Taiwan desperately seeking tourists

TAIPEI - What a difference a year can make.

Around this time last year, Mr Lu Jian-yi's phone was ringing almost non-stop. At the other end of the line were tour operators scrambling to find enough tour guides like Mr Lu to lead the droves of big-spending mainland Chinese heading to Taiwan for their week-long National Day Golden Week holiday.

The jobs came thick and fast.

"I would get calls almost every day; some bookings were made a month in advance. I had to turn down some of them because I was worried I couldn't cope," recalled the father of two, who did not see his family in the southern city of Kaohsiung for three weeks because he was constantly on the move.

But the money was good, said Mr Lu, 54, who could pocket as much as NT$100,000 (S$4,300) a month in commission fees.

In sharp contrast, he had not led any tour group in the past month. And he has yet to receive a single booking even as China's Golden Week holiday kicks off today.

Many Chinese are giving Taiwan a miss. A major Chinese tourist operator said bookings for Taiwan tours this time round have fallen by 20 per cent to 30 per cent compared to last year, according to a China Daily report.

"It is prime time for travel but no one is coming. If this continues, how are we going to survive?" said the self-employed Mr Lu. No job means no income.

Some 10,000 workers in the tourism sector took their grievances to the streets on Sept 12 to demand more government assistance, including measures to revive tourist numbers from mainland China. Photo: Reuters

In a matter of months, Taiwan's tourism industry - which employs some 100,000 people and accounted for nearly 4 per cent of the island's gross domestic product last year - has gone into a tailspin as last year's flood of Chinese tourists turns into a trickle.

Politics, it seems, has something to do with the state of affairs. And many Taiwanese like Mr Lu are quick to blame their new President, Ms Tsai Ing-wen, for their predicament. "She had promised during election campaigns that she would make things better (for the people) and Chinese tourists would continue to come, but things are getting worse. I feel like we have been duped by her empty talk," said Mr Lu.

Ms Tsai's party favours independence from China. In her inauguration speech in May, she did not acknowledge the 1992 Consensus - a tacit agreement between the two sides that there is one China - which Beijing has set as the bottom line for continuing cross-strait exchanges.

This angered Beijing which, besides cutting official contact and exchanges with Taipei, reportedly also restricted the flow of Taiwan-bound Chinese tourists from as many as 16,000 a day last year to 10,000. The quota may be cut further, according to media reports. The numbers bear this out.

Workers in the tourism industry displaying their unhappiness with President Tsai Ing-wen during a protest in Taipei last month. Photo: AFP

Since May 20, the day Ms Tsai took office, Taiwan has seen a 22.3 per cent drop in the number of Chinese visitors. In August, there were 248,000 Chinese tourists, down 32.4 per cent from a year ago.

While 4.1 million mainland Chinese visited Taiwan last year, fewer than half that number are expected this year, according to the island's Tourism Bureau.

It doesn't help that Chinese tourists are no longer the big spenders they used to be. While they each spent NT$30,000 on a seven-day trip in the past, these days the amount is more likely to be NT$10,000.

The impact of this double whammy is immediately felt down the line - from tour agencies, hotels, restaurants and shops selling popular local snacks and souvenirs, to tour guides like Mr Lu, bus drivers and shop assistants.

The worst-hit are those in counties or cities outside the capital city of Taipei, such as Chiayi, Taitung and Hualien, which used to see busloads of mainland Chinese visitors on seven-day round-the-island tours. Already, a travel agency was forced to close recently - and more could follow.

In dollar terms, the drop in Chinese arrivals could translate into monthly losses of NT$2.04 billion, according to tour operators. Some 10,000 workers in the tourism sector took their grievances to the streets last month to demand more government assistance, including measures to revive tourist numbers from mainland China.

Taipei tour operator Lin Wei-yang, 59, who has been catering to mainland Chinese tourists since 2002, said more than half of his 150 tour bookings in July were cancelled and he had only 25 confirmed bookings last month. He said he has racked up more than NT$9.4 million in losses so far.

Tour bus operator Stephanie Wu, whose Kaohsiung-based business used to generate about NT$5 million in revenue a month, now barely makes NT$1 million.

To cut costs, Ms Wu, who has been in the business for 40 years, has put 20 of the 35 bus drivers in her employ on forced leave. The remaining drivers are rostered to ferry local tour groups. She is also renegotiating loan terms for half of her 33-strong fleet of buses and does not rule out selling some of them. "Given the current situation, I don't think anyone will buy the buses even if I offer a 50 per cent discount," she said.

Hotels, too, are finding themselves with plenty of empty rooms. Ms Chiu Lofen has seen room occupancy rates at her properties in Taitung and Hualien plunge by 40 per cent. She is resorting to slashing room rates to push up occupancy.

But price cuts can only do so much. Already, there have been reports of hotels and shops selling souvenirs and popular local snacks such as pineapple shortcake planning to close down. Mr Lai Tseng-hua is one of those who intend to do so, by the end of the year. "No one buys more than Chinese tourists. We can barely sustain the business even if we focus on travellers from other countries," said Mr Lai, whose shop selling souvenirs and local produce is in Taichung.

That Chinese tourists are paring their spending overseas partly has to do with their country's slowing economy. According to the China National Tourism Administration, per tourist spending growth was estimated at 1.5 per cent for last year, compared with 16.5 per cent the year before.

Not just Taiwan, but Hong Kong too is facing declining tourist numbers from mainland China, which were down 15.5 per cent last December compared to a year earlier, said Hong Kong's tourism authorities.


One bright spot is the rise in free and independent Chinese travellers, whose numbers rose 13.82 per cent between January and July, according to the Tourism Bureau. Xiamen native Su Minhui, who visited Taipei and Hualien on her first trip to Taiwan with two friends last week, said she would like to visit again next year. "It is very convenient travelling around because people here speak the same language, eat the same kind of food and are very friendly. Things here are also quite cheap," said the 29-year-old accountant.

Another bright spot is that visitor numbers from Japan, South Korea and South-east Asian countries such as Thailand grew between 30 per cent and 68 per cent in August, compared to last year.

"While China group travellers continue to be an important source for us, the tourism sector cannot see them as a be-all and end-all option," the Tourism Bureau's international affairs division director Eric Lin said. "We must be flexible enough to look elsewhere to draw visitors."

The bureau is in talks with tour operators, hoteliers and merchants on how to disburse NT$30 billion in loans to help the struggling sector, he added.

While he declined to give details of the discussions, The Straits Times understands that there is a raft of measures, including subsidies for tour operators to organise travel packages for locals and pairing up translators who can speak Bahasa Indonesia, Thai or Vietnamese with Mandarin- speaking tour guides so that they can lead groups from the region.

Tour operators are also getting help from the government to come up with packages, for instance, that appeal to younger, independent travellers.

Mr Ringo Lee Chi-yueh, a spokesman for Tourism Industry Alliance, said subsidies and handouts are only a stop-gap measure. "There is a limit to how far money can go to address the situation, " he said. "But this has become a political issue, so it requires a political solution."

For now, Mr Lu is living on his savings. He has told his family to be frugal and his wife cannot spend more than NT$15,000 a month on food. He is also taking refresher lessons to be a bus driver again. He became a tour guide four years ago because he could make more money. "But if the tourists still don't come, I might have to leave the tourism industry."



Mr Benny Wu, chairman of the Taipei Association of Travel Agents which represents 1,400 tour operators in the capital city, said he hopes to apply for subsidies to set up an online portal, similar to agoda.com and hotels.com, to cater to independent travellers.


The government is working with tour operators to target Taiwanese and tailor tour packages for locals to visit other parts of Taiwan. Mr Wu said subsidies will likely be given to tour operators who are successful in arranging trips that last two days or more. This will, in turn, benefit tourist hot spots, hotels, shops and restaurants.


There is a shortage of tour guides in Taiwan who can speak the native language of tourists from countries such as Thailand, Vietnam and Indonesia. According to Mr Wu, there are only 98 qualified tour guides who can speak Vietnamese, Bahasa Indonesia or Thai.

The Tourism Bureau is said to be looking to hire, among others, the foreign spouses of Taiwanese who can speak one or more of these languages. They will then be paired up with Mandarin-speaking tour guides so they can also lead groups from the region.


Tour operators are encouraged to draw up more free and easy programmes that appeal to the growing number of independent travellers. These can include hiking trips in the mountainous Alishan region and farm stays in western Miaoli region.

This article was first published on October 01, 2016.
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