Fri, Mar 02, 2018 - Page 12 News List

Difficult year ahead for hotels amid falling revenue, rising competition

By Crystal Hsu  /  Staff reporter

The hospitality industry might have another difficult year following a small decline in hotel revenues as well as occupancy and room rates last year, as the number of inbound tourists stagnates, while competition increases, the Taiwan Tourist Hotel Association said yesterday.

“Last year proved bumpy for the sector, and the earthquake on Feb. 6 in Hualien has dealt another blow to eastern Taiwan,” said Lai Cheng-yi (賴正鎰), association chairman and head of Shining Building Business Co (鄉林建設) and resort hotel chain Lalu (涵碧樓).

The number of inbound travelers last year grew just 0.46 percent to 10.74 million, while hotel revenues were virtually flat at NT$58.93 billion (US$2 billion), a marginal increase of NT$12.8 million, Lai said, citing government data.

However, room sales weakened 0.4 percent to NT$25.61 billion, with occupancy shrinking 1.55 percent to 64.84 percent and average daily room rates shedding 1.46 percent to NT$3,771, he said.

“The performance is worrying and deserves attention from government authorities if Taiwan aims to boost its tourism industry,” he said.

Despite terror attacks, France continues to top other nations as a travel destination, Lai said, adding that Taiwan lags behind the region’s 6 percent increase in foreign tourist numbers.

Economic improvement and stock rallies help bolster travel interest, but fall short of lifting the industry’s profit margin due to intensifying competition, Hotel Riverview Taipei (豪景大酒店) chairman Kevin Hou (侯博文) said.

The four-star hotel near Taipei’s MRT Ximen Station saw its occupancy rate hold at 75 percent last year, thanks to its convenient location and a 5 percent cut in room rates to NT$2,200, Hou said.

Occupancy has risen to 90 percent this month, as the city government is holding the Taipei Lantern Festival in Ximending this year, and might average 80 percent amid a stable economy, he said.

“That might not help the profit margin as raw material prices and labor costs surge,” Hou said.

The increase in Southeast Asian and individual Chinese tourists helped mitigate the pain of the falling number of Chinese tour groups in northern Taiwan, but hotels elsewhere continue to suffer.

Individual travelers usually visit Taiwan for three days and therefore limit their exploration to major cities with convenient transportation, association secretary-general Ho Chung-ching (何鍾錦) said.

Taoyuan has benefited from the travel trend. South Garden (南方莊園) in Jhongli District (中壢) expects its occupancy rate to rise 10 percent this year, general manager Randy Hsu (許峻程) said.

The association called on the government to build large-scale tourist attractions and develop marine tourism to take advantage of Taiwan’s geography.

“That requires deregulation of boat parking and management rules,” Lai said.

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