Good or Bad? Taiwan records highest foreign tourist arrivals growth worldwide

In short, Taiwan sees a huge increase of tourists, mostly Mainland Chinese. But on average they spend less, thus ignoring the negative affects of increased number of tourists.

An article by The China Post with the title “Taiwan records highest foreign tourist arrivals growth worldwide” was circling around Taiwan’s online media and social networks in October 2014: “Taiwan registered the highest growth in foreign tourist arrivals in the world in the first half of the year, according to the United Nations World Tourism Organization (UNWTO). In a report, the UNWTO said that foreign tourist arrivals in Taiwan for the first six months of the year rose 26.7 percent from a year earlier. […] The UNWTO report also showed that Taiwan’s international tourism revenue for the first half of the year rose 18.5 percent from a year earlier, behind only Japan […] and South Korea […] in the world’s rankings”.

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The growth of foreign tourist arrivals in Taiwan is not necessarily a positive thing as it sounds. The quantity and the revenue are related to each other, however the ratio grew differently.

The average expenditure of the incoming international tourists in the first half of 2014 is 93.5% of the price paid in the first half of 2013. The inbound tourists spent 6.5% less than last in the first half of 2013. In other words, Taiwan is basically getting more people into the country, but those people spend less.

From a simplified economics model, we can see that having more tourists, does not necessarily mean higher profit in the same ratio of either revenue growth or quantity (tourists) growth.

Where do the tourists come from? China!

The 26.7% growth in tourists is 1,015,878 in absolute numbers. Of this amount, Mainland Chinese count as 53.6%, or 63.6% if Hong Kong and Macau are included. Just for comparison, in the growth from 2013 to 2014, the US, Europe, Australia and New Zealand count only 15%. This means that visitors from mainland China are the majority in this growth (Tourism Bureau, 2013, 2014).

The meaning of this is that the Taiwanese tourism industry is and will change towards the needs of mainland Chinese tourists, even though it means lower prices and more tourists, which hold some uncalculated externalities. air pollution from transportation, noise pollution, pressure on water and energy systems, and social change in the rural areas of Taiwan, are just a few examples of affects of the increasing tourists that are not taken into account and paid by the whole society and environment.

It also means that a tourism industry aimed towards Chinese customers, the services are not those sought by westerners. It also means that Taiwan tourism industry will depends on closer ties with Mainland China, which some Taiwanese regard as something that should be afraid of .

This is made possible due to raising the quotas that R.O.C. gives to mainland Chinese. In 2014 it was raised to 5,000 for groups, and 4,000 for individuals (Lee, 2014). From January 1st 2015, Chinese from the mainland can visit Penghu, Kinmen and Matsu with a permit on arrival scheme, and quotas were abolished (CNA).

Taiwanese is going through big change in the tourism industry with opening its gates to more Mainland Chinese tourists, both groups and individuals. Will officials only look at the increasing number of tourists? or also the average expenditure and the affects on the rest of the tourism industry? Just wait and see.

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