Helping Taiwan attract 20 million overseas visitors annually by 2024 by strengthening Taiwan’s appeal to independent travelers and the MICE industry.
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 within the tourism business related establishments in Taiwan and enhances Taiwan’s competitiveness in attracting inbound growth from international markets.
It has long been the Committee’s view that if the government wishes Taiwan to become a major tourist destination in Asia, the tourism authority must be elevated to a higher level to expand the resources available for tourism promotion. We have recently learned the Tourism Bureau will be transformed into the Tourism Administration, remaining under the Ministry of Transportation and Communications (MOTC). While welcoming this step, we continue to believe that it would be better to upgrade the Tourism Bureau to a Cabinet-level agency to empower it to carry out the necessary inter-agency coordination.
The Committee would also like to mention that timely communication between government agencies and representative stakeholders from the business community is crucial to a healthy and forward-looking regulatory environment. Unfortunately, that was not the case when the MOTC in April announced draft amendments to the Act for the Development of Tourism. Government consultations with industry were held without participation by local or multinational Online Travel Agency operators (OTAs). When holding this kind of consultation, it is important to ensure that all relevant segments of the industry are included.
We look forward to continuing discussions with the future Tourism Administration and other relevant government agencies to find ways to improve Taiwan’s tourism market, to help support Taiwan’s economic growth, and to strengthen the nation’s 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 and ensure that development of tourism is a high national priority.
Transforming 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. However, as the Tourism Administration remains under the MOTC, it will still not be fully effective in coordinating the input from many other ministries that is needed for Taiwan’s travel and tourism sector to reach its potential. These ministries include the Ministry of Culture, Ministry of Foreign Affairs, Ministry of Education, Council of Agriculture, and numerous other government organizations.
We believe that even after establishment of the Tourism Administration, active involvement by the Executive Yuan (EY) will be needed. 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, 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. 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. The reasons for such an approach are clear. 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: Support grassroots entrepreneurialism and promote regional revitalization by creating more flexibility and autonomy in the use of local tourism and accommodation resources.
2.1 Learn from the example of Japan, the travel and tourism leader in North Asia.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. These include the Tourism Bureau, Ministry of Culture, National Development Council (NDC), Council of Agriculture, and Ministry of Economic Affairs.
The NDC has been working vigorously on Regional Revitalization projects across Taiwan to boost “youth return migration” into rural areas and to revive local industries severely hampered by declining population. The goal is laudable, but regulations forbidding “unlicensed” tourism-themed activities and lodging facilities have limited entrepreneurial possibilities that are essential to Regional Revitalization. Under reasonable legal requirements and proper risk-management mechanism so that safety concerns are not compromised, these operators should be allowed more flexibility in their operations.
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 coordination towards 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.
2.2 Consider allowing more old buildings with cultural uniqueness and aesthetic appeal to be used for lodgings. The Committee welcomes the relaxed regulations on setting up “homestays” at historical locations designated by local governments. We recommend extending that policy to permit tourist accommodations in more areas to further diversify the product offerings in Taiwan’s tourism market.
Many such buildings are located in areas where a large number of paying lodgers might be attracted only once a year for a local festival or other cultural event, or for seasonal fruit-picking, firefly watching, etc. The owners often have little incentive to put in the time and money necessary to qualify for homestay business registration. Without compromising fire-safety conditions, the regulatory approach could be made more flexible. For example, city and county governments could help provide 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.
With the right mix of offerings in accommodations and travel experiences, Taiwan can take international travelers beyond densely-populated urban centers and traditional scenic spots, redistributing tourism income to more people and places.
Suggestion 3: Facilitate the delivery of satisfying end-to-end travel experiences for free independent travelers.
With 11 million international visitors in 2018, Taiwan is poised to establish itself as a prominent player in global tourism. With the right mix of policy measures catering to the preferences of free independent travelers (FITs), Taiwan could attract 20 million overseas visitors annually by 2024, providing substantially more jobs, making an increased contribution to economic growth, and creating valuable opportunities for cultural exchange.
The FIT market is crucial because it’s an area of rapid growth worldwide due largely to the proliferation of travel-related online content, platforms, and mobile apps that make it easier for travelers to get around on their own. Taiwan needs to allocate more resources to services targeting the food, transportation, and accommodation needs of FITs, with the aim of making all of Taiwan’s 368 townships more easily accessible to them.
A reliable and diversified public transportation system would also 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 east-west divide in transportation infrastructure continues to hinder tourism development significantly. For example, capacity on the Hualien-Taitung railway still lags far behind demand in peak seasons. And while the Taiwan Tourist Shuttle is a good initiative for taking passengers to Taiwan’s major tourist attractions, there is a need for transportation options to serve international travelers who wish to go from airports or train stations to visit rural or remote scenic spots.
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 large-scale 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. The only major shortcoming has the lack of suitable conference venues. 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.
We 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. The Committee suggests that the government’s MEETTAIWAN office could organize familiarity tours, inviting executives of international NGOs or trade associations to visit Taiwan in hope of stimulating their interest in Taiwan as a destination for their future events.
Since many hotel operators and personnel are insufficiently knowledgeable about the MICE business, the Committee also suggests that MEETTAIWAN provide training programs to make them better equipped to promote quality MICE services.
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 have raised this issue over the past two years, 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 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.
Under the current unreasonable regulation, many hotels in Taiwan have found it necessary to stop offering special-price promotions for guestrooms, to the disadvantage of both travelers and the hotels.
A. Benefits for travelers. 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 in return for the 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 can be 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 – and 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. This problem can be prevented through proper education and communication with the customer on the part of hotels and travel agencies. Although there will always be some consumers who book non-refundable rates and 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. They must be used at the designated time or they lose all value. 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 because the customer has changed their plans at the last minute. At 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.
Taiwanese consumers are mature and educated enough to make their own decisions about booking conditions. We suggest that the Taiwanese government revise its regulations, respecting the hotels’ own terms and conditions, leaving it to consumers to decide on the best choice before they make their bookings. Once the booking is made, customers should abide by the terms and conditions they accepted.