Asian Cities Report | Hospitality

GRAPH 1 Tourism in Taiwan ranking for international association Number of inbound visitors, 2008–1H/2015 In line with recently observed meetings, Taiwan ranked 28th by trends, the total number of inbound hosting 145 meetings in 2014 and travellers to Taiwan climbed to moved up three places to fourth Others Southeast Asia Europe 9.91 million in 2014, representing a place among Asia-Pacifi c countries, America China South Korea only behind Japan, China and Hong Kong & Macao Japan Total % YoY (RHS) 23.6% increase year-on-year (YoY), 12,000,000 30 the second highest increase since Korea. These events generated a 2008. Tourists from Asian countries total output value of NT$36.8 billion 10,000,000 25 accounted for 90%, with mainland last year and drew 188,883 foreign China representing 40%, followed attendees to Taiwan, representing a 8,000,000 20 6% growth YoY.

YoY % YoY by Japan (16%), and Hong Kong

6,000,000 15 and Macau (14%). Since mainland Chinese tourists have been allowed to Most of international meetings are 4,000,000 10 apply for travel visas, the proportion hosted in and , which Internationalarrivals visitor of inbound travellers accounted for organized 92 and 23 international 2,000,000 5 by mainland Chinese has grown from meetings last year respectively. In order to encourage Taiwan’s MICE 0 0 29% to 40% in three years and now 08 09 10 11 12 13 14 1H/15 plays an important role in Taiwan’s industry, local governments have tourism market. been tasked with building new Source: Taiwan Tourism Bureau, Savills Research & Consultancy exhibition centers which can meet The impact of mainland travelers is the requirements necessary to host not only being felt in Taiwan, and they international events. For example, Kaohsiung Exhibition Center was GRAPH 2 have now assumed a key position completed in 2013 and expects Hotel room stock, 1H/2011–1H/2015 in the global tourism industry. Over 100 million Chinese citizens travelled to generate over NT$20 billion of abroad last year, 70% of whom business. Taipei World Trade Center headed to Hong Kong, Macau and Nangang Exhibition Hall II, which is International traveller hotel Traveller hotel General hotel under construction, will be launched 180,000 Taiwan. Compared with Hong Kong which attracted 47% of all China in 2017. The city’s two exhibition 160,000 travellers, the Taiwan tourism market venues, including Hall I and Hall II, 140,000 still has a lot of potential, accounting will be able to accommodate 5,000 120,000 for only 4% of mainland Chinese standard booths upon completion and 100,000 overseas trips in 2014. six hoteliers have announced plans to 80,000 establish new branches in the area. No. of rooms 60,000 As for Taiwan’s second largest Hotel stock and future 40,000 inbound tourist source, the weaker supply Japanese yen has discouraged 20,000 In the past twelve months, 96 hotels Japanese from travelling abroad, 0 have opened in Taiwan providing 1H 2H 1H 2H 1H 2H 1H 2H 1H with the total number decreasing 11 12 13 14 15 9,881 rooms, equal to 6% of total by 3% YoY to 16.9 million in 2014. room stock. 95% of the new supply is Source: Taiwan Tourism Bureau, Savills Research & Consultancy As a result of successful tourism classifi ed as falling within the general promotion campaigns by the Taiwan hotel segment, usually meaning two Government, however, and an or three star hotels, with clusters in increase in the number of direct major cities such as Taipei (1,996 GRAPH 3 fl ights, especially for budget airlines, rooms), (1,263 rooms) International tourist hotel occupancy rates, Japanese tourist numbers grew by and Tainan (1,108 rooms). We have 2009–1H/2015 15% in 1H/2015 compared with last noticed a tendency among some year. However, the global economic hoteliers to target second-tier cities

Taipei City Kaohsiung City Taichung City Total slowdown is likely to see the tourism which are close to tourist attractions, 80 market lose some momentum and the such as Taitung County and Chiayi impact has already been seen in total City, adding 777 rooms and 766 75 inbound tourist numbers which only rooms respectively since the second increased by 3.4% over the fi rst half half of 2014. In Taipei and Taichung, 70 of 2015, the lowest fi gure since 2008. due to the diffi culty of sourcing large scale sites, the average size of newly % 65 MICE industry launched hotels is usually less than

60 In light of the economic benefi ts 100 rooms. of the MICE industry, the Ministry

55 of Economic Affairs has been According to the Tourism Bureau, actively promoting this sector over there are at least 50 hotels with a total 50 the past few years. According to of 21,000 rooms opening in the next 09 10 11 12 13 14 1H/15 ICCA’s (International Congress and fi ve years. Aside from these, more

Source: Taiwan Tourism Bureau, Savills Research & Consultancy Convention Association) annual world than 20 hotels are at the planning

02 2H 2015

stage. In Taipei, Nangang and DaZhi and 6 new hotels will open in the GRAPH 4 areas are the most competitive next fi ve years representing a total of International tourist hotel room rates, 2009– locations. In Nangang area, Nangang 1,511 rooms. Exhibition Hall, which is going to 1H/2015 Taipei City Kaohsiung City Taichung City Total replace the World Trade Centre Compared with other international 6,000 in Xinyi District to be the most hotel chains, Marriott is late to important exhibition venue in Taiwan, market but is expected to expand 5,000 will generate stable accommodation fast. Taipei Marriott Hotel in Dazhi, demand and should attract higher launched at the end of 2015, is its 4,000 budgets. Currently, six hoteliers are fi rst hotel in Taiwan. Leofoo Tourism going to expand their branches and Group is also planning to introduce 3,000 a luxury hotel (465 rooms) to Taipei’s we expect the total number of hotel NT$ per room rooms here will increase to over Nangang District under the Courtyard 2,000 1,000, exceeding total stock in Xinyi by Marriott brand. In addition, Cathay District. Hospitality Management Co. also 1,000 plans to open a hotel in Taipei CBD in 0 The development of the Dazhi area is 2018 under the Courtyard by Marriott 09 10 11 12 13 14 1H/15 positioned to focus on entertainment brand. and retail functions. Due to strict Source: Taiwan Tourism Bureau, Savills Research & Consultancy zoning regulations concerning Occupancy rates and minimum development lot size, hotels room rates in this area are larger. In addition, The average occupancy rate for adjacent to Neihu Technology Park, international hotels fell by 4.32 TABLE 1 hotels can attract high spending percentage points (ppt) to 68.12% business travellers. Three 5 star in 1H/2015. The same situation has Selected future hotel supply, Q4/2015–2018 hotels, including Grand Mayfull Hotel also been seen in three major cities (146 rooms), Taipei Marriott Hotel (320 with Taipei dropping by 2.83 ppt, International Number Year to Name Location rooms) and Howard Plaza Hotel (320 Kaohsiung by 3.82 ppt and Taichung hotel chain of room complete rooms) are now under construction in by 2.19 ppt. Even though occupancy Tainan Crowne Plaza IHG Tainan City 193 Q4/2015 Dazhi. Taipei Marriott Hotel, owned by rates have fallen slightly, average Hotel The Westin Tashee Sherwood Plaza Ltd, is part of a large room rates have remained fi rm. The Starwood Taoyuan City 205 Q4/2015 scale mixed-use development with average room rate for international Resort 198 high end residential units, a retail hotels in Taiwan increased by 3.6% Taipei Marriott Hotel Marriott Taipei City 320 Q4/2015 mall and a convention centre and a to NT$3,803 in 1H/2015. As for Taipei Leofoo total fl oor area on full development general hotels, the average room rate Marriott Taipei City 465 Q4/2015 Courtyard by Marriott of 62,250 ping (205,400 sq m). It has improved, increasing by 8% to is scheduled for an offi cial launch NT$2,190. Positive growth was also Aloft Taipei Beitou Starwood Taipei City 292 Q3/2016 this December and will also see the observed in specifi c counties such as fi rst Marriott Hotel in Taiwan with Yilan, Hualien and Kinmen Counties, Le Meridien Taichung Starwood Taichung City 228 Q1/2018 an expected average room rate of which have all enjoyed double-digit between NT$6,500 and NT$6,800 in growth. the fi rst year of operation. Source: Taiwan Tourism Bureau, Savills Research & Consultancy Outlook International hotel Even though the number of inbound groups travellers is expected to keep growing InterContinental Hotel Group (IHG), in the near future, the sector is highly TABLE 2 Starwood and Hyatt have operated reliant on mainland China tourists and Selected international tourist hotels in Taipei, in Taiwan since the 90’s. Aside from the abundance of hotels currently in 1H/2015 Hyatt which only has one hotel in the pipeline is making some operators Room rate Taiwan, IHG and Starwood have anxious about the future. Some Occupancy rate Hotel No. of rooms (NT$ per room in 1H/2015 (%) expanded their number of branches hoteliers are shifting their target from per night) aggressively. Currently, IHG has tour groups to independent travellers. 3 brands and 4 hotels in Taiwan, Under these conditions, differentiation 405 9,659 77 including Crowne Plaza Hotels & and correct market positioning will be Le Meridien 160 9,766 72 Resorts, Holiday Inn Hotels & Resorts the key to success.  and Holiday Inn Express Hotels. At The Regent Taipei 538 5,645 79 the end of 2015, Tainan Crowne Plaza

Hotel (193 rooms) is scheduled to 420 7,191 50 opened. Starwood is the most active international hotel chain in Taiwan The Westin Taipei 288 6,286 77 with 5 brands and 6 hotels, including Sheraton, LE MERIDIEN, Westin Taipei Average 4,890 74 Taipei, Four Point Sheraton and W Hotel. Their expansion will continue Source: Taiwan Tourism Bureau, Savills Research & Consultancy

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