The Committee would like to express our sincere appreciation to the Taiwan Tourism Bureau for its willingness to engage with our members and to understand our concerns on various issues in Taiwan’s travel and tourism industry. The recent launch of the Michelin Guide to Taiwan creates a very positive energy among tourism business related establishments in Taiwan and enhances Taiwan’s competitiveness in attracting inbound growth from the international market.
It has long been the Committee’s view that if the government wishes Taiwan to become a major tourist destination in Asia, it is imperative for the tourism authority to be elevated to a higher level so as to expand the resources available for tourism promotion. The Committee’s initial position was to recommend upgrading the Tourism Bureau to a Cabinet-level agency, giving it ministry status as most other countries in the region have done. However, we have recently learned that as part of the government’s restructuring plan, the Tourism Bureau will be transformed into the Tourism Administration, still under the Ministry of Transportation and Communications (MOTC). While welcoming this step, we continue to believe that even higher-level authority is required in order to carry out the necessary inter-agency coordination.
The Committee looks forward to continuing discussions with the future Tourism Administration and other relevant government agencies to find ways to bring improvements to Taiwan’s tourism market as a way to help support Taiwan’s economic growth and strengthen its people-to-people connections with the international community.
Suggestion 1. Establish a Board of Tourism within the Executive Yuan to champion Taiwan’s tourism development agenda at a higher level.
Transformation of the Tourism Bureau into the Tourism Administration, as called for in the current government reorganization plan recently approved by the Executive Yuan, will provide the organization with higher status and more resources. But it will not completely solve the problem that has long prompted this Committee to recommend the creation of a Ministry of Tourism or similar Cabinet-level agency. As the Tourism Administration will still come under the MOTC, it will be handicapped in effectively coordinating the input from many other ministries that is needed for Taiwan’s travel and tourism sector to reach its potential. The roads and other infrastructure that come MOTC’s purview are important for tourism development, but so are facets that come under the authority of the Ministry of Culture, Ministry of Foreign Affairs, Ministry of Education, Council of Agriculture, and numerous other government organizations.
As a result, we believe that even after establishment of the Tourism Administration, active involvement will be needed by the Executive Yuan (EY). High-level policymaking and collective action are required to develop a true strategic vision for Taiwan’s tourism for decades to come. The EY’s Tourism Development and Promotion Committee (TDPC), formed in 2002 and originally chaired by the Premier (more recently convened by a minister without portfolio), was initially expected to play that role. So far, however, the committee has had difficulty resolving cross-ministry issues, one of its explicit missions.
If the TDPC is unable to realize its potential, an alternative approach would be for the EY to create a new Board of Tourism, convened by the premier and emulating the kind of consultation and coordination found at the Board of Science and Technology. In addition, Japan’s Council for the Development of a Tourism Vision to Support the Future of Japan, chaired by Prime Minister Abe, offers another worthwhile model for high-level strategizing and coordination.
Tourism development is a multidisciplinary, inter-agency endeavor, encompassing policies related to transportation, culture, diplomacy, information technology, and sustainability, among others. Without concerted effort guided by a strategic priority, many tourism development programs are likely to be sporadic and inconsistent, resulting in limited or short-lived success. The authority, strategic focus, and sense of urgency represented by a Board of Tourism will help sustain momentum for cross-ministry coordination, bringing positive changes to the sector and Taiwan’s economy.
Suggestion 2. Coordinate overlapping ef for ts in tourism development and regional revitalization.
Acknowledging that tourism is an important engine for economic growth, the Abe administration has pledged to mobilize all available resources to make Japan a “tourism-oriented country.” As falling population levels and urban-rural disparities pushed a number of towns to the edge of disappearing, the Japanese government stepped up its effort at “regional revitalization,” seeking to rekindle economic activities and create new jobs in struggling areas, with tourism as a key component.
Aggressive targets for inbound tourism have been announced: 40 million international visitors per year by 2020 (the year of Tokyo Olympics) and 8 trillion yen (almost US$75 billion) in spending by international visitors. The ultimate goal is to reach 60 million visitors and 15 trillion yen in spending by 2030. In 2017, the number of overseas visitors to Japan already increased by 19% from the previous year to more than 28 million.
The Taiwan government has shown readiness to look to the Japanese experience with tourism development for insights. But it has not yet clearly followed the Japanese example in adopting a tourism-led national development strategy.
Experiences rooted in local culture and lifestyle have always held a special appeal for international visitors, and Japan is at the forefront of turning cultural traditions into marketable commodities. In Taiwan, much progress has been made in helping individual localities to market unique cultural assets to attract tourists, but there have also been missed opportunities where under-developed infrastructure, substandard service quality, and lack of innovation have held back progress in the tourism sector. This is precisely where the central government’s involvement is needed in pooling resources and coordinating disparate efforts. For example, numerous central government agencies have been involved in promoting so-called “cultural tourism,” each with its own agenda:
The Tourism Bureau has spearheaded a series of “International Spotlight” projects, aimed at creating globally attractive destinations and itineraries that emphasize cultural assets and transformed landscapes.
The Ministry of Culture has teamed up with local governments to promote a total of 146 “Cultural Destinations.” Meanwhile, the ministry has long carried out “Community Empowerment” programs help local communities identify their cultural resources for tourism and economic development.
The National Development Council encourages cities and counties to engage in “Regional Revitalization” plans, with a special emphasis on the application of “Design Thinking” to boost cultural tourism.
The Council of Agriculture, whose responsibilities include “Rural Regeneration,” devises programs tailored to rural development needs, many of which are directly linked to tourism marketing.
The “Tourism Factory” program of the Ministry of Economic Affairs assists traditional manufacturers in developing new tourist facilities that showcase the cultural aspects of manufacturing processes.
The Committee encourages the government to continue exploring economic growth possibilities through cultural tourism and regional revitalization, with reference to applicable models found in Japan and other countries. Serious cross-ministry alliance and coordination toward a common objective are sorely needed. We recommend consolidating and prioritizing policies and campaigns to capture the most value for all stakeholders – especially the travelers and local communities the policies are intended to serve and support.
Suggestion 3. Ensure the delivery of satisfying end-to-end travel experiences for the growing number of free independent travelers.
With 10 million international visitors annually between 2015 and 2017, Taiwan is poised to establish itself as a prominent player in global tourism. It is the industry’s fervent hope that, with the right mix of policy measures catering to the preferences of free independent travelers (FITs), Taiwan can attract 20 million overseas visitors annually by 2024.
This goal is well within reach if tourism policies take into account the following suggestions:
Pay increased attention to FITs, whose numbers have been on the rise in many parts of the world thanks in no small part to the proliferation of travel-related online content and mobile apps. Resources should be allocated to services targeting the food, transportation, and accommodation needs of FITs, so that all of Taiwan’s 368 townships become more easily accessible for them.
A reliable and diversified public transportation system would help draw a constant inflow of FITs, creating alternative income streams and employment opportunities for rural and smaller municipalities less visited by tour groups.
The Tourism Bureau’s 2016 Survey Report on Visitors Expenditure and Trends in Taiwan indicated that over 89% of inbound visitors were satisfied with the means of public transportation in Taiwan – with the MRT, High Speed Rail, and ferries ranked the highest in terms of perceived performance. In reality, however, the east-west divide in transport infrastructure continues to hinder tourism development significantly. A prime example is the Hualien-Taitung railway, where capacity still lags far behind demand in peak seasons. Also, while the Taiwan Tourist Shuttle service is designed to take passengers to Taiwan’s major tourist attractions, local bus routes and taxi services haven’t been well coordinated to serve international travelers who wish to go from airports or train stations to visit rural, remote scenic spots.
Make more residential buildings in rural or mountainous areas available for vacation rentals, either by the room or the entire house. Many such buildings are located in areas where only once-yearly cultural, farming, or tourism events (pilgrimage procession, seasonal fruit-picking, firefly watching, etc.) would normally attract a large number of paying lodgers. The owners often have little incentive to put in the time and money necessary for homestay business registration. While fire-safety conditions should not be compromised, the need for locals to better utilize and monetize their properties – as well as the potential for local economic development – may well warrant adjustment in the regulatory approach. City and county governments could support this endeavor by providing basic fire-safety equipment (fire extinguishers and carbon monoxide detectors) to facilitate the registration process and enable these buildings to qualify for home-sharing use.
We also urge the authorities to consider revising the Regulations for the Administration of Hotel Enterprises to allow some variation in on-site inspection requirements (including fire-safety equipment and facility accessibility) according to the size of the accommodation. Fire-safety conditions in small hotels with fewer than 50 guest rooms (including youth hostels) are different from large establishments and should be regulated accordingly.
Suggestion 4: Prioritize expansion of the Taiwan market for MICE (Meetings, Incentive, Conferences, and Exhibitions).
4.1 Expand or rebuild large-capacity conference facilities (other than ones available in hotels) as an investment in Taipei City. When the Taipei International Convention Center (TICC) was opened in 1992, it was one of the largest convention centers in the Asia Pacific. Over time, however, many larger and newer conference facilities have been built in such major cities in the region as Singapore, Kuala Lumpur, Sydney, etc. TICC’s current facilities and capacity are no longer adequate to meet current demand, let alone satisfy future needs.
The newer Taipei Nangang Exhibition Center offers a large capacity and good facilities for exhibition purposes, but is not very suitable as a conference venue, which is what Taipei currently needs the most to expand its international MICE market.
We suggest that the authorities consider the following several possible ways to fill the gap in largescale conference facilities:
Transform Exhibition Hall 1 of the Taipei World Trade Center into a conference facility through a BOT (build–operate–transfer) project.
Use the site of Exhibition Hall 3 of the Taipei World Trade Center to build a new conference facility.
Build at least one conference facility on the scale of those in Singapore: (1) Singapore EXPO Convention & Exhibition Centre, (2) Sands Expo & Convention Centre, (3) Sentosa Convention Centre, and (4) Suntec Singapore.
Taipei has many attractive features that would appeal to conference organizers. It is only the suitable conference venues that have been lacking. Providing modern, attractive facilities will enable the city to host many more largescale international conferences, with the associated widespread economic benefits for hotels, restaurants, shops, taxi drivers, and others.
4.2 Actively cultivate contacts with international associations and NGOs in an effort to attract more conferences to Taiwan. International associations exist for virtually every industry and type of social activity, and most of them regularly sponsor global and/or regional meetings and conferences for their members. As a key part of its MICE promotion, Taiwan needs to actively reach out to these organizations, both individually and through the U.S.-based Association Alliance, which describes itself on its website as “a community of associations that share ideas and coordinate with one another.”
The government is already promoting Taiwan – and Taichung in particular – as a regional hub for international NGOs, which is a positive step. We would also urge the authorities to encourage more domestic Taiwan NGOS to communicate and cooperate with their international counterparts as part of the effort to build up Taiwan as a MICE destination.
Suggestion 5: Apply international best practices to hotel booking refund policies.
The Committee strongly encourages the Tourism Bureau to adopt international best practice in the treatment of hotel booking refunds. We raised this issue last year, but unfortunately have not made as much progress as we had hoped, and so are raising it again.
Changing the current policy, which requires hotels to give refunds on canceled bookings even when part of a special package offering preferential rates but on a non-refundable basis, is important for a number of reasons. The first and most important is that non-refundable rates are beneficial to travelers – both Taiwanese and foreigners. They are also beneficial to the hotels, which are major providers of employment, and by bringing Taiwan into conformity with international best practices, they contribute to the Taiwan economy by facilitating inbound tourism.
A.Benefits for travelers. It may seem like a paradox to suggest that non-refundable rates benefit travelers, but it is true. Non-refundable rates are almost always lower than refundable rates for comparable rooms. Hotels are able to offer non-refundable rooms at lower prices because they are willing to offer a discount for this certainty of knowing that their inventory is sold. Airlines have been selling tickets on this principle for years, and consumers around the world are quite familiar with the practice and embrace it. Travelers who know their plans in advance buy these cheaper air tickets – just as travelers in other countries buy non-refundable hotel rooms at lower prices when they are sure about their plans.
The savings are substantial – often 30% or more. These savings allow travelers to spend more money on other aspects of travel (a benefit to local businesses, such as restaurants, bars, entertainment, shops, etc.) – or to stay longer. Sometimes the price inducement is the key factor in travelers’ decision to take the trip, since they might not be able to afford it at the full price.
For this practice to work, it is essential to clearly inform consumers about the pertinent conditions at the time of the sale – but airlines and hotels around the world over have been doing precisely that for many years.
The Tourism Bureau may feel that individual consumers whose plans change will suffer if non-refundable rates are allowed. Most such problems can be prevented through proper education and communication with the customer on the part of hotels and travel agencies (both traditional and on line). Although there will always be a few consumers who book non-refundable rates and will lose money when their plans change, the losses of these few consumers must be weighed against the gains of many thousands – even millions – of consumers who benefit from lower rates. Protecting the few by overcharging the large majority is not being friendly to consumers – it is, in fact, being very unfair to them.
B. Benefits to hotels
Hotel room-nights, like seats on an airplane flight, are a perishable product in that they must be used at the designated time or they are gone. No one would expect a fruit-seller to reimburse a customer who brings back spoiled fruit two weeks after it was purchased. Similarly, a hotel that sells a non-refundable room at a deeply discounted price months ahead of a special in-demand time period such as Chinese New Year should not be expected to reverse the sale at the last minute because the customer has changed his plans. On short notice, such rooms cannot be re-sold. Hotels will have difficulty staying in business if they cannot be sure that their product (rooms) will remain sold when they are booked in advance.
In addition, international chains need to have pricing policies that are consistent worldwide to satisfy their international customers and to make it possible to manage their companies in a reasonable and effective way. Creating special rules for their hotels in Taiwan will only damage the hotels’ business, discriminate against international travelers, and discourage hotel chains from investing further in Taiwan.
C. Benefits to the Taiwanese economy
Travel and tourism are major drivers of the economy. According to the World Travel and Tourism Council (WTTC), they account for one in 10 jobs in the global economy, and on average one new job is created for every 30 new travelers. The WTTC notes these figures for economic contribution and jobs in Taiwan:
Economic contribution in NTD
2016 (latest figures available)
2016 (latest figures available)
Even at these significant levels, Taiwan lags behind Northeast Asian averages in contributions to GDP and employment, and falls significantly behind its neighbors in the expected growth rates of travel and tourism’s contributions to GDP. For direct contributions, for example, Taiwan ranks 174 in the world, with a predicted growth rate of 2%, compared to a Northeast Asian average of 5.9%; China is #3 in the world, Hong Kong #15.