Security concerns have pushed the number of Taiwan tour groups to the US substantially lower over the last two weeks, a travel industry insider said yesterday.
"We have seen more than 40 percent of our US tour groups cancelled recently," said an official from Set Tour Ltd (
Fear was behind many of those cancellations.
"In the wake of recent terrorist attacks, most Taiwanese tourists scheduled to go to the US cancelled trips on safety concerns," said Teng Ming-chang (
Taipei's Lion Travel Ltd (
Also hitting travel agencies hard is the decline in profitable business-class bookings, which are down 30 percent, according to Lai Hsiu-yuan (
Tumbling consumer confidence has dragged the existing market downturn into an industry-wide recession.
"The international travel market has reached rock-bottom," Teng said.
"Because of the economic slow-down, the public has been holding off on luxury travel, and now, add in the uneasiness of global terrorism and the extra insurance costs ? and the effect on passenger demand is likely to be more widespread."
The loss of passenger volume is expected to hurt profits at airlines.
"Because of the decline in traffic volume, China Airlines Co (華航) and EVA Airways Corp (長榮航空) are each estimated to lose NT$300 million in income for the fourth quarter of this year," said Tseng Kuan-chieh (曾冠傑), an analyst at Masterlink Securities Corp (元富證券).
US traffic makes up 30 percent of their sales, Tseng said. Falling revenue along with higher insurance and security costs will force airlines to raise prices, he said.
On Monday, Taiwan's Civil Aeronautics Administration and airlines' representatives reached a consensus to allow a surcharge of NT$60 for domestic flights and US$2.5 for international flights, starting Oct. 1.
Airlines will also raise air freight fees by NT$2.5 per kilogram.
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