Asian City TW Hotel 2H 2018
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Savills World Research2H 2018 Taiwan Asian Cities Report Taiwan Hospitality 2H 2018 savills.com.hk/research savills.com.hk/research 01 Asian Cities Report | Taiwan Hospitality GRAPH 1 Tourism in Taiwan YoY to USD13.3 billion in 2017. The Number of inbound arrivals, 2008 – 1H/2018 As the tension between Taiwan and structural change in inbound tourism Mainland China continued unchanged, resulted in the decreases in average the number of inbound arrivals trip length and daily expenditure. China Japan Southeast Asia remained stable in 2017. However, Travellers from Southeast Asia, the Hong Kong & Macau Others Total % YoY (RHS) the tourism market witnessed its second largest arrivals source, come 12,000,000 30% lowest growth rate in overseas tourist with lower budgets for shopping numbers since 2003, up a marginal and accommodation, with their 10,000,000 25% 0.46% to 10.74 million. The signifi cant average daily expenditure at US$152, 15% less than the overall average. 8,000,000 20% decrease in mainland visitors caused Japanese travellers, who used to arrive % YoY a huge impact. Arrivals dropped by 6,000,000 15% 22.19% year-on-year (YoY), and the with higher budgets, have turned mainland market share decreased from conservative and their spending has 4,000,000 10% 33% to 25% as well. declined by 11% YoY to US$214 per No. of inbound arrivals day, largely owing to the depreciation 2,000,000 5% Fortunately, the shrinkage in numbers of the Japanese yen. of Chinese tourists has been offset by 0 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 1H/2018 Southeast Asian and South Korean In terms of expenditure categories, visitors. Owing to several successful accommodation accounted for 38% of Source: Taiwan Tourism Bureau, Savills Reserach & Consultancy tourism promotions by the Taiwan total travel budgets and shopping was Tourism Bureau, such as a visa-free 28%. Both categories experienced program and an encouraging Muslim- signifi cant declines, with shopping friendly environment, travellers from decreasing by 13% YoY, followed by GRAPH 2 Southeast Asia increased by 29.2% accommodation (-5% YoY). As the Inbound tourist consumption by country YoY in 2017 and, with a market proportion of Chinese visitors travelling and expenditure type, 2017 share of 20%, surpassed Japan to independently exceeded 50%, their become the second largest source shopping budgets dropped by 14%. Accomodation Shopping Other spending of inbound arrivals. The fast growth As for the decline in accommodation came predominantly from Vietnam spending, the rise in popularity of US (USD156) (94% YoY), the Philippines (69% YoY) hostels and B&B’s coupled with the South Korea (USD195) and Thailand (49% YoY). In addition structural changes of inbound tourism to Southeast Asia, South Korea and the increase in young travellers Southeast Asia (USD152) contributed one million visitors in made inexpensive accommodation Hong Kong/Macau (USD184) 2017, recording a 19% growth rate more popular. compared with 2016. As for Japanese China (USD184) travellers, Taiwan’s third largest source New supply and stock of inbound tourists, stagnant growth New supply has recorded a slowdown Japan (USD214) meant the country didn’t meet the two for two consecutive years; in the past Total (USD179) million visitors’ target set by the Taiwan 12 months 91 hotels, totalling 8,192 Tourism Bureau. Outbound Japanese rooms, opened. However, this total 0% 20% 40% 60% 80% 100% travellers increased by 5.4% in 2017, still ranks as the fourth-largest amount however, Japanese travellers to Taiwan of annual new supply, which means Source: Taiwan Tourism Bureau, Savills Reserach & Consultancy grew by only 0.17% in the same period. a certain portion of hoteliers remain confi dent about the tourism market. In 1H/2018, Taiwan’s overall inbound Total market stock has increased by 4% to 3,429 hotels with 188,936 GRAPH 3 traveller numbers grew by 3.82%. The number of Chinese tourists might hit rooms. About 90% of new supply International tourist hotel occupancy rates, the bottom and up 3.8% in 1H/2018 fell into the hotel category with 28% 2009 – 1H/2018 after decline for a certain period. of that located in Taipei City (2,080 However, the Hualien earthquake in rooms), following by Taichung City Taipei City Kaohsiung City Taichung City Total (1,313 rooms), and Yilan County (1,192 80% February had a negative impact on the tourism industry, adversely affecting rooms). Three international tourist 75% South Korean arrivals, which dropped hotels opened during the same period: by 4.1% in 1H/2018. Despite that, the Caesar Park Hotel Banqiao in New 70% total number of inbound travellers in Taipei City (400 rooms), Hotel Orchard 2018 is expected to stay at the same Park in Taoyuan County (187 rooms), 65% level as last year. and Crowne Plaza Tainan in Tainan County (230 rooms). 60% Inbound tourist consumption Caesar Park Hotel Banqiao, operated 55% While inbound arrivals have remained by local group Caesar Park Hotels and stable, the total annual amount in Resorts, is the fi rst fi ve-star hotel in 50% 2009 2010 2011 2012 2013 2014 2015 2016 2017 1H/2018 visitor expenditures has witnessed a New Taipei City and targets business decline for three consecutive years. and MICE travellers. Optimistic about Source: Taiwan Tourism Bureau, Savills Research & Consultancy Visitor expenditures dropped by 8% the long-term outlook, Caesar Park 02 2H 2018 Hotels and Resorts is going to launch Taiwan, Mitsui Fudosan continues to GRAPH 4 another four hotels in Taipei and explore hotel prospects in Taipei City. International tourist hotel room rates, 2009 – New Taipei City by 2019 and expand With its planned launch of three hotels to over 3,000 rooms in total. After in Taipei CBD by 2024, Mitsui Garden 1H/2018 investing NT$300 million in renovations remains the most active Japanese Taipei City Kaohsiung City Taichung City Total and joining the Hilton brand, Hotel investor in Taiwan so far. 6,000 Orchard Park reopened to focus on international tourists. Occupancy rate and 5,000 vacancy rate The fast-changing tourism market In 2017, the average occupancy 4,000 caused several hotel development rate for Taiwan’s international tourist projects to postpone or fall behind hotels decreased by 1.08 percentage 3,000 their launch dates. According to point (ppts) to 66.5%, marking room NT$ per Taiwan Tourism Bureau, 33 tourist two consecutive years of decline, 2,000 hotel projects totaling 11,810 rooms according to the Taiwan Tourism 1,000 are in the pipeline, however, only 40% Bureau. Apart from Taipei City, two of projects are on schedule. Once a other major cities - Taichung City and 0 development project breaks ground, Kaohsiung City - witnessed a decrease 2009 2010 2011 2012 2013 2014 2015 2016 2017 1H/2018 it is diffi cult to pull back or cancel in occupancy rates, with Kaohsiung construction. Therefore, hotel investors City recording the steepest decline, Source: Taiwan Tourism Bureau, Savills Reserach & Consultancy maintain a cautious attitude and wait six ppts to 63.5%. In the fi rst half of for a clear sign from the market. 2018, however, the hotel industry remained competitive and the fall in the As for existing hotels and hotels under occupancy rate remained. Across the TABLE 1 construction, in the face of intense island, the average occupancy rate is Selected new hotel supply, 2018 – 2022 competition, they remain eager to 62.5%, 2.3% lower than that recorded cooperate with global hotel chains in in 1H/2017. Five of seven international Scheduled Hotel Location Room Hotel chain order to expand their customer base. tourist hotels in Taichung City opening By 2022, Marriott International and experienced declines in occupancy Kimpton Taipei City 129 IHG 2018 IHG will open 20 and 11 new hotels rates. Renaissance Taipei Marriott Taipei City 104 2018 in Taiwan, respectively. New brands Shihlin Hotels International Marriott continue to enter the market, with Countyard Hotel Taipei City 227 2018 Average room rates for international International IHG planning to launch Kimpton and tourist hotels performed better in Hyatt Hotels Park Hyatt Taipei City 200 2020 InterContinental Hotels & Resorts, and 1H/2018, increasing by 2% YoY to Corporation Hyatt Hotels Marriott International introducing both NT$3,866. Three major metropolitan Andaz Taipei City 300 2020 Corporation Fairfi eld by Marriott and Renaissance areas all recorded slight growth, Hotels. Hyatt Hotels Corporation has ranging between 2% to 4%. Chain Holiday Inn Express Chiayi City 150 IHG 2020 Mitsui Garden Hotel Taipei City 300 Mitsui Fudosan 2020 teamed up with Riant Capital, an hotels have a strong advantage in Taipei investment company in a mixed-use developing customer loyalty. Two Hotel Gracery Taipei City 248 Fujita Kanko Inc. 2020 development project that will bring leading fi ve-star hotels, W Hotel Mitsui Garden Hotel Taipei City 350 Mitsui Fudosan 2022 two of its luxury brands - Park Hyatt and Le Meridien, maintained strong Taipei Train Station and ANdAZ - to Taiwan and provide room and occupancy rates even in Source: Savills Research & Consultancy another 500 rooms in Xinyi district by the diffi cult market, and Silks Club, a 2022. This will be the fi rst time in 27 recently-launched luxury brand from years that Hyatt has launched new the Silks Hotel Group recorded the hotels in Taiwan, after the opening of highest room rate - NT$7,840 - in TABLE 2 the Grand Hyatt Taipei in 1990. The Kaohsiung, making it 239% higher new project is likely to challenge all than Kaohsiung's average room rate. Selected international tourist hotels in Taipei contenders for the most expensive 1H/2018 hotel room in Taipei City. Hotel market outlook Room rate Occupancy rate A steady infl ux of new hotels coming Hotel No.