Mon, Jul 18, 2011 - Page 3 News List

Academic warns of pitfalls of tourism policy

With the implementation of the FIT program for Chinese tourists on June 28, the government has said that the industry’s profits could increase significantly. However, in an interview with “Liberty Times” (the “Taipei Times’” sister newspaper) reporter Jennifer Huang, Shih Hsin Univeristy associate professor Chen Chih-chi said that while the program could help spur economic benefits, the public might also have to shoulder more overhead costs and social risks

Shih Hsin University associate professor Chen Chih-chi is seen in this photo taken on June 22.

Photo: Liao Chen-huei, Taipei Times

Liberty Times: What benefits and problems have there been since the government started allowing Chinese tourists to visit Taiwan in 2008? What changes could the free independent traveler (FIT) program bring?

Chen Chih-chi (陳墀吉): Any development of the tourism industry would have both positive and negative effects, and with the situation across the [Taiwan] Strait, the issue of Chinese tourists becomes even more complex.

Since the government first allowed Chinese tourist groups [to visit Taiwan] three years ago, we have had more than 2 million Chinese tourists pass through our borders. However, the economic gains generated by tourism are mostly reaped by well-connected businesses, those who know people [in the government], or those that the government has given a high evaluation.

Room and board are also concentrated within the pipelines of a few contracted businesses.

It is hoped that after the beginning of the FIT program, the money generated by the tourism industry can be more evenly spread to businesses both upstream and downstream, as well as horizontally across many other businesses.

For example, tour groups in the past were all fairly large in size and they mostly chose hotels and restaurants that were in the middle price range.

With the FIT program implemented, it is likely that more backpackers or high-end tourists will visit, and could choose either the cheaper or more expensive hotels and restaurants, bringing about a polarization of expenditure, [but also distributing wealth to more stores].

Another example is that tour groups in the past usually visited the more famous tourist sites, while the FIT program will let travelers make more in-depth tours and that will benefit a wider range of stores and businesses.

Tourists that opt for the FIT program may also rent their own cars during their trips or use public transport, so they won’t have to use large tourist buses. Furthermore, banks [and insurance firms] would benefit as group tourists usually have a designated bank which does their banking, while FITs will likely use more banking locations, rather than just one designated place. The insurance industry would also benefit as while tour groups usually buy travel insurance, FITs might opt to buy additional types of insurance.

LT: Taiwanese travel agencies have complained about low tour group fees and not being able to make any money. Some indicate that the industry is owed up to NT$5 billion (US$173 million) by Chinese travel agencies. Can you comment on this?

Chen: The Taiwanese tourism industry has long since entered the “low income” era, as most tour group incomes gross less than 5 percent. Chinese tour group fees have also dropped from US$80 in the past to a current price of US$60, with some firms going so far as to slash group fees to US$20. Besides, when Chinese tourists come to Taiwan, they are required to go through Chinese travel agencies to form tour groups, so the group fees are actually controlled by the other side, and it’s common for them to be late in payment.

That said, there are several hidden income sources in the tourism industry, such as tips and commission fees, which have led to the appearance of many shopping groups, and as a result, several tourism-related disputes.

And if a Chinese tourist “jumps the boat” [stays illegally in Taiwan], the security deposit paid by the Taiwanese tourist industry is confiscated by the government. In comparison, Chinese travel agencies confiscate the security deposit paid by the Chinese tourist, which places Taiwanese travel agencies at a higher risk and can therefore lower their profits.

This story has been viewed 12063 times.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top