Taipei Times: With Taiwan's tourism industry being hard hit by severe acute respiratory syndrome (SARS), how serious do you expect the fallout to be?
Su Cheng-tien (蘇成田): Obviously SARS has seriously affected Taiwan's tourism industry. This year we originally had a target to attract 3 million inbound arrivals and in order to reach that target every month, on average, we have to have 250,000 arrivals. For the first two months of this year, our performance was pretty good, however, because of SARS, in March we saw a 4.7 percent drop in inbound arrivals over the same period last year. As for April and May, we estimate arrival numbers will be very, very low. The situation is very bad.
The Council for Economic Planning and Development has predicted that the nation's GDP will suffer a drop of between 0.15 percent and 0.25 percent if the SARS crisis continues for three months. According to government statistics, the tourism industry contributes about 3.5 to 4 percent of the nation's GDP annually.
PHOTO: GEORGE TSORNG, TAIPEI TIMES
TT: While the government had previously sought to double the annual number of foreign arrivals to 5 million by 2008. But as the market situation has changed, does the government intend to readjust its target?
Su: Currently, we don't plan to make any adjustments to that target, and we hope the disease will be controlled very soon. We expect the number of infections to decline with higher summer temperatures.
Even without SARS, reaching 3 million visitors would be very challenging. Therefore, following the outbreak of the disease, we have to work harder and put more effort into recovering and promoting Taiwan's inbound tourism business.
TT: Does the bureau plan any international advertising ad campaigns to pull in visitors?
Su: Yes, the tourism bureau is now working on running advertisements overseas to build up Taiwan's image as a tourist destination. We've also completed a 30-minute video about travel in Taiwan that is expected to be broadcasted on the National Geographic and Discovery Channels. Audiences in North America and Europe will be able to see that video. In addition, with Japan being the largest market for Taiwan's inbound tourism, we've produced a commercial for that country and it has already been broadcasted on Japan's CNN channel for several months. This year the tourism bureau's annually advertisement budget is NT$700 million.
TT: Some of Taiwan's tourist destinations are run down and in need of clean-up or repair. Doesn't the government need to spend more money resolving these issues before encouraging large-scale visits?
Su: Yes, of course. The government does plan to spend NT$70 billion over the next six years to double the tourist numbers. [To improve visitor satisfaction] we also have created twelve travel packages around the island, for example, Taipei/Tamshui/North East coast; Nantou/Sun Moon Lake; and Chiayi/Alishan. The government is working to upgrade accommodations and public facilities in these scenic areas. But rather than focusing on improving scenic area facilities only, we have decided to take other related issues into consideration as well, such as improving transportation infrastructure near tourist destinations. Leisure business opportunities along these 12 routes will also be taken into consideration.
TT: Has the government considered a plan to attract foreign visitors after SARS?
Su: The first thing we have to do is rebuild confidence in traveling to Taiwan, especially with tourists from our major markets such as Japan and the US. In order to do that we will consult with advertising agencies and work with travel agencies to run promotional activities, however, currently we haven't generated any concrete plans yet.
TT: Because of SARS, the nation's travel agencies are in the danger of collapse. What other plans does the government have to bail out the industry?
Su: Because of SARS, not only have foreigners stopped coming to Taiwan, but also Taiwanese have stopped going abroad. Therefore travel agencies' business has dropped a lot. They indeed need some help and the government will give them the emergency loan subsidies -- NT$1 million for each agency. We will also subsidize the 4 percent annual interest rate on those loans. There are about 1,900 travel agencies in Taiwan and all of them can apply for the subsidy.
Following requests from travel agencies, the government will also return 90 percent of the travel-agency security deposit to companies less than two years old. About 247 travel agencies in Taiwan are under two-years old.
Other than financial support, the more important thing is to offer agencies opportunities to make money. Therefore, we are now trying to promote domestic travel. While its not an easy task to increase domestic tourism, one thing we can do is encourage -- as the Premier Yu Shyi-kun has mandated -- the nation's 480,000 civil servants to take their annual group travel before August and hope that local governments follow suit. The annual trip package offers government employees a NT$6,000 subsidy.
The government also encourages civil servants to take domestic trips by taking advantage of the government-backed credit-card travel plan. The plan offers government employees a NT$16,000 annual subsidy to spend on domestic sightseeing. We estimated these measures would create NT$7.5 billion in new business.
TT: Is the domestic travel market big enough to support all Taiwan's travel agencies?
Su: No, there are too many travel agencies and many have been focused only on outbound travel for decades. It's difficult for them to convert their businesses to domestic market, but if they [convert] now they will still have a chance [in this area]. However, the major problem is how to share the pie so everybody can have a chance. The travel industry is always very competitive and therefore we needs to create a mechanism to let most companies share in the market.
We are trying to generate a proposal that the tourism bureau will negotiate with travel agency associations to develop some travel packages for government employees. Since the purchasing process is negotiated between the bureau and the association, the price-cutting or price war will be eliminated and therefore protect travel agencies' bottom lines.
Plans I mentioned above are expected to be executed between April and May, and we hope the situation with SARS in Taiwan will be under control by the end of May. We expect the tourism sector will be able to recover after that, not only to bring back inbound travelers but to rebuild people's confidence in going abroad.
TT: Tourists from China have also been targeted to boost inbound travel, but have only trickled in in small numbers because of government restrictions. Would you support a large-scale opening to this group of travelers?
Su: Chinese travelers account for a very big market, but this is a political issue. The government plans to relax the restriction in three phases, and this, the second stage, allows only mainland Chinese to enter Taiwan via third countries. However, another problem is that Chinese authorities don't allow their travel agencies to organize tour groups to Taiwan.
On behalf of the tourism bureau and taking the local tourism industry into consideration, of course we hope to see more Chinese visiting Taiwan. However, this is the country's general policy and, as officials, we have to follow that regulation.
China will be a major inbound market for us in the future. We estimate that about 20 million people in China can afford overseas travel and currently the [Taiwan] government only allows 350,000 Chinese to come per year. But I think, after evaluating accommodation's capacity in major destinations such as Alishan and Sun Moon Lake, Taiwan will able to accommodate 500,000 travelers from China per year.
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