Media reports have indicated that the Miramar Garden Taipei, which came into being on a build-operate-transfer (BOT) contract, has been over-charging, with room rates far exceeding the NT$2,300 limit that was stipulated in the contract.
BOTs are arrangements in which the government enters into a contract with a private organization to build and operate a facility. After a specified period of time it is turned over to the public sector.
The "annual average room rate" refers to the number of rooms rented and net income over the course of the entire year. Since the hotel hasn't been in service for a year, how is it possible for anyone to have calculated the annual average rate?
According to the Tourism Bureau's Monthly Report on Tourist Hotel Operations in Taiwan, income from room rentals is greatest in June and July. Room rates and profit are not necessarily as high in the following and preceding months.
CHANGED PROJECTIONS
Reports also say that after being awarded the contract, the Miramar Group conducted a citywide survey and discovered that market demand for hotels necessitated that the firm double its investment.
With more investment dollars required, later financial projections were different from the original ones.
Since the Miramar is designed to be an affordable hotel charged with maintaining five-star standards, it is necessary to approach this situation from the perspective of planning and design and by improving staff management. This was not reckless or superfluous expenditure.
Any business enterprise has a life cycle, and hotel construction is no exception. With the opening of the Miramar, the hotel proprietors and managers wanted to gain the highest possible market share. In the excitement-packed first stages of their development, new hotels become the favorite places of tourists and business travelers.
In the second stage, the arrival of new competitors splits the market and the hotel's market share falls. If bosses don't invest in renovation, this process accelerates.
In the third stage, a change occurs in the market whereby owners may choose to sell the hotel and invest somewhere else, or they can choose to update and remodel their facilities and upgrade outdated systems. They can give new life to old hotel buildings with renovations and re-establish their place in the market.
UP TO DATE
The government could gain from helping to bring old hotels up to date, rather than using BOT incentives to encourage the construction of lower-end hotels to meet increasing tourism demand.
Newly built hotels require considerable investment. Even excluding the cost of the land, which is free under a BOT deal, hotels will not see a return for quite some time because the process of planning and building lasts at least five years -- often more than 10 years. Delay in construction is another variable that has to be taken into consideration.
If the government can change strategy in an attempt to encourage owners of old hotels to take on renovation costs and spruce up their buildings, then before long they should be able to get back in business and turn a profit.
This policy would be beneficial for the government, the public and travelers alike.
Li Ken-pei is a former construction project manager for the Grand Formosa Regent Taipei.
Translated by Marc Langer
Recently, China launched another diplomatic offensive against Taiwan, improperly linking its “one China principle” with UN General Assembly Resolution 2758 to constrain Taiwan’s diplomatic space. After Taiwan’s presidential election on Jan. 13, China persuaded Nauru to sever diplomatic ties with Taiwan. Nauru cited Resolution 2758 in its declaration of the diplomatic break. Subsequently, during the WHO Executive Board meeting that month, Beijing rallied countries including Venezuela, Zimbabwe, Belarus, Egypt, Nicaragua, Sri Lanka, Laos, Russia, Syria and Pakistan to reiterate the “one China principle” in their statements, and assert that “Resolution 2758 has settled the status of Taiwan” to hinder Taiwan’s
Singaporean Prime Minister Lee Hsien Loong’s (李顯龍) decision to step down after 19 years and hand power to his deputy, Lawrence Wong (黃循財), on May 15 was expected — though, perhaps, not so soon. Most political analysts had been eyeing an end-of-year handover, to ensure more time for Wong to study and shadow the role, ahead of general elections that must be called by November next year. Wong — who is currently both deputy prime minister and minister of finance — would need a combination of fresh ideas, wisdom and experience as he writes the nation’s next chapter. The world that
The past few months have seen tremendous strides in India’s journey to develop a vibrant semiconductor and electronics ecosystem. The nation’s established prowess in information technology (IT) has earned it much-needed revenue and prestige across the globe. Now, through the convergence of engineering talent, supportive government policies, an expanding market and technologically adaptive entrepreneurship, India is striving to become part of global electronics and semiconductor supply chains. Indian Prime Minister Narendra Modi’s Vision of “Make in India” and “Design in India” has been the guiding force behind the government’s incentive schemes that span skilling, design, fabrication, assembly, testing and packaging, and
Can US dialogue and cooperation with the communist dictatorship in Beijing help avert a Taiwan Strait crisis? Or is US President Joe Biden playing into Chinese President Xi Jinping’s (習近平) hands? With America preoccupied with the wars in Europe and the Middle East, Biden is seeking better relations with Xi’s regime. The goal is to responsibly manage US-China competition and prevent unintended conflict, thereby hoping to create greater space for the two countries to work together in areas where their interests align. The existing wars have already stretched US military resources thin, and the last thing Biden wants is yet another war.