Drop-in Chinese arrivals prompts Taiwanese hoteliers to diversify markets, Michael Taylor writes
Travellers from China have accounted for a major share of Taiwan’s tourism arrivals ever since a deal was struck to allow mainland tourists to visit the island as members of tourist groups in 2008.
According to Taiwan’s Mainland Affairs Council, arrivals from China reached a peak of 3.4 million travellers in 2015.
Since the election of Tsai-Ing-wen as president of Taiwan in January of 2016, however, cross-straits relations have become strained.
As a result, the number of mainland tourists travelling to Taiwan in tour groups has taken a nose dive, falling by 30 per cent between April and July.
While the number of independent mainland travellers rose by 13 per cent, they still accounted for only a small fraction of mainland travellers.
Fortunately, the number of arrivals from other source markets has offset the drop in Chinese tourists.
According to the Tourism Bureau, Republic of China (Taiwan), there was 9 per cent growth in international arrivals in the first six months of 2016, compared to the same period last year. As a result, overall arrivals increased by 1 per cent, thanks to an increasing number of travellers visiting Taiwan from Hong Kong, Macau, Japan, South Korea and other countries. An increase in the number of domestic travellers was another factor.
“Though we see a decline in the number of Chinese travellers this year, our business has remained for the most part positive”, says Gary Lee, assistant marcom director, W Taipei.
“Despite the challenges presented by a decrease in demand, we still see potential in Q4. Our focus remains on developing the Southeast Asian market as well as investing carefully in the right marketing channels.”
According to Melvin Yang, hotel manager of the 538-room Regent Taipei, the drop in visitors from the mainland has been offset by an increase in visitors from Korea and Japan. As a result, there was a 5 per cent increase in revenue during the first two quarters of this year.
“The business market is deteriorating while the leisure market is growing,” Yang says. “We are expecting more FIT travellers [free independent travellers] and more Southeast Asian guests.”
Over-supply of rooms
One of the biggest challenges faced by Taiwanese hoteliers is an over-supply of rooms.
“We respond by focusing more on cultivating relationships with returning guests and strengthening our VIP programmes,” Yang says.
“Also, the airport express has not been completed yet – so it may be troublesome to travel from the airport to the Taipei city centre. At Regent Taipei, we offer exclusive transportation and ensure our guests are aware of all the transportation options.”
Preferred Hotels & Resorts entered the Taiwanese market in 2000 with the opening of its first member hotel, the Palais de Chine, a five-star property with 286 rooms. The Grand Victoria Hotel joined the group in 2015.
“Although the number of visitors from China has been declining, the 286-room Palais de Chine has not been seriously affected because only a small percentage of its guests are from the mainland,” says Ivy Liu, general manager.
“With a good location right in the heart of the city’s transportation hubs the hotel is popular with both leisure and business visitors.”
Despite the challenges facing Taiwan’s hospitality industry, there are opportunities for those that think outside the box.
“We will offer different packages for different markets,” Liu says. “We will have specific offers for female travellers, multi-generational family travel, etc., to create a different experience from competitors’ hotels.”
Adds Yang: “Digital and social media channels are great ways for us to interact directly with our guests and to extend our brand image. Also, our hotel group owns and operates properties across almost all major Taiwanese cities and tourist locations – we see an opportunity to create a holistic travel itinerary for guests who would like to travel throughout the country with us.”
Tourism action plan
As more and more local and international brands enter the Taiwanese market or expand their holdings on the island, an oversupply of rooms seems imminent. In response, the Taiwanese Government has begun implementation of the Taiwan’s 2015-2018 Tourism Action Plan. Measures will include vigorous marketing activities that will target international cruise lines and the MICE sector “while seeking to further develop such key tourist markets as China, the Muslim countries, Europe, the United States and Southeast Asia.” Included will be an easing of visa restrictions for citizens of the eight Association of Southeast Asian Nations (ASEAN) that do not currently have visa free access. “Citizens of Thailand and Brunei now enjoy visa-free access to Taiwan,” says Valerie Cheung, regional director for North Asia, Preferred Hotels & Resorts. “Nationals from Cambodia, Indonesia, the Philippines, Vietnam, Myanmar, and Laos who have received visas to Australia, Canada, the Schengen area in Europe, Japan, New Zealand, South Korea, the UK, or the US over the past 10 years will also be allowed to enter Taiwan visa-free after registering online.” It is estimated that the easing of visa restrictions for these eight ASEAN countries will lead to an increase in Southeast Asian visitor arrivals for 2016 of at least 20 per cent.