The Tourism Bureau is to obtain loans from Bank of Taiwan and Union Bank of Taiwan, totaling NT$5.9 billion (US$210.65 million), to replenish the Tourism Development Fund, which was depleted at the end of last year.
This is the first time since the fund’s establishment in 1999 that the bureau has needed to take out bank loans to replenish it.
The fund was created to promote tours to Taiwan, the bureau said.
Ninety percent of the fund’s revenue comes from the airport service fee paid by outbound travelers, it said, adding that the fund receives half of each NT$500 fee.
However, borders controls imposed to contain the spread of COVID-19 dramatically reduced the number travelers, which sent fund revenue plummeting to almost zero, it added.
The bureau said that it was forced to take out bank loans to continue promoting tours to Taiwan.
The borrowed money could become available next month as the bureau said it plans to sign the loan contracts with the two banks at the end of this month.
The loans total NT$5.9 billion, with NT$3.21 billion allocated for the second half of this year and NT$2.68 billion for the first six months of next year.
The money would be used to cover the “Taiwan Tourism 2025” campaign, but could not be used for relief payments or subsidies to tour operators, the bureau said.
Once the nation’s borders reopen and there are once again travelers to pay the airport service fee, the loans would be repaid, bureau officials said.
Before the borders reopen, the bureau would carefully manage the amount borrowed from banks to avoid large interest payments, they said.
Before COVID-19, the fund grew each year thanks to a surge in travelers. At one point, the bureau used the fund to subsidize domestic tourism during off-peak travel times.
Fund expenditures also ballooned over the past few years, increasing to NT$21.3 billion.
The fund was also used to subsidize travel operators affected by the pandemic and to support government infrastructure projects.
The fund had dwindled to NT$176 million by the end of last year.
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