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Mainland tourists a big boon for Taiwan

(chinadaily.com.cn)
Updated: 2008-06-26 18:00

Alishan in Taiwan

The imminent arrival of the first wave of tourists from the Chinese mainland has positive implications for Taiwan's tourism industry and for its economy.

Analysts expect that 3,000 Chinese visitors a day would generate $2 billion in revenues, boost the island's overall hotel occupancy rate by 22 percent and its hotel room rates by 15 percent, and add 0.5 percent to GDP growth.

With the number of tourists likely to increase far beyond 3,000 a day, the sky is the limit.

For historical and cultural reasons, Taiwan is expected to be very popular with mainland tourists, and analysts believe that such tourism will eventually become a key pillar of Taiwan's economy, just as it has in Hong Kong.

A tourism revival

Taiwan's tourism industry has long been moribund. Taiwan receives fewer than a million Japanese tourists every year, and a trickle of visitors from Hong Kong and Singapore.

In 2007, only 3.7 million people visited Taiwan, a growth rate of just 5.6 percent compared with 2006, and of those 3.7 million visitors, only half were tourists, and the rest were business travelers or people visiting relatives.

In sharp contrast, Hong Kong received a whopping 28 million visitors in 2007, up 11.6 percent from 2006, including 15.4 million visitors from the Chinese mainland.

Because of low visitor numbers, Taiwan's hotels have struggled with poor occupancy rates for many years, usually in the range of 60 percent to 70 percent, and the hotels also suffer from some of the lowest room rates in Asia.

In 2007, for example, the overall occupancy rate of hotels in Taiwan was 67 percent, with an average room rate of just NT$3,200 ($105). In Hong Kong, by contrast, the average room rate in 2007 was $156.

"Taiwan now has the cheapest hotel rates among all the cities in Asia," says Stanley Yen, president of Landis Hotels and Resorts, which manages eight hotels and resorts in Taiwan, and two hotels in the Chinese mainland. "It is difficult for hotel operators here, because it doesn't give you enough return to justify the investment."

Current situation

In 2007, due to the tourism restrictions of Taiwan and the lack of direct flights, only 86,000 mainlanders visited Taiwan.

Yet these two hurdles look ready to disappear, and the benefits to Taiwan's tourism industry will be enormous.

Macquarie expects Taiwan's tourism revenue to grow 12 percent per year for the next three years, almost exclusively due to visitors from the Chinese mainland, far outstripping the 5 percent growth in tourism revenue from 2004 to 2007. By 2010, if 3,000 mainland visitors a day were to travel to Taiwan, they would add $2 billion in revenues, according to the Macquarie report.

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