Premier Wu Den-yih announced on June 1 that Taiwan will begin allowing Chinese tourists to visit the island individually from the end of June. The initial trial period is only open to 500 tourists daily from Beijing, Shanghai and Xiamen. They will be permitted to remain in Taiwan for seven days, with an extension up to 15 days in total.
Direct benefits to businesses
The Economic Daily News reported that the arrival of 90,000 individual Chinese tourists will pump added revenue into Taiwan’s tourism industry during the second half of this year. Based on an average spending of US$249 per person per day, and an average stay of seven days, these new visitors will bring in an additional income totaling NT$4.5 billion (US$150 million).
The arrival of 500 independent mainland tourists per day means 180,000 people a year and an additional NT$10 billion (US$333 million) to Taiwan. Also, cross-strait flights will be increased from 370 flights per week to 500. Although these benefits are not as large as those brought by group tourism, more Taiwanese businesses will benefit directly since these individuals will not be limited to fixed destinations.
Such visitors will not be confined to group tours and set routes. They can venture out, allowing taxi drivers to be the initial beneficiaries. Restaurants and lodgings will also see increased business, since those tourists who can afford to eat and stay at high-end establishments can now do so, benefiting smaller-scale businesses.
The United Evening News reported Chen Yan-I, deputy general manager of Ctrip, China’s largest travel site, said individual tourists will usher in a brighter future, because Taiwanese and Chinese people are of the same ethnicity, speak a common language, and share cultural and gastronomic tastes, meaning that more mainlanders are expected to travel to Taiwan than go to Hong Kong. Chen noted that middle-aged individual tourists are quite different from older travelers who are usually found in tour group. Individual tourists are likely to be from the well-off middle classes, and most of them have not been to Taiwan before.
Though most Taiwanese people are looking forward to welcoming individual visitors from China, they are also aware of the added risks involved, such as visitors overstaying their visas. The Liberty Times reported that Chen Chi-mai of the opposition Democratic Progressive Party, pointed out that Chinese “tourists” have brought issues of illegal immigration and illegal employment to many countries. In 2006, there were 190,000 cases of illegal Chinese immigrants in the United States. Records in Japan show the detention of 32,600 illegal Chinese immigrants up to 2005. Chen is urging the government to have a coordinated set of supporting measures ready before letting individual travelers from China into Taiwan.
Trajectory of Taiwan’s tourism potential
Taiwan reached a tourism mile-stone when in 1976 the one millionth-tourist arrived on the island. The second millionth came in 1989. Sixteen year later in 2005 the third millionth arrived. The pace has sped up in recent years with the addition of Chinese visitors. In less than four years, the four million mark was reached in 2009. In 2010 alone, 1.5 million tourists visited Taiwan, a 26.7 percent growth over the previous year, adding NT$270 billion (US$9 billion) in tourist foreign exchange income for Taiwan.
The Global View monthly reported that the Madrid-based United Nations World Tourism Organization (UNWTO) predicted an average annual growth rate of 5-7 percent for tourism in the Asia-Pacific region, but Taiwan has far surpassed that forecast with a growth rate that is four times higher. The Pacific Asia Travel Association (PATA) rated Taiwan as one of the fastest growth countries for overseas tourists in Northeast Asia in 2010, far outperforming countries like South Korea, Hong Kong, and China.
The most important reason for Taiwan’s substantial tourist growth is that Taiwan has successfully developed the resources of different international tourists. Reviewing the statistics of international travelers to Taiwan over the last two years, growth occurred from almost every country. The number of Malaysians arriving, who now no longer need a visa to visit Taiwan, grew by 70 percent. Even the most difficult European markets saw an unprecedented growth of 3.16 percent, the magazine reported.
Hotel construction spurred
Since the start of Chinese group tourism in July 2008, the Want Daily reported that there have been 3.4 million Chinese people visiting Taiwan, bringing a total of NT$195.8 billion (US$6.5 billion) in foreign exchange earnings. The United Evening News reported that most Chinese tourists do not necessarily understand the real Taiwan since they are restricted to organized tours, which often offer only low quality, low cost travel. So far, only individual visitors who come to Taiwan for academic or cultural exchanges feel that they “love their Taiwan experience.” What has impressed them most is the kind and hospitable welcome that they have received from the Taiwanese people, and the free and relaxed atmosphere they experience.
In 2010 alone, there were 1.63 million Chinese visits to the island, an increase of 67.75 percent over the previous year, and substantially more than the 1.08 million Japanese tourists, the second largest source of overseas visitors to Taiwan. Chinese arrivals have replaced those from Japan as the leading source of Taiwan tourists. On average, three out of every 10 visitors to Taiwan is now from China.
Starting from this year, the daily quota for Chinese group tourists has increased from 3,000 to 4,000. This year, it is estimated that the number of Chinese tourists arriving on the island will hit two million for the first time. According to data from the Directorate-General of Budget, Accounting and Statistics, the contribution of Chinese tourists to Taiwan’s GDP in 2010 was NT$65 billion (US$2.1 billion), boosting the island growth by 0.28 percent.
Taiwan’s projected tourism increase has spurred hotel construction in the last two years. A total of 26 hotels invested NT$2.8 billion (US$93 million) in remodeling and upgrading their facilities. Also, there will be about 14 newly constructed hotels in operation in two years. In six years time, the total number of rooms at tourist hotels in Taiwan will have increased from 21,095 to 27,747.
According to the Economic Daily News, there are almost 40 hotel investment projects currently underway, including both foreign and domestic investment. Even optimistic Chinese investors are seeing the growth potential and are making a contribution to this growth. It is estimated that the total investment will reach NT$100 billion (US$3.33 billion) and is expected to bring 40,000 new jobs.
More effort in attracting international visitors
Ng Chee Theam, vice president of Millennium & Copthorne Hotels plc in Singapore, said in an interview with the Global View that inbound visitors to Singapore number 12 million a year while those to Taiwan number 5.6 million. This means there is a lot of room for growth in Taiwan’s market. Besides, Taiwan government policy favors travel and tourism, which is greatly beneficial to hotel business. He added, “But I don’t think Taiwan needs to put too much effort towards drawing Chinese tourists. As a matter of fact, even without promotion, the Chinese will still come. Taiwan should treat Chinese tourists as domestic visitors and spend more effort in attracting international visitors because Taiwan has big potential for international tourism.”
The Global View reported last year Taiwan’s foreign exchange income contributed by international tourists totaled NT$270 billion (US$9 billion), plus NT$240 billion (US$8 billion) created by domestic travel, a total of at least NT$500 billion (US$16.7 billion). This year this has the potential to reach NT$550 billion (US$18.3 billion).
Janice Seh-jen Lai, director general of Taiwan’s Tourism Bureau, said the arrival of Chinese tourists is the key to opening the door to other countries. Before, when Taiwan was closed to Chinese visitors, many international airlines ignored or canceled their flights to Taiwan, limiting Taiwan’s access to the international travel markets. With the arrival of Chinese visitors, many international airlines will have confidence in Taiwan’s investment environment and will launch flights to Taiwan, solving the problem of attracting foreign tourists, Lai told the Global View.
