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Pension reform already hurting local hoteliers: industry sources

2018/06/25 17:46:34

Taipei, June 25 (CNA) With the new pension system for retired public servants, teachers and military veterans set to come into force in July, hoteliers across Taiwan are already feeling the pinch during the peak summer season.

Sources from the sector said bookings for hotel rooms this summer have been noticeably down across the country and many fear the worst is yet to come.

Chang Ming-yi (張銘義), chairman of Wulai Tourism Promotion Association in New Taipei, said business at hotels in Wulai has been very slow for a while. He predicts it will continue to fall in the months ahead.

Occupancy is expected to fall from 70 percent now to 30 percent after the November elections, Chang said.

"As there are several months to go before the local elections in November, hotels in Wulai still receive customers organized by groups from other cities or counties," Chang said.

"Wait and see what the situation will be like in September and October when the summer vacation ends and after the local elections in November," he said. "The worst has yet to come for local hoteliers who have been hit hard for quite some time by a decrease in visitors."

Chinese tourists are not the bulk of their business, but the pension reform will ultimately deal a fresh blow to the local hotel sector which has been sluggish for quite some time, Chang said.

With pension reform to be implemented in July, business will become even more difficult for hoteliers in Wulai as retired teachers and public servants were their main customers.

The situation in southern Taiwan is even worse than in Wulai -- a scenic spot in northern Taiwan famous for hot springs and Atayal culture, an industry source who declined to be named told CNA.

He said business has been bad since Sept. 2016, four months after President Tsa Ing-wen(蔡英文)assumed office.

Local hotels have seen their business plunge by about 80 percent on weekdays, mainly as a result of the large fall in Chinese tourists coming to Taiwan in tour groups.

In addition, individual tourists from China do not usually visit regions south of Taoyuan, making it even harder for hoteliers in southern Taiwan to get through their current difficulties, the source said.

Echoing Chang's view, the source said he agreed that "business for Taiwan's hoteliers will become even worse in the coming months with the implementation of the new pension system." He told CNA it will definitely affect the willingness of local consumers to spend.

"Business has been extremely poor this summer," Chiayi Hotel Association Chairwoman Carol Li (李素珍) was quoted as saying in a United Daily News report Monday.

Lee told the Chinese-language daily that room reservations at hotels in Chiayi City have fallen at least 30 percent from last year and that hotel operators are very concerned about the trend.

Citing South Taiwan Travel Industry Alliance convener Frank Lin (林富男), the report said room reservations at hotels in recent months have fallen by half from last year and currently face a 70 percent decline compared with 2016.

Apart from the overall lackluster economic environment, Lin was quoted as saying it is undeniable that the reform of pensions for military retirees, retired teachers and public servants has already had a deep impact on the hotel sector.

According to Kaohsiung Association of Travel Agents Chairman Wu Ying-liang (吳盈良), tour groups for July are usually full by the end of May, but this year many groups set to leave in July are still not full, the report said.

A hotel operator in Taichung, central Taiwan who's identity was not revealed, said only 20 percent of the rooms at his hotel have been reserved since the start of this summer, a big fall from the 50 percent seen before the start of summer vacation in previous years, the report said.

He was quoted by the report as saying the cut in pensions has already begun to have an impact.

In some cases the adult children of those who have seen their pensions reduced have also cut back on travel spending with their kids due to financial concerns about their parents' lower pensions, he said.

Yilan County in northeastern Taiwan used to be a popular destination where many retirees took short home stays, but local hoteliers have seen a 30 percent drop in business.

"The pension reform has slashed consumers' spending ability," Chen Sheng-le (陳勝樂), chairman of Yilan County Lodging Association, told the United Daily News.

(By Flor Wang)