Fri, Jun 21, 2019 - Page 12 News List

Hospitality sector could benefit as firms move home

By Crystal Hsu  /  Staff reporter

A realignment of the global electronics supply chain could benefit the local hospitality industry if the government uses the opportunity to repatriate capital from China, Formosa International Hotels Corp (FIH, 晶華酒店) said.

Repatriation of capital could boost Taiwan’s GDP growth by 1 to 2 percentage points a year and increase the number of business travelers by 5 to 10 percent, FIH chairman Steven Pan (潘思亮) told reporters on the sidelines of a shareholders’ meeting on Tuesday.

It could even reverse the persistent decline in business travelers over the past two to three decades, which was a result of local firms moving their manufacturing facilities to China, lured by cheaper land and labor costs, Pan said.

More than 70 Taiwanese firms based in China have filed applications to bring high-end production lines home to avoid US tariffs on Chinese goods, bringing in investments totaling NT$375 billion (US$12.02 billion) and creating 34,100 jobs, government data showed.

Those figures could increase as the government has provided low interest rates, tax credits and other incentives to promote relocation.

“Taiwan could become the second-largest beneficiary after Vietnam ... if the government plays its cards wisely,” Pan said.

FIH has already seen an increase in business travelers arriving in Taiwan for relocation meetings, he said.

Business travelers generally spend three times as much as leisure travelers, Pan said.

FIH would look at opening new properties at home and abroad, although the local market has grown overcrowded with new players joining almost every week, he said.

Shareholders approved plans to distribute a cash dividend of NT$11.075 per share from last year’s earnings per share of NT$10.80, suggesting a payout ratio of 102.55 percent.

FIH said it plans to offer dividends to shareholders on a quarterly basis.

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