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Trends in Taiwan's Tourism Market Visions in Leisure and Business Volume 16 Number 3 Article 3 1997 Trends in Taiwan's Tourism Market Kuan-Chou Chen Follow this and additional works at: https://scholarworks.bgsu.edu/visions Recommended Citation Chen, Kuan-Chou (1997) "Trends in Taiwan's Tourism Market," Visions in Leisure and Business: Vol. 16 : No. 3 , Article 3. Available at: https://scholarworks.bgsu.edu/visions/vol16/iss3/3 This Article is brought to you for free and open access by the Journals at ScholarWorks@BGSU. It has been accepted for inclusion in Visions in Leisure and Business by an authorized editor of ScholarWorks@BGSU. TRENDS INTAIW AN'S TOURISM MARKET BY DR. KUAN-CHOU CHEN, PRESIDENT KCC CONSULTING 1200 HAPPY HOLLOW RD. WEST LAFAYETTE, INDIANA 47906 ABSTRACT has an area of approximately 14,000 square miles. In 1979, Taiwans government relaxed the outbound travel market. The situations of Taiwan currentlyranks amongthe top dozen inbound and outbound travel market are trade countries in the world. In 1994, gradually changing. The number of out­ foreign trade earnings exceeded US$ 178 bound travelers exceeded inbound travelers billion. Per capita GNP was US$ 11,604, for the first time in 1989. With one of ranking Taiwan 23rd in the world. Foreign Asias highest economic growth rates, a huge exchange reserves equaled US$ 92.4 billion, accumulation of foreign exchange and which exceeded the reserves accumulated by appreciation on outbound travel, Taiwan has any other country in the world. As its become a source of outbound tourists economy has grown, both inbound and second in Asia only to Japan. From 1981 to outbound tourism for business and pleasure 1995, the average growth rate of outbound have increased. Taiwan is now the 9th travelerswas 18% per year. largest tourist receiving countryin Asia, and tourism is the 7th largest contributor to the This study examines the recent trends in country's foreign exchange earnings. At Taiwans inbound and outbound travel present, it attracts 1.8 million foreign markets, analyses the structure of the travel tourists a year. They stay on average nearly market and offers a perspective for the a week and contribute gross expenditures to future. the economy equivalent to US$ 1. 7 billion annually. INTRODUCTION Before 1989, the number of foreign travelers to Taiwan exceeded the number of Taiwan is situated in the Pacific Ocean Taiwanese traveling abroad. With one of about 100 miles offthe southeastern coast of Asia's highest economic growth rates, a the Chinese mainland. Located about mid­ huge accumulation of foreign exchange, and way between Korea and Japan to the north appreciation on outbound travel,Taiwan has and Hong Kong and the Philippines to the become a source of outbound tourists south, Taiwan is a natural gateway for second in Asia only to Japan. The number travelers to and within Asia. Taiwan is of outbound travelers exceeded inbound about 234 miles long and 88 miles wide and travelers for the first time in 1989. From 1981 to 1995, the average growth rate of 16 outbound travelerswas 18% per year. Since In the mid 1970s, Taiwans inbound market 1987 the growth has increased even more moved into the second stage, because the rapidly and this remarkable rate of growth is economy was growing rapidly. The stan­ expected to continue forthe next fewyear. dard of living improved and infrastructure improvements increased as the result of the This paper will investigate Taiwan tourism inbound travel trend. Taiwan exceeded one trends, including a secondary data situation million tourist arrivals for the first time in analysis of its outbound and inbound travel 1976. Growth in arrivals took place each markets. The objectives of this paper are to year during the early 1980s; the first decline examine Taiwan's tourism industry and its after 1974's energy crisis-induced decline impact over the next five to ten years. This was not recorded until 1985. However, effort will serve to create a comprehensive from 1980 to 1984, the annual growth rates tourism development plan for tourism were not as high as in previous years, authorities and less ambitious marketing averaging 2.5% a year. Although Taiwan strategiesfor individual organizations. exceeded 1.5 million tourist arrivals for the first time in 1984, it was a hard struggle to reach and maintain this level for the next THE INBOUNDMARKET year. The decline of 1985 was the result of long-term visa difficulties, insufficient In Table 1, over the period 1959-1995, investment in and development of tourist inbound travel increased from 19,328 visits areas and attractions, declining ground to 2,331,934 visits, a hundred-fold increase. handling service standards, a low level of The development of the inbound tourism overseas marketing activity, and fierce market in Taiwan is divided into two stages. competition from neighboring countries In the first stage (1950s-1970s), the people's ( 10). Since then, in order to keep the standard of living had been low; the major tourism industry growing and expand the national development policy was the focus economic benefits across the country, the of the development of agriculture, government has sought to improve tourist manufacturing, trade, and finance. Before facilities and develop attractions in all parts 1960, less than 20,000 tourist arrivals per of the country. It also spent much more year were recorded. In 1964, the money on overseas marketing activities for government of Japan permitted its people to promotions to attract visitors from the 1986 travel abroad. Japan has become the largest Asia Games and the 1988 Olympics (both inbound tourism market for Taiwan. held in nearby South Korea). Thus, from Japanese tourists are attracted to Taiwan 1986 to 1988, there was again a high visitor­ because of its nearby location, its similar arrival growth rate, averaging 10% a year. culture and history, and its low costs. The number of foreign visitors to Taiwan Especially, most Taiwanese are able to reached a peak and broke the two million communicate with Japanese tourists in markin 1989, but the growth rate was not as Japanese. Tourism from Japan made high as that in the previous three years. Taiwan's inbound tourism market grow rapidly. The period between 1959 and 1973 In 1990, the number of inbound tourists was was one of strong and sustained growth, 1.9 million, down 3.5% from the previous averaging 30.6% a year. Due to the serious year. This situation has sustained for four global oil crisis in 1973, 1974 was the first years (1990-1993). The major reasons for yearthat recorded a decline. this decline was the global economic 17 recession. It reduced a lot of inbound travel, Thailand and Philippines became two rapid both leisure and business. Another reasons growth countries in Taiwans inbound travel for these declines was the rapid appreciation market. of New Taiwanese (NT) dollars. Because of Taiwans rapid economic growth and in­ Table 4 displays visitors arrivals to Taiwan creasing amounts of disposable personal from main markets by residence in the past income, NT became the "hot money" in the ten years. The growth rates of foreign world. Since 1988, the exchange rates to visitor arrivals in Taiwan largely depend on the U.S. dollar has been up from NT $40.1 the Japanese market Japan advocated its to about NT $27.5. When this deterrent is "Ten Million Program" to boost outbound combined with limited international air travel to 10 million by 1992, but Taiwan's routes and airline capacity and strong market share in Japanese outbound travel competitive pressure from neighboring still fell. (Table 4) Visitor arrivals to countries,this rise made Taiwan a high-cost Taiwan from main markets by residence destination. 1986-1995 did not increase with this opportunity. The growth rates of visitor For the purpose of comparison of the major arrivals from Japan has also declined since travel inbound markets, Table 2 and 3 ranks 1987. In 1990, the Japanese began to tourist generating countries according to the sustain negative growth for four years. number of foreignvisit arrivals in Taiwan in Until 1994, when it returned to normal 1990 and 1994. The major inbound travel growth rate. markets have been generated by Asian countries and the United States. In 1990, Hong Kong is the source for the vast almost half of the market share came from majority of overseas Chinese visitors to Japan, with 47.4%, followed by the U.S.A. Taiwan. Since China eased its travel with 11.6%, Hong Kong with 10%, and restrictions, many Hong Kong visitors have South Korea with 7.8%. These four most turned to travel in China. The Hong Kong important generators accounted for a total of market has produced continuous negative 76.8% of all international visitor arrivals. growth rates of visitor arrivals since 1987, Other important Asia origins were Singa­ averaging -6.6%. It returned positive pore with 3.1 % and Malaysia with 2.6%. growth rate in 1992, paused by China The main European generating countries reclaiming control of Hong Kong in 1997. were West Germany and the United An immense wave of emigration began in Kingdom (U.K.). However, in 1994, the Hong Kong in response to anxieties over the market structure has been changed. impending1997 handover of sovereignty. Although Japan supplied more than 914,325 visitors and still had the largest market share There has been remarkable growth rates of (39.2%) in 1994, Japanese v1s1tation visitor arrivals from South Korea due to declined by 8.2% between 1990 and 1994. liberalization of its outbound travel. The U.S.A., Hong Kong and South Korea kept gradual lifting of its long-standing outbound steady growth.
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