More Hotels Opening to Meet Rising Demand

Photo: Courtyard by Marriott Taipei Downtown.

The types of facilities reflect changes taking place in the make-up of Taiwan’s tourism market.

New hotels are continuing to open in Taiwan while the composition of the local tourism market goes through some major changes. Though tour groups from China used to account for a large proportion of the visitors to the island, tensions in cross-Strait relations in the past few years have slowed their arrival. Overall visitors to Taiwan increased by 3.05% in 2018 over the previous year to exceed 11 million, while the number of travelers from China fell by 1.53% to just under 2.7 million.

The rise in tourists has accelerated so far in 2019 on surging numbers of “free independent travelers”– known in the trade as the FIT market. For the first four months of this year, total visitors increased by 10.64% and those from China were up by 18.53%. In addition, significant growth in visitors has occurred from Japan, South Korea, Southeast Asia, and North America.

These increases may be due to the Taiwanese government’s successful efforts in reinvigorating its tourism industry. Tourism 2020, an initiative spearheaded by the Tourism Bureau, has made strides towards boosting international tourism and diversifying the source of visitors. For example, between April 1 and mid-June this year a program under Tourism 2020 offered “spring travel” subsidies of up to NT$1,500 to foreign visitors.

The changes in the market have been attracting new investment in the tourism industry. Among the many hotels that opened in February and March this year are the Kimpton Da An, The Place Taipei, the Grand Cosmos Resort Ruisui-Hualien, and the Just Palace Hotel.

Photo: Kimpton Da-an

For small boutique hotels like the Kimpton Da An – located on Ren Ai Road, Section 4 in east-central Taipei, the changing face of Taiwan tourism is a benefit. “When we talk about the China market, it’s divided between groups and transient FITs,” says Matthew Lim, the hotel’s General Manager. “We can’t target the groups because we are really small – 129 rooms – so I think the increase in transient FITs is actually an advantage for us.”

Opened in March, Kimpton Da An is the San Francisco-based Kimpton brand’s first foray into Asia. Kimpton Da An is primarily targeting visitors coming for leisure rather than business purposes. Chinese tourists are the most numerous visitors by nationality, with Hong Kong and the United States a close second and third.

The garden and Living Room at the Kimpton Da An. Photo: Kimpton Da-an

Given Taiwan’s excellent culture of hospitality, Lim expresses confidence that this market is the right fit for Kimpton’s expansion into Asia. The Kimpton experience, which emphasizes personalized individual service, made Taipei a good match for an opening destination.

“Anyone who comes to Taipei will tell you that it’s the people here, the culture, that makes this place special,” Lim says. “Taiwan is probably one of the best countries to execute the service values and culture that the brand is trying to deliver.”

Business travelers are also important to Taiwan’s tourism industry, given the country’s vital role in international trade. For business-oriented hotels like the Courtyard by Marriott Taipei Downtown, which had its soft opening in December 2018, the target demographic is the 30-45 year-old working professional. As a result, the fluctuating Chinese tourist market does not impact them as strongly.

Photo: Courtyard by Marriott Taipei Downtown.

“We are confident that we can gradually reach an average room rate of NT$5,500-$6,000 in 2019,” says Amanda Lin, marketing manager of the 227-room hotel, which is owned by the Cathay Hospitality Management Co. Since the opening in December, the hotel has maintained an overall occupancy rate of 60% at an average room rate of NT$5,600. Located on the corner of Jianguo and Minsheng Roads, eight minutes from the Taipei Songshan Airport, the hotel is equipped with multiple conference rooms and work-friendly amenities to provide an efficient experience for the busy professional.

The executive lounge (top) and outdoor terrace (below) of the Courtyard by Marriott Taipei Downtown. Photo: Courtyard by Marriott Taipei Downtown.

The strength of Marriott’s international brand has also been helpful to keeping occupancy rates high. Some 80% of current customers are members of Marriott Rewards, the group’s international loyalty program. On average, 66% of guests are from the Asia-Pacific – especially Taiwan, Japan, Korea, Hong Kong, and Macao – while 30% are from Europe and the U.S.

(Another Courtyard by Marriott, this one owned by the Leofoo Group, opened in late 2016 near the Taipei Nangang Exhibition Hall in the Nangang District).

Hilton is another international brand expanding into Taiwan. Along with the opening of the Hilton Taipei Sinban in October 2018 in New Taipei City’s Banqiao District, the DoubleTree by Hilton Taipei Zhongshan opened toward the end of last year on Zhongshan North Road, Section 1. Hilton first came to Taiwan in 1972, but withdrew from the market in 2002. The return to Taiwan after 17 years reflects Hilton’s confidence in Taiwan’s potential for growth.

Though the DoubleTree was originally positioned as a more corporate-oriented hotel, the split between business and tourist customers is now around 50/50. “Because Hilton is an American brand, our members come from all over the world,” says General Manager William Wu. “Taiwan has a lot of points that are suitable for international development, and Hilton is very confident in Taiwan.”

The clientele of the DoubleTree by Hilton on Zhongshan North Road is half tourists, half business travelers. Photo: DoubleTree Hilton

Wu also cites the Hilton Honors membership program as an advantage for the DoubleTree brand over local hotels. When members come to Taiwan with little knowledge of where to stay, they are inclined to first look for Hiltons because of their familiarity with the brand.

The stream of new hotel openings shows no signs of slowing down in the near future. The Taipei Sky Tower due to be completed next year in Taipei’s Xinyi District is scheduled to house two Hyatt brands, a Park Hyatt and Andaz. The InterContinental Hotels Group (IHG), owners of the Kimpton Da An, have an additional six hotels in the pipeline. In addition, the L’Hotel de Chine Group (LDC) plans to expand its presence on the island with more properties.

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