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The Battle for Tourists in Asia is On


The Battle for Tourists in Asia is On

Source:Chien-Ying Chiu

How can Taiwan bring to bear its touristic attractiveness given that its neighbors have made quality tourism a national strategic goal?



The Battle for Tourists in Asia is On

By Ming-ling Hsieh, Shu-ren Koo, Sara Wu
From CommonWealth Magazine (vol. 650 )

Over the past two years, Taiwanese tourist numbers broke the million mark, and word of a “tourism avalanche” spread across the nation like wildfire. Negative reviews of popular tourist spots quickly proliferated on the Internet. Exorbitant prices are reportedly being charged for popular snacks in Kenting, the popularity of Jiufen’s old street is declining, and the stiletto-shaped glass church in Chiayi fails to attract interest. As the government vocally demands that the targets of its Taiwan Tourism Action Plan are met, major tourism spots are registering marked declines in visitor numbers, showing that the market lacks strength.

During the Ma Ying-jeou era, tourism arrivals skyrocketed from 5.5 million to 10 million per year within just five years, from 2010 to 2015. Success came much faster than expected, but disillusionment set in even more rapidly.

After President Tsai Ing-wen took office (in 2016), the tourism sector blamed the (China-critical) government for declining tourist arrivals from China, pointing to frosty cross-strait relations. Last year, the number of Chinese tourists declined to 2.73 million, down from 4.2 million in peak times. Tourists from Southeast Asia do not spend as much as Chinese tourists. Although the rather affluent Malaysian travellers spend around NT$4,200 per day, this is only about 70 percent of what Chinese tourists shell out.

Taking advantage of the approaching local elections in late November, tourism operators put pressure on the government by venting their anger over the downturn. The central and local governments have fallen into the trap of offering quick fixes, designing a broad array of subsidies to rescue the tourism industry. But can this lead to a long-lasting solution?

Hadn’t we better analyze our comparative strengths and weaknesses to get a better grip on the competitiveness and competitive advantages of Taiwanese tourism? And shouldn’t we improve the quality, tastefulness and special features of Taiwanese tourism while remaining open to new ideas?

Image: Guo-Tai Liu

The Battle for Tourists is On

Asian Countries Make Boosting Tourism a National Goal, What About Taiwan?

Even as everyone was complaining about the decline in Chinese tourists, and tourism policy struggled to address the urgent situation, no one noticed that the travel industry in Asia has already entered a new “warring states period” where great opportunities present themselves amid fierce competition.

According to the World Tourism Organization (UNWTO),  a specialized agency of the United Nations, the tourism sector in the Asia-Pacific region is developing vigorously. The Asia-Pacific region is the fastest growing tourism destination in the world, and has already become the second-largest travel market behind Europe. In 2016, Asia and the Pacific welcomed more than 300 million visitors, a quarter of all tourists worldwide, representing a nine percent increase in international arrivals year-on-year and a record high.

International and intraregional travel is quickly developing in the Asia-Pacific region thanks to economic growth, market opening, the emergence of budget airlines, convenient travel and aggressive promotions. Asia’s growing middle class, which has never been more affluent than it is now, has become a new target group for the travel market.

The top five source countries for tourists to Taiwan are China, Japan, Hong Kong, South Korea and the United States. The first four in the list contribute more than a million visitors per year.

In the past three years, several Asian governments, including those of Japan, South Korea, Thailand and Vietnam, have made upgrading their tourism industries a strategic goal of national importance.

Hirosaki Park in Japan (Image: Aiomori City Government)

Japan, for instance, has already created its own brand of tourism, with a focus on its sophisticated cultural heritage and the scenic beauty that can be found during the country’s distinct four seasons. In the wake of the devastating Great East Japan Earthquake on March 11, 2011, the whole country, from Prime Minister Shinzo Abe to local governments and the private sector, unleashed a movement to rebuild through tourism. The government devoted 4.5 percent of the national budget, designed promotions and relaxed laws and regulations to turn the country into Asia’s top travel destination.

No one expected that such a major travel destination as Japan would make inroads into the international tourism market with such affordable prices. Aside from Tokyo and Kyoto, prices for accommodation and shopping in Kyushu, Shikoku and Hokkaido are comparable to five-star hotels in Taiwan.

Taiwanese like to splurge when traveling. Last year, Taiwanese tourists spent NT$720 billion on overseas travel, whereas they parted with only NT$390 billion on domestic trips. Their top destination is, of course, Japan. Last year, a historic high of 4.56 million Taiwanese visited Japan, making Taiwan Japan’s third biggest source of tourists.

“During the whole year, my colleagues are either preparing to go to Japan or already traveling there,” notes Dennis Lee, associate with the Taipei office of the international law firm Baker McKenzie.

Lee, who is an avid hiker, loves to climb the mountains in Hokkaido. He hikes in the morning and relaxes in hot springs in the afternoon. Prices are reasonable, and getting around by driving yourself is easy because rental cars in Japan are fitted with Chinese-language navigation systems. This year, Lee plans to climb Mt. Fuji with some friends, and will then travel on to Izu Peninsula to soak in the hot springs there.

According to the Travel & Tourism Competitiveness Report 2017 (TTCR) by the World Economic Forum,  which covers 136 economies, Japan gained five places to seize rank 4 in the travel and tourism competitiveness index, ahead of Australia (7th), Hong Kong (11th), Singapore (13th), China (15th), South Korea (17th) and Taiwan (30th).

Comparing International Tourism Performance

How can Polluted Taiwan Become a Top Tourist Destination?

Taiwan’s rank of 30 in the travel and tourism competitiveness index is mainly owed to good performances in the fields of ground (road and rail) and port infrastructure, business environment, human resources and labor markets, international openness including air links as well as cultural resources and business travel, and digital tourism. The report pinpoints tourism service infrastructure, natural resources, government prioritization of travel and tourism, and environmental sustainability as Taiwan’s weaknesses..

How can Taiwan become a top tourism destination given its lack of blue skies due to environmental pollution? Regarding the index’s key indicators, Taiwan performed worst in environmental sustainability, ranking 75th overall, and in the bottom half of the 136- nation list for index components such as particulate matter (2.5) concentration, threatened species, baseline water stress, and wastewater treatment.

Image: Ming-Tang Huang

Moreover, Taiwan does not award sufficient attention to tourism. For prioritization of travel and tourism, Taiwan ranks 56th overall, lagging behind other Asian countries in terms of prioritization at the government level, travel and tourism government expenditure, and country brand strategy rating.

In terms of output, Taiwan’s tourism also counts among the weaker industries. In 2017, the island’s tourism industry generated revenue worth NT$285 billion, about 30 percent of the annual revenue of semiconductor foundry Taiwan Semiconductor Manufacturing Company (TSMC) in the same year. Tourism accounts for just two percent of GDP, far below the worldwide average of 10 percent. Consequently, Taiwan ranks among the eight economies that are least dependent on tourism, according to the TTCR.

In fact, people most easily recognize Taiwan through its country brand Made in Taiwan (MIT) campaigns and smile logo, which emphasize Taiwan’s manufacturing prowess. Michael Wu, founder and CEO of travel agency My Taiwan Tour, discovered the following problem during his visits to 55 countries around the globe: “Taiwan’s natural and tourism resources are not much inferior in comparison with other countries. But many people know Taiwan through MIT and not through tourism or culture," Wu points out. Eighty percent of his customers are travelers who stop over in Taiwan en route to other countries. Only 20 percent book trips to Taiwan only.

What can Taiwan do to present itself to the world as a livable place, a place where life is pleasant and comfortable? Tourism is the most direct manifestation of a country’s soft power. Tourism not only showcases a country’s beauty, it also acts as an engine for domestic consumption-driven industries. Aside from directly related industries such as hospitality and transportation, tourism can also invigorate ancillary industries such as the cultural and creative industries, agriculture and the souvenir business.

The core value of tourism lies in its ability to help revitalize local communities and to create jobs there. In 2017, only 260,000 people, or 2.3 percent of Taiwan’s workforce, were employed in the tourism sector.

(to be continued)

Read: Can Taiwan Become A Tourism Powerhouse?

Translated from the Chinese Article by Susanne Ganz
Edited by Shawn Chou

Additional Reading

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Don’t Tell the Japanese to Visit Jiufen Anymore!
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