Taipei’s Hotels Find Pandemic-Era Opportunities in F&B

Photo: Shangri-La's Far Eastern Plaza Hotel, Taipei

In the nearly year-long absence of international travelers, Taipei’s hotels have begun shifting some of their focus to their food and beverage business, offering attractive package deals and coming up with new, delicious ways to draw in the island’s domestic travelers.

As international travel to Taiwan ground to a complete halt last spring following the global outbreak of COVID-19, hotel operators in Taipei grew increasingly nervous. Of the more than 11 million international tourists to visit Taiwan in 2019, most spent the majority of their stay in the island’s capital city. The government’s decision to close the borders to all overseas visitors in March meant that occupancy rates at Taipei hotels would likely plummet.

And plummet they did. By May, room occupancy at the Sherwood, one of the longer established luxury hotels in the city, had fallen to around 5% during the week, rising only slightly on weekends thanks to domestic business travelers. Nearby, the Mandarin Oriental Taipei was forced last June to lay off over 200 employees and cease offering its rooms business for several months due to the drop in demand, though it began taking room reservations again in December.

The slump in rooms business forced many of the city’s hotels to get creative, and they usually did so with their other main source of revenue: food and beverage. At the beginning of the pandemic period, when many people were still reluctant to eat in restaurants, hotels like the Regent Taipei and the Shangri-La’s Far Eastern Plaza Hotel Taipei began offering delivery services for their dining outlets. While Shangri-La has partnered with online delivery platform Uber Eats, the Regent reassigned their own employees to deliver meal orders.

Many luxury hotels also began doing something that had previously been unheard of: offering high-end bento boxes for around NT$200-300 a pop. Randy Zupanski, area manager of Shangri-La Taipei and Tainan, says that for a short period, the hotel put on flash sales of their bento boxes at lunchtime, targeting workers from the office buildings nearby. He says that demand has gradually drawn down since the peak months of the pandemic in Taiwan.

Mario Cittadini, newly instated director of food and beverage at the Mandarin Oriental Taipei, makes a similar observation. He says that in Singapore, where he was posted until being reassigned to Taipei last month and which was under a kind of semi-lockdown at that time, the bento boxes made more sense because many of the city’s restaurants were shut down.

Meanwhile, Simon Wu, managing director of the Regent Taipei & Restaurant Group, says that his hotel recently fulfilled an order of 2,500 bento boxes for a company function. He notes that many companies are choosing not to hold their wei ya (end-of-the-year party) at an outside venue this year, and that the lunchboxes can provide a safe, socially distanced alternative.

Despite the uncertainty that many businesses in the service industry experienced during the first half of 2020, life began to normalize as the weather warmed, thanks in large part to the Taiwan government’s effective handling of the coronavirus. Tourism rose again as Taiwanese who had been cooped up for a few months began looking for domestic tourist spots to stay during the long weekends and holidays.

Importantly, by May many people in Taiwan felt comfortable dining out again. Several hotel operators interviewed for this report observed that the turning point for business at their restaurants was Mother’s Day weekend in mid-May. The desire of people to go out and enjoy their newfound freedom from the virus resulted in a surge in reservations at hotel restaurants. In some cases, F&B business is even better than before, though demand for rooms continues to be quite low.

To gather momentum and attract more domestic travelers, Taipei’s luxury hotels have been dropping their once-premium rates and bundling rooms and dining into attractive staycation packages. The Sherwood, after undergoing a complete renovation of its facilities, began offering a deal in which travelers who spend NT$6,000 on their stay can receive NT$6,000 worth of vouchers for the hotel’s restaurants and bar.

Cittadini of Mandarin Oriental says that after reopening its rooms service in December, the hotel’s limited-time offer of NT$8,888 for a room and two meals at its Michelin-starred Cantonese restaurant Ya Ge and Michelin Plate-awarded Italian outlet Bencotto proved incredibly popular, selling out in just two days. Furthermore, its Fantastic Getaway package, which starts at NT$9,800 and includes a one-night stay with breakfast and NT$3,000 worth of dining credit, among other perks, has boosted the occupancy of the rooms currently available, Cittadini says.

Photo: Mandarin Oriental Taipei

Branching out

Other hotels are trying more varied methods to start boosting their occupancy rates. Hotel Indigo Taipei North, which opened last January in the city’s Zhongshan district, held an online travel fair in May, offering up to 74% off their room-and-meals packages, as well as discount coupons for the hotel’s sole F&B outlet, the T.R. Kitchen and Bar. They also came up with a unique “room try-out” coupon, whereby guests could stay for up to four hours during the daytime for NT$1,500.

Indigo North’s General Manager May Hu says that while her new and relatively small team experienced a bit of shock at the beginning of the pandemic, they bounced right back to reality when they realized that the situation would likely last much longer than originally expected.

“We had only one mission at that time – to survive,” says Hu, who relied on the agility and leanness of her staff to roll out several events and promotions in a short amount of time. Given Indigo’s chic design and boutique qualities, it has appealed to a younger subset of travelers, and one of Hu’s strategies has been to work with local food and design bloggers to spread the word about the hotel and its functions this year.

One of these special occasions was OFF MENU, a pop-up event featuring 13 world-renowned chefs from Taiwan and Japan and held on Indigo’s fourth-floor outdoor patio. Organized by the Taiwan edition of British fashion and lifestyle magazine Tatler, OFF MENU was the only such event to be held in Asia this year, a testament to Taiwan’s status as one of the world’s singular coronavirus safe spaces. Taking place over three evenings in early December, OFF MENU proved to be a huge hit, hosting around 280 attendees per night.

More established luxury hotels have explored different channels to promote their packages and events. Wu of the Regent Taipei says that his hotel has been grateful for the exposure its promotions have received through organizations like AmCham Taiwan, the British Chamber of Commerce in Taipei, and the American Club Taipei.

Wu notes that sales of the Regent’s Thanksgiving offerings this year grew around 20% from 2019, thanks to the marketing help they received from these organizations, as well as the return of many foreign residents from abroad who were looking for refuge from the coronavirus.

For the Regent, where F&B contributes about 60-70% of total revenue, maintaining these and other marketing channels will continue to be an important strategy for the duration of the pandemic. Although it’s hard to predict when international travel will begin returning to normal, Wu says the conversations he’s had with travel agencies and others in the industry indicate Taipei will likely not begin to see overseas tourism rise again until sometime in 2022.

Others offer even more conservative estimates. Arthur Wang, managing director and chief learning officer of Inno Hospitality Hong Kong, says that based on what he’s read from major consulting firms, business for the hospitality industry could reach its nadir in the second quarter of 2022. It would only make its way back to pre-pandemic levels by 2024 or 2025. Hotels thus need “to face the facts and ensure that they have enough cash on hand to make it until then,” he says.

While Inno is itself a hospitality consultancy, with teams in Taiwan, Hong Kong, and Shanghai, Wang last year also opened Hotel MVSA, a 38-room boutique hotel near Songjiang Nanjing MRT station in central Taipei. While smaller and less well-known than the rest of the hotels covered in this report, MVSA has done brisk business since its soft opening last January, thanks in part to its basement restaurant, Molino de Urdániz.

Hotel MVSA has enjoyed consistent
guest and reservation numbers since
opening last year, thanks to its Michelinstarred
restaurant, Molino de Urdániz. Photo: Inno Hospitality Hong Kong

The restaurant’s original location – which has received between one and two Michelin stars for the past 13 years – sits in a village in the Pyrenees, near Spain’s border with France. Over a period of about two years, Wang visited the owners more than 30 times, forming a relationship and eventually persuading them to let him open a branch in Taiwan with two of their chefs. Wang proudly notes that his branch was awarded a Michelin star soon after opening last year.

It’s all about the experience

In order to market themselves to a broader demographic, hotels are also exploring the “experience economy,” offering packages that include food, entertainment, educational courses, and other activities.

The Regent Taipei’s Cruise Vacation package is just such an offering, providing guests with the opportunity to eat, stay, and shop at the hotel, while also enjoying some knowledge- and skill-sharing classes. Simon Wu says that Japanese staff at the hotel helped put together some additional services to enable Taiwanese domestic travelers to simulate the experience of going to Tokyo.

The Regent Taipei has begun offering staycation deals such as its Vacation Cruise
package, which provides guests with experiences in addition to rooms and dining. Photo: The Regent Taipei

In addition, its “master on board” series invites professionals such as singers, chefs, world champion bartenders, and others to conduct short residences at the hotel. Wu says that the kind of experience offered by the Cruise Vacation, normally not seen in city hotels, solidifies the Regent’s transition to an “urban resort.”

Shangri-La is also adding more experiences into its usual rooms and dining deals. Area Manager Zupanski says that his hotel’s Eat, Play, Fun Getaway promotion incorporates both lifestyle experience classes and food and beverage adventures. The deal, which starts at NT$4,888 per night, has been popular enough that Zupanski and his team plan to continue offering it in the future.

“What we’ve tried to do is get away from the short-term packages, and think about things we can implement that can be valuable on a long-term basis,” says Zupanski, who also points to the hotel’s recent NT$80 million renovation of its buffet restaurant, the Café at Far Eastern.

Reopening its doors last December, the refurbished venue features a smorgasbord of freshly prepared dishes, prepared with new kitchen equipment including a Brazilian-made Josper charcoal grill and a smoker for barbecued meats. Partnering with Taiwanese chain Din Tai Fung, the Café also offers guests a steamed dumpling basket with each meal, and the seafood station sells fresh whole lobster at cost.

Though Café at Far Eastern had to raise its meal prices slightly to account for the cost of the new equipment and high-quality ingredients, extensive media coverage of the grand reopening event helped drive business. The restaurant has been fully booked at every meal since then.

Whether it’s through package deals, special food-related events, meal delivery, guest experiences, or renovations, Taipei’s hotels are exploring many different avenues to restore some of the revenue lost from the temporary halt on international travel. Most hoteliers agree that while COVID-19 has had a severe impact on business since the initial outbreak last year, it has also forced them to be more agile and creative, characteristics that will serve them well when international tourists begin arriving back in Taiwan once the pandemic abates.