Taiwan Will Easily Overcome China's Ban On 82,000 Tourists Per Month

(photo courtesy of Topology Travel)

China quit issuing permits August 1 for independent tourists who want to visit Taiwan, indefinitely suspending a program that had generated 82,000 arrivals per month in 2018. Those travelers, eager to see Taiwan’s cultural similarities to China and sometimes its political differences, would drop money on inns in out-of-the-way towns, eat at local diners and ride local transit.

Beijing suspended the permits to get back at Taiwan President Tsai Ing-wen, economically, for refusing to negotiate with China on a condition that both sides of the Taiwan Strait belong under the Chinese flag, analysts said last week. Taiwan received a record 11 million tourists last year with foreign exchange revenue of $12 billion. And a lot of that actually comes from Asia ex-China. Taiwan opened to Chinese tourists in 2008. Their numbers, mostly members of guided groups, peaked in 2015 at more than 3 million.

But Taiwanese businesses most likely to receive indie travelers from China will feel limited pain, one travel agency's CEO predicted in a recent interview. Peter Lin, head of Topology Travel Agency in Taipei, and his 10-member staff and 30 contract tour guides have witnessed almost the whole boom and bust of tourism from China.

Ralph Jennings: Which kinds of businesses will take a loss from the travel suspension?

Peter Lin: What’s being banned are independent tourists. Tour booking agencies will not be affected by a shift in independent travel, so it’s the hotels most affected by this. They would be clustered in travel hot spots like Taipei.

What about food and beverage?

Those kind of business operators are too spread out. There’s no clear way to say who will be affected.

How much impact do you expect on Taiwan’s transport sector?

These independent visitors are spread thinly across Taiwan, so it’s hard to say exactly who’s affected. But a taxi driver would never say ‘I’m going to make it on business from Chinese travelers.’ Most of their business comes from Taiwanese passengers. But while the impact on taxi drivers is limited, there are some companies that do drop-offs and pickups for mainland Chinese travelers. However, their scale isn’t that big. One company might employ just 20 or 30 people.

More on Forbes: Bangkok Is The Most Visited City In The World

How big is the overall impact in real terms?

The most it would take off Taiwan’s GDP would be no more than 0.2%, if there were absolutely no independent Chinese tourists.

How can the travel sector make up for lost tourists from China?

I have some friends who have Taiwanese customers. They were going to use some promotional activities to recruit mainland travelers, like giving out tourism spending coupons, and this was diverted into encouraging Taiwanese to travel locally in Taiwan. The budget to give out those coupons has been pretty much spent, and there was a knock-on effect.

Why won’t hotels and other operators see more of an impact from the suspension of permits?

The operators had already retooled their business. Since Tsai Ing-wen took office, they’ve made good preparations. Arrivals from China have declined a lot since Tsai took office. [Tsai angers Beijing by advocating Taiwan’s autonomy, not unification with China. Group travel fell 18% in 2016 after Tsai took office.] Of course, the influence of these tourists is quite large, but it’s not just today when the impact has been so large. So, operators have found other sources of tourism, like visitors from Southeast Asia.

How do you know about these trends?

We’ve been in business eight years, so we’ve seen everything from when tourists were everywhere to when they’re sparse.

Getty
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(photo courtesy of Topology Travel)

China quit issuing permits August 1 for independent tourists who want to visit Taiwan, indefinitely suspending a program that had generated 82,000 arrivals per month in 2018. Those travelers, eager to see Taiwan’s cultural similarities to China and sometimes its political differences, would drop money on inns in out-of-the-way towns, eat at local diners and ride local transit.

Beijing suspended the permits to get back at Taiwan President Tsai Ing-wen, economically, for refusing to negotiate with China on a condition that both sides of the Taiwan Strait belong under the Chinese flag, analysts said last week. Taiwan received a record 11 million tourists last year with foreign exchange revenue of $12 billion. And a lot of that actually comes from Asia ex-China. Taiwan opened to Chinese tourists in 2008. Their numbers, mostly members of guided groups, peaked in 2015 at more than 3 million.

But Taiwanese businesses most likely to receive indie travelers from China will feel limited pain, one travel agency's CEO predicted in a recent interview. Peter Lin, head of Topology Travel Agency in Taipei, and his 10-member staff and 30 contract tour guides have witnessed almost the whole boom and bust of tourism from China.

Ralph Jennings: Which kinds of businesses will take a loss from the travel suspension?

Peter Lin: What’s being banned are independent tourists. Tour booking agencies will not be affected by a shift in independent travel, so it’s the hotels most affected by this. They would be clustered in travel hot spots like Taipei.

What about food and beverage?

Those kind of business operators are too spread out. There’s no clear way to say who will be affected.

How much impact do you expect on Taiwan’s transport sector?

These independent visitors are spread thinly across Taiwan, so it’s hard to say exactly who’s affected. But a taxi driver would never say ‘I’m going to make it on business from Chinese travelers.’ Most of their business comes from Taiwanese passengers. But while the impact on taxi drivers is limited, there are some companies that do drop-offs and pickups for mainland Chinese travelers. However, their scale isn’t that big. One company might employ just 20 or 30 people.

More on Forbes: Bangkok Is The Most Visited City In The World

How big is the overall impact in real terms?

The most it would take off Taiwan’s GDP would be no more than 0.2%, if there were absolutely no independent Chinese tourists.

How can the travel sector make up for lost tourists from China?

I have some friends who have Taiwanese customers. They were going to use some promotional activities to recruit mainland travelers, like giving out tourism spending coupons, and this was diverted into encouraging Taiwanese to travel locally in Taiwan. The budget to give out those coupons has been pretty much spent, and there was a knock-on effect.

Why won’t hotels and other operators see more of an impact from the suspension of permits?

The operators had already retooled their business. Since Tsai Ing-wen took office, they’ve made good preparations. Arrivals from China have declined a lot since Tsai took office. [Tsai angers Beijing by advocating Taiwan’s autonomy, not unification with China. Group travel fell 18% in 2016 after Tsai took office.] Of course, the influence of these tourists is quite large, but it’s not just today when the impact has been so large. So, operators have found other sources of tourism, like visitors from Southeast Asia.

How do you know about these trends?

We’ve been in business eight years, so we’ve seen everything from when tourists were everywhere to when they’re sparse.

Getty

As a news reporter I have covered some of everything since 1988, from my alma mater U.C. Berkeley to the Great Hall of the People in Beijing where I followed Communist o...