Thu, Mar 17, 2011 page12

• Drop in Japanese visitors hurts tourism

  BALANCING ACT: Tourism officials are hoping that an influx of Chinese tourists once restrictions on cross-strait visitor are lifted would make up for the drop in Japanese tourists

  • By Jason Tan, Crystal Hsu and Amy Su / Staff Reporters
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  The hospitality sector has seen falling room occupancy rates because of fewer Japanese travelers in the wake of the massive earthquake and tsunami on Friday, while travel agents acted quickly to adjust their business plans to minimize losses.

  Leofoo Tourism Group (六福旅遊集團), which operates The Westin Taipei (六福皇宮), Leofoo Hotel (六福客棧) and Leofoo Resort (六福莊), saw the number of foreign guests falling 15 percent in the wake of Japan’s powerful earthquake on Friday, chief operating officer Lulu Chuang (莊豐如) said yesterday at a media gathering.

  The disaster dealt a heavy blow to Leofoo Hotel because Japanese tourists account for 42 percent of its occupancy rate, Chuang said, adding that about 10 percent canceled reservations over the weekend and on Monday.

  Another 5 percent of US and European guests changed plans to visit Taiwan, citing radiation concerns, Chaung said.

  “The worry, while reflecting a lack of information about the nuclear crisis in Japan, may wreak havoc on the hospitality industry here,” Chuang said, calling on the government to help defuse the jitters.

  Formosa International Hotels Corp (晶華國際酒店), the nation’s biggest listed hotel operator, said yesterday it foresaw a drop of 6 percent in room occupancy rate this month, impacted by the cancellations from Japanese clients, which account for 38 percent of its total clientele.

  “The impact of cancelations from Japanese customers is still within control,” Ellen Chang (張筠), Formosa Regent Taipei (晶華酒店) public relations director, said by telephone. “We have launched contingency plans to attract guests from Singapore, Hong Kong and Macau to offset the drop in Japanese clients.”

  Luckily, Chang said, 80 percent of Formosa Regent’s Japanese guests are business travelers and they are still going ahead with their business trips to Taiwan.

  Executives of Taipei’s Grand Hotel (圓山大飯店) and Ambassador Hotel (國賓飯店) said they expected the situation to worsen in the coming months.

  The Tourism Bureau yesterday estimated a 20 percent decline in Japanese visitors over the coming three months, or more than NT$1 billion (US$33.9 million) in lost income, Tourism Bureau Deputy Director-General Wayne Liu (劉喜臨) said.

  Last year, 1.08 million Japanese people visited Taiwan, making Japan the second-largest source of tourists after China, he said.

  The ripple effect from Japan’s earthquake has also been closely monitored by the local travel industry owing to heightened concerns over the possibility of wider radiation leaks, a vice general manager of a major travel agency said on condition of anonymity yesterday.

  Many travel agencies organized cherry-blossoms sightseeing trips to Japan for later this month and early next month, and the cancellations from customers have been non-stop for the past few days, she said.

  “The impact is very huge,” she said. “The industry can’t put a loss figure to the impact just yet, but what we can say is that it is significant.”

  The Kaohsiung Association of Travel Agents said on Tuesday that its members were focusing on Chinese tourists, many of whom canceled travel plans to Japan.

  Ma Yi-lung (馬一龍), chairman of the association, said more than 90 percent of people in Kaohsiung who purchased Tokyo tour packages arriving before March 21 have canceled their reservations. Even those planning to travel to the island of Okinawa, more than 1,500km away from Tokyo, have called off their plans, he added.

  Overall, Taiwan’s hospitality stocks saw their share prices plunge for the third day yesterday, although at a less severe rate. Shares have gone down 12.1 percent over the past few days, the Taiwan Stock Exchange’s data showed.

  Formosa International closed down 4.6 percent at NT$416.5, after dipping by the 7 percent daily limit on Monday and Tuesday. Ambassador Hotel, which also nosedived 7 percent in the first two days of the week, was down 0.5 percent at NT$38.8 yesterday.

  Phoenix Tours International (鳳凰旅行社), the only travel company that is listed on the GRETAI Securities Market, dropped 1.7 percent to NT$64.5. Its stock was also down by the daily limit for the earlier two days. To offset the losses, Ma said Kaohsiung travel agents hoped Taiwan’s plan to open its doors to independent Chinese tourists between next month and May would attract more Chinese tourists.

  Taipei’s hotel managers said they have already begun a campaign to attract more domestic customers, as well as travelers from China and Southeast Asian nations.

  Kinger Lau (劉勁津), executive director at Goldman Sachs Group Ltd, said yesterday the brokerage has an overweight view on Taiwan’s tourism sector, because the decreasing tourists from Japan would be offset by increases in Chinese tourists.

  Tourists from China became the biggest driver for Taiwan’s tourism sector last year, accounting for 29 percent of all travelers to Taiwan, compared with 19 percent from Japan.

  Chinese tourists will keep growing this year because of the release of the Chinese Independent Visitors Scheme (CIVS), possibly starting from next month, Lau said at a press conference in Taipei.

  The rising spending of Chinese visitors would offset the decreasing tourists from Japan, driving up the tourism sector’s earnings and valuations, Lau said.

  ADDITIONAL REPORTING BY CNA AND AFP
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