The tourism sector appeared excited about the looming arrival of Chinese tourists after the government announced last week the easing of travel rules for people from across the Taiwan Strait. Analysts said the short-term economic benefits are likely to be seen in the service industry, but added the overall effect depends on other factors.
"We expected the opening-up policy to create over NT$50 billion of output value, benefiting the nation's service sector, including tourism, hotels, department stores and airlines," said Tseng Sheng-hai (
Tseng said most travel agents mainly want to target upscale Chinese visitors who can afford charges of over NT$60,000 for posh 10-day tour packages.
"These tourists are expected to exert strong purchasing power in Taiwan," Tseng said, citing estimates from Hong Kong that each tourist from China spends as much as HK$2,800 (NT$11,530, US$360) per day on average during their visits to the territory.
The association has been entrusted by the government to negotiate with its Chinese counterparts on the matter, but Tseng declined to comment on when and where talks will be held. A Chinese-language newspaper last week reported that cross-strait discussions will take place in Macau on Aug. 27, but didn't say where it had obtained the information.
Economic boost
The government currently allows only two categories of Chinese people to visit Taiwan -- those who live overseas, and those who live in China but plan to go to Taiwan for commercial purposes or en route to other countries.
The relaxation is expected to allow 365,000 Chinese tourists per year, or 1,000 people per day, to visit Taiwan as their main destination for a maximum of 10 days, coming through either Hong Kong or Macao.
"The estimate of NT$50 billion in production value could be equivalent to 0.5 percent growth on top of the nation's gross domestic product [GDP], which amounts to around NT$10 trillion," said Chou Ji (周濟), director of the Center for Economic Forecasting at the Chung-Hua Institution for Economic Research (CIER, 中經院).
This could be expanded to reach over 1 percent if the nation's service providers reinvest profits from the increasing demand in equipment and manpower, the economist predicted.
"This could mean a lot to the nation's economy as its export growth slows," Chou said, citing the bright economic performances of some of the Asian countries that welcome Chinese tourists, including Hong Kong, Singapore and Australia.
CIER last month lowered its GDP growth forecast for this year to 3.8 percent, while the Taiwan Institute of Economic Research (TIER,
A boon for hotels
Chinese tourists could be a lifesaver for the struggling hotel industry, which has been suffering from falling occupancy rates in the last four to five years, as an increasing number of Taiwan companies relocate abroad, in turn reducing the number of inbound business visitors.
"We expect the Chinese tourists to add an extra 10 percent to 15 percent to the current occupancy rate of 67 percent in Taipei City, which has dropped from over 70 percent four to five years ago," said Sean Chuang (
Construction segment
An average occupancy rate exceeding 75 percent would require the city to build more hotels to accommodate the rising demand, which would benefit not only the hoteliers but the construction sector, said Chuang, who is also president of Leofoo Development Co (
Betting on the potential business boom, Chuang said he is planning to build more hotels at sites popular among Chinese tourists, such as Sun Moon Lake (
But the world's tallest skyscraper, Taipei 101, could be the biggest beneficiary of the relaxed policy as Chinese tourists are said to be eager to visit the landmark.
The Observatory, located on the 89th floor of the Taipei 101 building, at a height of 382.2m, currently attracts an average of 5,000 visitors per day, Taipei 101 Mall's public relations manager Shieh Wen (
With an admission fee of NT$350 for each adult and that of NT$300 per person for groups with more than 20 visitors, Shieh said that the Observatory could rake in extra sales of over NT$100 million annually from the Chinese visitors. Accordingly, the Taipei 101 Mall is expected to enjoy 20 percent growth in annual sales, Shieh added.
Airlines shrug
The nation's airlines, however, do not seem excited about the extra business, as additional 1,000 Chinese visitors per day is a relatively small base compared to the nearly 20,000 travelers who use services between Taipei and Hong Kong or Macao, according to estimates from both EVA Airways Corp (長榮) and China Airlines (華航).
"The opening-up of direct links is the real boost we want," EVA's spokesman Nieh Kuo-wei (
Despite all the optimism, another economist was doubtful that the positive effects would emerge quickly and smoothly, citing uncertainties such as the industry's overly bullish expectations and possible policy flip-flops.
The long-term separation of the two sides of the Strait makes Chinese visitors curious to come to Taiwan, but their excitement may fade if they feel the actual scenery is not as appealing as imagined, said Cheng Cheng-mount (
The risk of Chinese remaining in the country illegally may rise along with increasing numbers of visitors, which could result in the policy being tightened in the future, Cheng said.
The government should think about relaxation of rules for visits of Chinese professionals to Taiwan, as they are more stable and traceable, and opening up in this area is more urgently needed by multinational companies, he added.
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