivals. The visitor in question, American Christopher Manuele, who was traveling with his Taiwanese-American wife Tina Manuele, was greeted by officials from the Tourism Bureau under the Ministry of Transportation and Communications, treated to a traditional lion dance and presented with gifts. The pair also met President Ma Ying-jeou (馬英九), who took the opportunity to highlight the remarkable expansion of Taiwan’s tourism industry in the more than seven years since he took office.
Much of the growth in the sector is the result of a 2008 cross-strait agreement that has led to millions of mainland Chinese sightseers joining package tours to Taiwan. In 2008, the country welcomed 3.85 million visitors, with more coming from Japan, at 1.09 million, than anywhere else. Last year, mainland Chinese accounted for 4.18 million of the nation’s 10.44 million arrivals, while the number of Japanese traveling to the nation totaled 1.63 million.
Between 2008 and 2015, the proportion of visitors stating “pleasure” as the main reason for their trip soared from 46.2 to 71.9 percent. In addition to total arrivals increasing 2.7-fold between 2007 and 2015, tourism industry foreign exchange revenues grew 2.6-fold to US$14.8 billion in the same period. Over the past several years, few nations have recorded more impressive inbound tourism growth than Taiwan.
Bike paths such as those at Taipei’s Dajia Riverside Park and Nantou’s Sun Moon Lake are gaining in popularity among visitors. (Photos by Huang Chung-hsin)
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 in East Asia such as mainland China, 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 predicted to grow faster than others.
According to the Executive Yuan, the number of conventional mainland Chinese package tours is expected to increase just 2.6 percent per year through 2018. Meanwhile, the growth target is 5.8 percent for Japanese; South Koreans; cruise passengers; meetings, incentives, conventions and exhibitions (MICE) visitors; and those on high-end packages. As part of its efforts to lift the overall quality of Taiwan’s tourism industry, the government aims to gradually reduce the number of low-cost package tours from mainland China, which critics say bring few real benefits.
While the number of mainland Chinese tour group visitors is limited to 5,000 per day, certain other categories of travelers from the mainland are exempt from the daily cap, including those who will explore indigenous areas, those arriving via the Republic of China’s outlying islands, and those joining high-quality package tours. In order to qualify for the latter designation, trips must meet Tourism Bureau requirements concerning the standard of accommodations, activities, meals and transportation.
The government’s growth targets are in line with the annual expansion of roughly 5 percent in Asia-Pacific tourism forecast by the U.N.’s World Tourism Organization for 2010 to 2030, but 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. “With government support and better infrastructure, it should be possible to double the number of international visitors within five to eight years.”
Teresa Kuo (郭嘉琪), a travel agent with 15 years’ experience, is especially optimistic regarding the cruise market. “Taiwan’s location, right in the middle of Asia, is a great advantage for developing this kind of tourism,” she says.
The nation’s major night markets, such as Liuhe in southern Taiwan’s Kaohsiung City, draw significant numbers of foreign tourists. (Photo by Chang Su-ching)
A major driver of growth in recent years has been the influx of individual mainland Chinese travelers. Prior to June 2011, mainland Chinese could only explore Taiwan in tour groups. Subsequently, regulations were altered to permit individual mainland Chinese travelers from certain cities to visit Taiwan, with a maximum of 5,000 such sightseers now allowed to enter the country each day. According to polls, these visitors adore Taiwan. Over 95 percent of those surveyed by global market research company Nielsen in March 2014 said they hoped to visit Taiwan again, and more than half planned to return within 12 months.
Since March 2015, residents of 47 cities in the mainland have been allowed to apply for entry permits as individual tourists. Of last year’s 10.44 million visitor arrivals, 1.33 million fell into this category, with another 1.92 million mainland Chinese coming on package tours.
Some individual mainland Chinese visitors backpack around Taiwan, but others travel in real style. “We have a half/half mix of business and leisure travelers from all over the world. In 2015, the number of Japanese guests fell 1 percent due to the depreciation of the yen. However, in the same period, we saw 2 percent growth in the number of Chinese guests,” says Gray, who attributes the increase in customers from the mainland to the rise in individual travelers.
He says that, compared to those on package tours, individual mainland Chinese visitors “have a lot more freedom to choose where they stay, and typically a bigger budget for accommodation. It’s a major opportunity for us.” Gray points out that no new internationally branded hotels opened in Taipei between 1999 and 2011, but five have been established 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.
First, he hopes that the rules governing the hiring of foreign employees can be adjusted. “Various jobs are very difficult to fill if we’re limited to local applicants,” he says. Second, he sees the proliferation of bed-and-breakfasts as “a great threat to Taiwan’s hospitality industry.”
Compared to hotels in cities such as Shanghai and Hong Kong, those in Taipei face greater competition from alternative forms of accommodation, including motels and rooms in private homes booked through online services such as Airbnb.com, says Joseph Lin (林俊銘), managing director at CBRE Taiwan, a branch of the largest real estate consultancy in the world. According to CBRE Taiwan, the number of hotel rooms in Taipei grew over 12 percent in 2015 to reach 34,057. CBRE expects that total to hit 41,039 in 2018. The Tourism Bureau recorded around 188,000 hotel rooms throughout Taiwan last year, up from 132,000 in 2007.
Lin points out that, because obtaining land for construction is difficult in Taipei, most new hotels with fewer than 100 guestrooms are in fact refitted office buildings. He has also noticed that for new hotels, a greater percentage of the initial investment is going into food and beverage and MICE facilities. “Hotels don’t want to put all their eggs in one basket,” he says. “There’s a realization that high occupancy rates aren’t easy to achieve.”
Another issue facing accommodation providers is the growing difficulty of recruiting qualified staff. “Because there’s been such rapid growth, there’s a shortage of experienced workers,” says Lin. “Some hotels have decided to extend their soft openings so they’ve more time to train employees.”
Taipei’s National Palace Museum is a must-see destination for international visitors. (Photo by Huang Chung-hsin)
Tourism Bureau statistics show that the number of people working full time in the sector rose from about 100,000 in 2007 to 190,000 last year. “Young people have witnessed the expansion of the tourism industry … so more and more of them are becoming interested in the sector,” comments Yeh Chien-mu (葉劍木), chairman of the Department of International Tourism Management at Tamkang University’s Lanyang Campus in the northeastern county of Yilan. “The industry needs people who have the right hard and soft skills. If it’s going to recruit these people, it has to offer good working environments and competitive salaries.”
In the opinion of one travel reporter, the influx of tourists has brought complications as well as profits and employment opportunities. “Because mainland Chinese travelers visit certain places such as Alishan, Sun Moon Lake and Yehliu Geopark in such huge numbers, some Taiwanese now shun those destinations,” says Joyuda Chung (鐘玉霞), who writes for Xinmedia.com. Rather than big-ticket investments like Shanchuan Bridge, a 262-meter-long pedestrian sightseeing bridge in a mountainous part of southern Taiwan’s Pingtung County, Chung would prefer to see more emphasis on long-term planning and the promotion of local cultures. “I think the profits would be more sustainable,” she says.
Kuo says the high cost of accommodation relative to local salaries as well as heavy traffic on holidays put many Taiwanese off exploring their own country, adding that many of these people instead use low-cost carriers (LCC) to travel to other Asian nations. The proliferation of LCCs flying to and from Taiwan has been a boon for both Taiwanese who enjoy vacationing overseas and foreigners wishing to visit the country.
Among the positive trends detected by Chung is the cohort of young people who, having turned their backs on mainstream careers and big-city lifestyles, now run tourism businesses in rural areas. “These micro-entrepreneurs can provide in-depth cultural and ecological experiences in their communities,” she says. “They have strong roots in local culture, yet seem to be creating a kind of hipsterish aesthetic that’s a major draw for Japanese, Korean and Southeast Asian travelers.”
Both Chung and Kuo single out for praise the Tourism Bureau-backed Taiwan Tourist Shuttle, a network of bus routes linking hundreds of cultural and scenic attractions in every part of the country. Chung describes the network as “convenient for both Taiwanese and foreign travelers.”
Chung, Lin and Yeh are concerned about the tourism industry’s dependence on the mainland Chinese market and therefore support efforts to entice travelers from other locations. According to Yeh, Taiwan’s advantages include “night markets, delicious food, religious tourism and natural scenery … We should preserve these assets because they contribute a lot to the industry. At the same time, Taiwan should create new products to enrich the range of options available to visitors.”
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Steven Crook is the author of Taiwan: The Bradt Travel Guide.
Copyright © 2016 by Steven Crook