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FEATURE: Taiwan sets tourism milestone in year of surprises

2012/01/03 17:48:32

By Christie Chen, CNA staff reporter

Taiwan welcomed more than 6 million visitors in a year for the first time ever in 2011 on strong growth from an unexpected source, and travel industry experts expect visitor numbers to continue to rise in the future despite looming challenges.

The milestone was achieved just a year after arrivals broke the 5-million barrier for the first time, largely on a huge influx of tourists from China.

The Chinese surge was expected to continue in 2011 but fell below expectations. Instead, it was Japan that was the biggest contributor to the roughly 10 percent rise in total arrivals and in the sub-category of leisure visitors.

"We originally estimated a drop (from Japan) because of the March 11 earthquake," Roget Hsu, secretary-general of the Travel Agent Association of the Republic of China, told CNA in a recent interview.

A stronger Japanese yen and closer ties between Taiwan and Japan after the March 11 disasters because of Taiwan's strong show of support, however, "may have driven Japanese travelers to come," Hsu said.

Total arrivals from Japan were up 19.l percent from a year earlier as of the end of November, the latest period for which official figures were available, and were expected to exceed 1.25 million for 2011 as a whole.

The jump was substantial for a country that had provided a steady 1 million visitors per year to Taiwan over the past decade.

But there are doubts whether Japan can provide further momentum in 2012.

"It will be difficult for next year to be better than this year," said Liang Jung-yao, chairman of Kai Fa Travel Service Co., which caters to inbound tourists from Japan and China.

The Japanese tourist boom in Taiwan in 2011 was helped by one-time events, including the March 11 disasters and flooding in Thailand, which diverted 50,000 Japanese tourists to Taiwan, Liang said, and he did not expect much of a carry-over effect into 2012.

"It doesn't look optimistic for big growth next year. The growth will likely be negative or limited," said Liang. "(I think) 1.25 million is the upper limit from Japan."

Hurting potential growth this year will be increases in local hotel prices, and if the Japanese yen does not remain strong, business will suffer, he said.

As much as Japan was a positive surprise, China was a disappointment even though it remained the biggest source of inbound visitors, accounting for about 30 percent of the country's total arrivals, experts said.

Total arrivals and leisure visits from China rose by 6.2 percent and 1.4 percent, respectively, in the first 11 months of 2011, compared with 71.4 percent and 137 percent year-on-year increases in 2010.

"We had estimated 2 million Chinese visitors for this year," said Liao Wen-cheng, general manager of Phoenix Tours International Inc., which offers tours for Chinese to Taiwan and is the country's only publicly traded travel agency.

As of the end of November, Chinese arrivals were still around 400,000 short of that goal.

Chao Chih-min, an official from the Tourism Bureau, said a fatal accident on a popular forest railway in southern Taiwan in April and a large-scale tainted food scandal in May deterred many Chinese visitors from coming to Taiwan.

Many large tour groups from China may have also been deterred from coming to Taiwan in 2011 because "it was Taiwan's election year," according to Liao.

But travel industry insiders were optimistic about the Chinese market in 2012 with the opening of Taiwan to more independent Chinese travelers.

Hsu estimated that total Chinese arrivals could reach 5 million within four years, and Liao believed they could hit a new high next year after "the presidential election variable is gone."

But Kai Fa Travel Service's Liang questioned the impact that independent Chinese travelers would have in the immediate future.

"Independent Chinese tourists are a help, but only 500 are allowed into Taiwan every day, and actual arrivals are less than that," said Liang.

The experts all agreed that stable cross-Taiwan Strait relations were a critical factor that could determine future growth in the tourism sector.

"Peace and stability across the Taiwan Strait is very important," said Hsu.

If Japan is a steady market and China a potential source of high growth, the wild card for Taiwan's inbound tourism market is Southeast Asia.

Arrivals from the region surpassed 900,000 in the first 11 months of 2011, an increase of 17.6 percent from 2010, with tourist numbers rising 24.6 percent.

The government's granting of visa-free entry to citizens from five Southeast Asian nations in 2009 and its efforts to promote Taiwan as a travel destination throughout the region are among the reasons cited for the higher numbers.

"More and more youth from Southeast Asia have been interested in coming to Taiwan since the visa-free move," said Lien Yu-ching, executive director of Harmony Express Travel Inc., which handles inbound tours for Chinese and Southeast Asian travelers.

"The government's promotional efforts in the region have also helped," she said.

Hong Kong and Macau have also become important tourism building blocks for Taiwan, with total arrivals of 720,745 in the first 11 months of last year, or 13.3 percent of the total.

The number, however, was only 1.4 percent higher than in 2010, and any big increases in the future are unlikely.

So while Japan, Southeast Asia, and Hong Kong and Macau will continue to be major sources of inbound tourists, significant growth in Taiwan's inbound tourism sector probably depends on China.

"If visitor numbers from China do not see a big increase, the government's goal of reaching 10 million visitors in four years will be impossible," Liang said.