Taiwan’s Tourism Industry: Coming of Age

With nearly 10 million international visitors last year, Taiwan is now establishing itself as a major tourism destination. Growth in tourist arrivals has been strong ever since Taiwan began allowing large numbers of mainland Chinese citizens to visit the island in 2008, and last year Chinese visitors accounted for 40% of the total. But going forward the emphasis will be as much on quantity as quality, which will require an upgrading of the whole tourism infrastructure.  

For a snapshot of the pros and cons of Taiwan’s burgeoning tourism industry, look no further than Sun Moon Lake in Nantou County. On a bluff overlooking the lake on a storm-tossed day, the flow of Chinese visitors is unabated. They pose for photos at a statuary rock that bears the lake’s name, buy overpriced fruit from a streetside vendor, and pour down the steps toward the ferries that dock and depart with clockwork regularity.

It’s efficient and profitable, a pretty picture framed by one of the country’s “eight natural wonders” – its national parks.

The negative side is that prices for accommodations, boat rides, and even meals have risen in response to the demand from the Chinese tour groups, and the hordes of mainland tourists leave little space for other visitors. (That said, beyond the lake there are numerous tranquil locations that offer quaint homestays, as well as trekking, cycling, and sightseeing options to please both domestic and international travellers.)

As Taiwan seeks to reinvent itself once more, looking for alternatives to its traditional reliance on exports to drive the economy, the promotion of tourism is among the forms of domestic consumption receiving increasing attention. The Taiwan Tourism Bureau faces the delicate balancing act of increasing visitor numbers, particularly of Chinese travelers, yet ensuring it is done in a way that assures stable and sustainable development of the tourism sector.

A decade ago fewer than 3 million tourists came to Taiwan each year, but the figure last year reached 9.91 million, giving Taiwan a conspicuous place on the international tourism map for the first time. Based on the 6.69 million foreign visitors in 2013, for example, Taipei last year made it onto Euromonitor International’s list of the top 20 most visited cities in the world, ranking in 19th place. Some optimists believe the country could accommodate 20 or 30 million annual arrivals in a decade or so.

Pauline Leung, co-chair of AmCham Taipei’s Travel & Tourism Committee and chief executive officer of Compass Public Relations, points to Hong Kong and Macao as examples of what Taiwan could achieve. She notes that the two nearby markets attracted 27.8 and 14.6 million visitors, respectively, in 2014. In terms of annual earnings from tourism, according to the United Nations’ World Tourism Organization (UNWTO), Hong Kong, at US$38.4 billion, and Macau with US$50.8 billion are among the world’s top 10 markets. In contrast, Taiwan’s international tourism receipts were US$14.6 billion last year.

Born in Hong Kong but a long-term Taiwan resident with experience in the travel sector, Leung says she sees no reason why her adopted home country cannot do as well as or even better, making tourism a mainstay of the economy while avoiding the inevitable pitfalls. Such drawbacks include the well-publicized problems Hong Kong has encountered in opening its floodgates to mainland visitors: higher prices for local residents, social and political pressures, and the over-proliferation of jewelry and luxury-goods stores at the expense of other types of retail outlets.

Leung compares Taiwan to Shakespeare’s Cleopatra, famed for her beauty and infinite variety. “Taiwan is bigger than Hong Kong or Macau and we can offer more than they do,” she says. “We have mountains, great cities and villages, different styles of living, lovely guesthouses, stunning scenery, and a great culture. Within a week you can go around Taiwan and see practically everything. So what’s the problem with 20 million or even 30 million tourists a year?”

The Tourism Bureau raises Taiwan's profile in the region through the "Time for Taiwan" travel fairs like the one seen here in the Philippines.
The Tourism Bureau raises Taiwan’s profile in the region through the “Time for Taiwan” travel fairs like the one seen here in the Philippines.

Opportunity vs. challenge

As UNWTO points out in its Tourism Highlights 2015 report, most international visitors come from within the destination’s own region. In Taiwan’s case, that neighborhood includes China, now the world’s number-one source of international travelers. Last year, the amount of overseas expenditure by those travelers rose by 27% to reach US$165 billion.

The challenge will be how to manage that opportunity to bring the most favorable results. Last year, a total of 3.98 million Chinese tourists came to Taiwan, a full 40% of the incoming visitors. In principle, Taiwan now wishes to limit growth in the number of ordinary Chinese tour-group members, in order to concentrate on the more lucrative sector of free individual travelers (FITs) and high-net-worth group visitors. The idea did not quite work out last year, however, as tour-group operators pushed to allow any unused quota on a given day to remain available for future applications. Partly as a result of that “carry-over” policy – which has since been rescinded – the number of visitors in tour groups actually increased in 2014 by 38%.

Under a new plan to increase the profitability of Chinese tourism, from September 21 the quota of FITs was raised from 4,000 to 5,000. This number is in addition to the regular daily quota of 5,000 tour-group visitors.

However, no limit is being placed on the number of affluent Chinese tour-group visitors, who are evaluated by the Tourism Bureau as “special cases.” To qualify, the individuals are required to spend more than NT$2,000 on meals a day and stay in four-star hotels or better. The expected daily spend of such affluent group visitors is US$350, based on the average business visitor outlay. The average daily expenditure for all visitors in 2014 was US$221.76, with the Japanese (US$243.33) and Chinese ($241.98) as the two biggest spenders.

Emile Sheng, a former minister of cultural affairs and now head of the L’Hotel de Chine Hotels & Resorts Group, says the relative reliance on the China market is understandable. The two countries are geographically close and share the same language, while Taiwan is arguably the repository of traditional Chinese culture.

“The growth in tourism has been rather fast over the past six or seven years,” Sheng says. “It’s easy for everyone to do business at this rate. You can just open the doors of a hotel and make money. Politicians and the media are focused on numbers rather than quality, but we need to look more at how many nights the visitors stay and how much they spend.”

One issue that needs to be addressed, he believes, is that many of the tour operators bringing Chinese visitors to Taiwan are based in Hong Kong. They view Taiwan as a developing destination that they can tap into now that their own market is fairly saturated. Controlling both the upstream and downstream operations, they recruit tour groups in China and then escort them to shops and restaurants they own in Taiwan.

“This does not leave a great impression and Taiwan does not receive a great contribution,” says Sheng. “We must look at the quality of tour groups, but this is not only a job for the government but also a responsibility for the private sector.” He considers, for example, that local tour operators need to take market share from Hong Kong operators and improve their offerings to appeal to a more prosperous demographic. In addition, businesses that cater to tourists, such as hotels and restaurants, could also improve their facilities and services.

Upgrading the country’s tourism offerings is another issue close to Sheng’s heart. Referencing Sun Moon Lake’s panoramic three-hour cycling route (rated a world top-10 experience by CNN), Sheng says overcrowding spoils the actual experience. “What distinguishes a first-class offering is both the hardware and software,” he observes, “a place where people can take part in activities, rest, and take photos. Safety and all these things have to be researched to add value.”

“As for soft power, this has to be utilized to the fullest,” he explains. For example, “Sun Moon Lake belongs to the Aboriginals and there are so many myths and stories deriving from that background. There’s a real cultural richness to the place that needs to be properly demonstrated. Not just in Sun Moon Lake but the rest of Taiwan as well.” He notes that “too often we’re taking the easy way of doing business, but to do it properly is hard.”

Better infrastructure

Most experts agree that to succeed as an international tourism destination Taiwan needs to upgrade its tourism infrastructure, from cleaning up its rubbish-strewn beaches to improving the safety of its traffic and transportation, as well as raising the quality of the professionals within the industry.

The World Economic Forum’s Travel & Tourism Competitiveness Report 2015 scores Taiwan a middling 4.35 on a 1-7 point scale, putting it in 32nd place out of 141 countries on the list of most friendly travel destinations in the world. Taiwan is rated higher in other categories, such as business environment (21), human resources and labor market (25), cultural resources and business travel (23), and security and safety (24). But in no category does Taiwan rank better than 21st. “Taiwan has failed to become one of the top destinations for foreign travelers but stands a chance of climbing in the global rankings if it improves its travel infrastructure,” the report concludes.

In this respect, there is some good news – with plans proceeding apace to expand the facilities at Taiwan Taoyuan International Airport, the main gateway to Taiwan, and to finally put the long-stalled MRT connection between the airport and Taipei into operation. Coming after recent improvements to the airport’s Terminal 1 and an ongoing expansion to Terminal 2 that is expected to be completed in 2017, planning is moving forward for two additional terminals to relieve the current congestion and meet future demand (see the accompanying story for more details).

To date, however, transport from the airport into the capital remains a sorry affair. The lack of a car rental outlet in either terminal has been a glaring omission for many years. The World Economic Forum report refers to the offering of airport car rental services as “a basic benchmark for every global city” and goes on to “encourage Taiwan to follow the international norm.”

Even worse, there is no light rail connection to Taipei, so most visitors settle either for an expensive taxi ride into town or take the bus. Service in this regard is fairly poor, especially for non-Chinese speakers. Put simply, it’s a first impression that doesn’t do Taiwan any favors.

All that is set to change next year when the long-awaited and much delayed, approximately 50-kilometer-long rapid transit link from the airport into Taipei is expected to finally begin operations. The project was first approved in 1998, but after several false starts, construction only began in 2006. The line will have 22 stations along the route, and trains are expected to run every 10 minutes during rush hour and every 15 minutes thereafter, transporting about 855 passengers and 5,200 kilograms of luggage per train.

It will take about 35 minutes to whisk the weary traveler to Taipei Main Station. Much of the journey will be on elevated tracks, at a maximum speed of about 100km/h, providing a grand entrance to the capital. As in Hong Kong, the operation will provide in-town check-in service to speed up and simplify procedures for those departing the country.

A specific date has not yet been announced for the beginning of operations, which has long been regarded as embarrassingly overdue. “The MRT link and improvements to Taoyuan Airport are a priority,” says Pauline Leung. “As a citizen, my question would be: ‘How come you don’t have these facilities already?’”

She is also keen to improve other aspects of Taiwan’s infrastructure, such as poor quality construction, unfettered development, dirty beaches, and lack of preservation of the country’s natural beauty. “Previously, beaches were seen as just for locals,” says Leung. “As for the coastal areas, these weren’t opened up, as they are, say, in Hong Kong, which is well developed in terms of offering yachting activities and so on. Things are changing, but we could do so much better. We should open up tourist development to foreign investment more and improve standards. To be more attractive to international tourists, you must provide good conditions.”

With the advantage of so many Chinese tourists, Leung adds, such investment should be a relatively safe bet.

Trial Runs - A train on the airport MRT link undergoing testing. The view out the window is the Taiyuan baseball stadium.
Trial Runs – A train on the airport MRT link undergoing testing. The view out the window is the Taoyuan baseball stadium.

Good but could be better

One of Leung’s co-chairs on the AmCham Travel & Tourism Committee, The Sherwood Taipei hotel general manager Achim von Hake, stresses the need for further expansion of the meetings, incentives, conferences, and exhibitions (MICE) market as part of any program to improve Taiwan’s tourism industry. He cites the World Economic Forum report’s recommendation that Taiwan set up a dedicated government department, staffed by experienced professionals, to develop its MICE facilities and promote them abroad. The high-spending businesspeople that tend to participate in such events are the best kinds of tourists to try to attract, he notes.

Von Hake says the conference and exhibition front has already seen some successes, praising the excellence of the annual Taipei International Cycle Show and holding it up as an example of “what we should aim at.” He adds that the Rotary International Convention scheduled for 2021 is the type of high-profile event that Taiwan needs more of. “The whole world will learn about us,” he explains. “To have an international profile, we need more international brands like this” to come here.

Part of becoming a bigger player in the advantageous MICE segment will need to be the presence in the market of more large-scale, world-class hotels. To adequately staff such establishments, the Travel & Tourism portion of AmCham’s Taiwan White Paper recommends following the example of Singapore and Macau by opening the doors wider to foreign labor.

Visitors By Origin (July 2015)
Visitors By Origin (July 2015) Source: Tourism Bureau

While that step would have the advantage of providing a quick fix to what has become a nagging problem, von Hake also sees the need to “work with the Education Ministry to grow talent inside Taiwan rather than simply bringing it in.” He considers that leading hospitality schools from abroad would be willing to support the effort if Taiwan put out the welcome mat. An example of what he has in mind is the collaboration between Cornell University’s School of Hotel Administration and the Nanyang Business School in Singapore to offer a program that combines cutting-edge hospitality management theory with practical experience to learn industry best practices.

Von Hake lauds the National Kao- hsiung University of Hospitality and Tourism (NKUHT), where students learn the culinary arts from top Western chefs, in addition to courses on hotel and food and beverage management. But he emphasizes that KHC is an isolated example and cannot supply enough talent for what is a growing and demanding market.

In addition, von Hake says, the government and entrepreneurs need to look at further improving the number of top-quality restaurants, while building on the success of the first-class shopping options offered by operators like Taipei 101.

Having lived and worked in Taiwan for 23 years, von Hake is well aware of what has already been achieved in seeking to bring Taiwan’s travel and tourism industry to a higher level. “We have only been doing this for eight years, so we need to look at the industry more scientifically and really examine our markets,” he says. “There should be a regional push first (to further increase the number of Asian visitors), then look at the international situation later.”

With the right measures in place, says von Hake, it should be possible to continue the linear growth pattern for Taiwan tourism, further increasing revenue to contribute an ever-greater proportion to the nation’s GDP. Already that proportion has risen from about 1.2% six years ago to 5.3% in 2014. In addition, according to data from the World Travel & Tourism Council, which represents the world’s 100 top travel companies, the Taiwan hospitality industry provides employment for 643,000 people (5.9% of Taiwan’s working population) and has attracted US$5.5 billion in foreign direct investment, about 5.8% of the country’s total inward FDI.

Taiwan would do well to focus on a mixed approach to tourism, von Hake suggests, since it can accommodate a wide range of markets, from leisure to business and first-class tourism. And while Taiwan is acclaimed by the backpackers’ bible, Lonely Planet, for being among the best-value destinations of 2015, the big money lies elsewhere. Cultivating a more upscale market will require further improving the environment and infrastructure.

Worldwide, the trend is toward increased travel, and countries that miss out on this trend are doing their population a disservice. For instance, in Taiwan the number of outbound trips has grown at a rate of about 6% per year, according to Euromonitor International, and is expected to reach 14 million by 2018.

Tourism is a key driver of socio-economic progress, creating jobs and business ventures, increasing service exports, and boosting infrastructure development. Last year, according to UNTWO, there were 1.13 billion tourist arrivals around the globe, worth US$1.24 trillion in revenue, with the number of tourists expected to increase to 1.8 billion by 2030. Those who stand to gain most, UNTWO asserts, are emerging destinations like Taiwan.

And while the number of Chinese visitors can be seen as a problem, the fact is that Taiwan’s tourism industry did not really take off until Taiwan started admitting them in the late 2000s.

“Losing manufacturing, what else do we have but tourism?” concludes Pauline Leung. “It creates a better environment, reduces pollution, makes more jobs, and leaves everyone happier.”

An artist's rendering of the proposed Terminal 3 at Taiwan Taiyuan International Airport.
An artist’s rendering of the proposed Terminal 3 at Taiwan Taoyuan International Airport.

Taoyuan’s New Terminals Reach for the Sky

If all goes well, Taoyuan will give birth to the country’s first aerotropolis – a vibrant “airport city” providing brand new opportunities for retail shopping, entertainment, and tourism.

It’s an exciting idea that could see the light of day in just five to six years’ time. The plan calls for construction of a US$1.5-billion third terminal at Taiwan Taoyuan International Airport, connected in an east-west direction to an expanded Terminal 2 (T2) through a “Multi-Function Building” that will feature an exhibition center, international hotels, and retail space.

The resulting mega terminal – together with Terminal 1, a new light-rail MRT connection from Taipei, and a recently announced Terminal 4 – is expected to propel Taiwan into the future as a major regional aviation hub.

In what was a surprising development to many observers, the Ministry of Transportation and Communications in mid-September announced its intention to construct a fourth terminal to be completed before Terminal 3 (T3) comes on line – in order to cope with rapidly expanding traffic, especially from China.

In the current design competition phase for T3, due to conclude at the end of November, there are three shortlisted tenderers: a consortium led by Taiwan’s CECI Engineering Consultants and also including Rogers Stirk Harbour + Partners, Over Arup and Partners Hong Kong, and Fei & Cheng Associates; Taiwan’s Bio-Architecture Formosana (in collaboration with Van Berkel en Bos U.N. Studio and April Yang Design Studio; and the United Kingdom’s Foster + Partners.

Parsons Brinkerhoff (PB) of the United States is coordinating the overall project as part of a consortium that also comprises Netherland Airport Consultants (NACO) and San Francisco-based T.Y. Lin. Established way back in 1885, New York-based PB has been involved in many of the world’s biggest infrastructure projects, including the Taipei Mass Rapid Transport and High Speed Rail systems in Taiwan.

For this project, PB acts as the general consultant and is responsible for the design review. NACO is in charge of master planning, while T.Y. Lin oversees construction management and the structural design review. The consultancy contract for the “smart, green and cultural” new terminal is worth US$44 million.

The overall objective of the project is to boost growth from the approximately 35 million passengers a year the airport handled in 2014, to 60 million passengers by 2030 and 86 million by 2042. T3 is expected to accommodate about 75% of this traffic.

In order to achieve this goal, the entire project, including multi-function buildings, will cover an area of about 640,000 square meters, meaning T3 will be about twice the size of the expanded T2. An automatic people mover, or “light metro,” will transport passengers from one terminal to the other.

“A key element of the design is smart or intelligent infrastructure,” says Frank Lin, general manager of PB Taiwan. This concept entails automation and implementation of digital technology, such as smart security gates, unmanned immigration systems, electronic baggage tracking, biometric identification, and real-time CTV security surveillance.

“Nowadays everyone uses a smartphone and our behaviors are changing radically as a result,” says Lin. “It’s the same when it comes to infrastructure – we have to put some life and brains on top of the structure, such as intelligent transit systems and smart buildings.”

“The traditional concept of an airport is just airplanes leaving and arriving, acting as a kind of bridge, and in the past our job would have just been to open a new apron,” Lin says. “Now the trend is to increase non-aviation revenue by providing commercial spaces and increasing shopping flows.”

Lin cites the vision of John D. Kasarda, the American airport business consultant who originally coined the term aerotropolis: “Making today’s air gateways anchors of 21st century metropolitan development where distant travelers and locals alike can conduct business, exchange knowledge, shop, eat, sleep, and be entertained without going more than 15 minutes from the airport.”

Lin says he wants the mega terminal to attract not only passengers from abroad, but from all over the country. “We must have a new vision of Taiwan’s airport and integrate the planning now. We have to think just one thing: how to keep people in Taoyuan. But to do this we need to be imaginative and think big. Why not a theme park, or even a Formula 1 track? The possibilities are endless.”

As to whether Taiwan can rival other regional aviation hubs like Singapore, Hong Kong, and the rapidly developing China market, Lin is not quite so bullish. The reason is that the government is not expected to be able to acquire the land for a third runway for at least a decade, while the competition has the green light to expand. When the third runway eventually is operational, it is expected that Taipei Songshan Airport will be closed and the space used for urban redevelopment.

Gambling on Taiwan: Hit or Bust?

The odds on whether casino gambling will come to one or more of Taiwan’s offshore islands are still uncertain. The population of Matsu approved casino development in a referendum in 2012, and deliberation on the Tourism Casino Management Act to set the necessary requirements for casino development has been placed on the Legislative Yuan calendar.

But the anti-corruption campaign in China that has caused gambling receipts in Macau to plummet has cooled investors’ interest in Matsu, at least for the time being, as any business plan there would depend heavily on visitor traffic from the Fujian province area on the mainland. And within Taiwan, the political wrangling that has long held up consideration of the bill is likely to keep it on hold until well after the presidential and legislative elections in January next year.

The ruling political party, the Kuomintang (KMT), has generally been supportive of the idea of introducing casinos to the offshore islands as part of integrated resort complexes, whereas the opposition Democratic Progressive Party (DPP) has actively opposed any opening to casino gambling in the past. Tsai Ing-wen, the DPP presidential candidate and current frontrunner, even flew to Penghu in 2009 to help defeat a referendum on casino development.

On a deeper level, though, the lack of legislative action represents widespread reservations about the potential negative social impact of legalizing casino gambling.

So while many point to the success of Singapore, which introduced casinos in 2010 to liven up its rather prim and proper image and create a new source of government revenue, others remain concerned about the potential downside for public order and social stability.

Emile Sheng, the former Council for Cultural Affairs minister and political science professor who is now president of the L’Hotel de Chine Hotels & Resorts Group, is of the latter view. “Overall, I’m not too keen on casinos,” Sheng states. “Studies on this issue show that for every dollar made, it creates US$3 in social costs, such as crime and negative effects on the neighborhood.”

Sheng notes that Singapore has been able to mitigate the harmful impacts of gambling on the community by restricting access to casinos for local nationals and enabling relatives to intercede to bar family members with a gambling problem from the premises. “I’m just not that confident that we’ll be able to regulate the industry as well as Singapore,” he says. “I realize that a casino could boost tourism, but even so, knowing the cultural differences, it won’t be done as well and just won’t be worth it.”

Research on the social and economic impacts of casino gambling has shown mixed results. A 2006 study by the Scottish government found that both the positive and negative ramifications of legalized gaming “tend to be overstated,” but noted that certain demographics are at greater risk of problem gambling, including single, retired males aged over 40, “especially those of Chinese ethnicity.”

Closer to home, a study by Wu Shou-tsung and Chen Yeong-shyang of Shih Chien University, “The Social, Economic, and Environmental Impacts of Casino Gambling on the Residents of Macau and Singapore,” published in the journal Tourism Management, found that the public is decidedly ambivalent on the issue. Roughly a third of surveyed residents in Macau and Singapore expressed support for casino gambling, another third ticked the “Not a big deal” box, and a final third selected “Unwelcome” or even “Disgust” to reflect their opinion of the casinos in their midst.

Anita Chen, Taipei managing director of the U.S.-based lobbying firm Park Strategies and a co-chair of AmCham Taipei’s Travel & Tourism Committee, says there is a widespread misunderstanding about the issue of casino development in Taiwan, noting that what is actually being proposed is an “integrated resort” (IR), rather than simply a casino. Such a business model typically dedicates just 5-10% of the development’s total floor space to gambling – enough to support the remaining non-gaming floor area, which may include hotels, convention space, shopping centers, and entertainment facilities.

“This is the model that Singapore created and has operated very successfully,” Chen recounts. “The model has been duplicated by many other countries, especially in Asia where people tend to be more conservative about the idea of casino gaming.”

Chen says the Ministry of Transportation and Communications and its Tourism Bureau worked long and hard in drafting the Tourism Casino Management Act to establish a sound legal framework for a gaming industry. A priority measure, the bill passed its first review in the Legislative Yuan but is awaiting cross-party negotiations.

Taiwan lifted its outright prohibition on casinos in 2009 through amendments to the Offshore Islands Development Act, and Matsu residents approved their own casino-IR proposal in a referendum three years later, making it the first jurisdiction eligible for casino IR development.

“With Taiwan’s geographic location in the Asia Pacific region and its proximity to China, it is ideally situated for a casino IR to attract tourists,” Chen says. “With proper planning and sound legal and regulatory controls, a casino IR can potentially bring a significant economic boost to Taiwan. Taiwan has the ability to do this right, but it takes a strong political will to make it happen.”

For that to happen, substantial political and social obstacles will have to be overcome.

A Talk with the Tourism Bureau Director-General

David W.J. Hsieh has been Director-General of the Taiwan Tourism Bureau under the Ministry of Transportation and Communications since 2012, when he was promoted from being the Deputy Director-General. He was recently interviewed for Taiwan Business TOPICS by Jules Quartly.

What do you consider that Taiwan has to offer that is different or better than other countries, particularly in Asia?

You could say that, like Thailand and other Asian destinations, we have lots of natural attractions and national parks, but we also put more of an emphasis on culture, lifestyle, and eco-tourism. Taiwan is a good place to visit any time and our Taiwan Event Calendar [http://eng.taiwan.net.tw/m1.aspx?sNo=0002019] is a very convenient way for visitors to find out more for themselves – whether it’s summer and hot springs in Taitung, or the various festivals and events that take place during the year. We depend a lot on word of mouth, so many visitors have discovered Taiwan through their friends’ travel experiences. There’s plenty to see and plenty to do.

After the 1997-2001 financial crisis, Taiwan started to give more priority to tourism. How much has changed since then with regard to tourism’s contribution to the economy?

Last year we welcomed 9.9 million visitors. Once we hit 10 million annually, our focus will be on quality. The average rate of visitor growth is 4.5% per annum, so by 2018 we hope to reach 11.7 million visitors. As for the percentage of GDP this represents, that was 3.2% or NT$390 billion in 2007, and it rose to 4.72% or NT$753 billion in 2014. Obviously, these are positive figures, but we always hope to do better.

You are currently implementing the 2015-2018 Tourism Action Plan. What can we expect from this?

Simply put, we are putting the focus on quality rather than quantity. We are also emphasizing individual rather than group-tour visitors, and exploring niche markets. Our third focus is on smart tourism, such as producing apps and providing information to mobile devices, making it easier to travel.

Also, there is sustainable tourism, or green tourism. This means using the public transport system more. At the same time we will work with hotels and restaurants to encourage them to use locally sourced ingredients and shop locally. Finally, we are providing increased assistance to physically challenged travelers and the elderly.

There has been criticism of Taiwan’s tourism offerings, such as poor quality construction, unfettered development, dirty beaches and a lack of preservation of the country’s natural beauty. How would you respond?

It used to be that the government was seen as primarily responsible for cleaning the beaches and so on, but it’s viewed more as everyone’s responsibility now. We are providing incentives such as vouchers, so that volunteers are cleaning the beaches. This is working quite well.

We know that Taiwan is a beautiful country and we need to preserve this, not only for our own future but also for the future of sustainable tourism. Examples of this are specialty tourism, such as the “Calligraphy Greenway” in Taichung, which emphasizes taking time to enjoy life and exploring the city’s greenbelt. We are also concentrating on developing the cruise market, the MICE business – though this is also the responsibility of business departments and we focus on incentives – as well as focusing on developing green and high-quality tourism with better hotels, tourism infrastructure, etc.

One of the biggest issues for Taiwan’s tourism is Chinese visitors. Do you have any general comments on this subject?

As previously mentioned, we are now emphasizing more the quality rather than the quantity of visitors, and certainly with Chinese tourists we are looking more at high-quality tour groups and individual travelers. Last year the growth rate for Chinese visitors was 38%; this year it has been just 4.3%, the reason being we are controlling the numbers. We must ensure that Chinese tourism is sustainable and beneficial to all. In previous years, 2013-2014 for example, there was a tour group limit of 5,000 visitors from China, but during the high season this could be raised to 8,000 per day, or if quotas weren’t met these could be added at another time. This year there are no exceptions and we only issue a maximum of 5,000 permits per day.

How do you intend to raise the average daily spend figure and “control the quality” for Chinese visitors?

In 2014 the average spend per day for Chinese visitors in Taiwan was US$241.

This was a decrease of 6.8% from the previous year, of which 53% was shopping and 18% on hotels. The reason for this decrease is that Chinese visitors used to buy their luxury products overseas, but after [PRC president] Xi Jinping reined in corruption, less money was spent on such goods and instead there was a greater outlay on local specialties. At the same time we encourage our travel agents to arrange visits to shops that are supplied by local industries and thereby enable them to benefit from tourism.

We are certainly looking for more individual, high-spending visitors from China, and we would like to spread out shopping for Chinese visitors across the whole of Taiwan, just like for Japanese or American visitors.

How do you intend to appeal more to Western countries, Japanese visitors, and so on?

We found from a survey of travel trends that people are traveling more than ever, but within their geographical region, and the travel time is shorter.

For us, 80% of visitors are from Asia, so naturally the Asian market is most important. Saying that, we have not given up on the international traveler or long-haul market, and are looking at steadily growing this market segment. We seek to provide a mixed product for international visitors. As part of this we obviously want to encourage high-spending visitors and as such we have Tax Refund Shopping that offers partial tax refunds. This system will further improve with a new Ministry of Finance tax system in January 2016.

A friend of mine from abroad told me that it is cheaper to buy luxury goods in Taiwan, because of the tax breaks. When you think that the goods are authentic, plus the good service quality, then Taiwan is a very attractive destination for shoppers.

Outbound tourism has also gone up. What are the advantages and disadvantages of that?

Obviously we want to improve domestic travel, but Taiwanese now have more money than before, so that means there has been a corresponding increase in outward-bound travel. There used to be just 55 countries that offered visa-free travel to Taiwan citizens, but this has expanded to 142 countries, which again helps with outbound traveling.

In 2008 the difference between inbound and outbound travel was 4.6 million, but last year it was 1.9 million. Simply put there is more traveling, both into and out of the country. This is a worldwide trend and is because people have more disposable income to spend on travel. It is our job to encourage tourism in Taiwan, so we intend to enhance our offerings both to domestic and foreign visitors.

Is there any likelihood of the Tourism Bureau being upgraded to a ministry level?

Currently the Tourism Bureau is under the Ministry of Transportation and Communications and in the future this is not likely to change, though the Tourism Bureau is due to become the Tourism Administration, having greater authority and the remit to formulate travel policies. This is an upgrade and reflects the importance of tourism to Taiwan and its economy.

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