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The 1995 Corporate Travel Index in Taiwan

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The 1995 Corporate Travel Index in Taiwan Rochester Institute of Technology RIT Scholar Works Theses Thesis/Dissertation Collections 1995 The 1995 orC porate travel index in Taiwan Mei-hsiang Yu Follow this and additional works at: http://scholarworks.rit.edu/theses Recommended Citation Yu, Mei-hsiang, "The 1995 orC porate travel index in Taiwan" (1995). Thesis. Rochester Institute of Technology. Accessed from This Thesis is brought to you for free and open access by the Thesis/Dissertation Collections at RIT Scholar Works. It has been accepted for inclusion in Theses by an authorized administrator of RIT Scholar Works. For more information, please contact [email protected]. The 1995 Corporate Travel Index in Taiwan by Mei-hsiang Yu A project submitted to the Faculty ofthe School of Food, Hotel and Tourism Management at Rochester Institute of Technology in partial fulfillment ofthe requirements for the degree of Master of Science May 1995 FORM I ROCHESTER INSTITIITE OF TECHNOWGY School of Food, Hotel and Travel Management Department of Graduate Studies M.S. Hospitality-Tourism Management Presentation of ThesislPrQject Findin2s Name: Mei-hsiang Yu Date: 5/19/9SS#: _ Title of Research: The 1995 Corporate Travel Index in Taiwan Specific Recommendations: (Use other side if necessary.) Thesis Committee: (1) Dr. Edward Stockham (Chairperson) (2) _ OR (3) _ Faculty Advisor: Dr. Edward Stockham Number of Credits Approved: _2_C_r_e_d_i_t_s _ Date Committee Chairperson's Signature 9/~~~/tJr Date Department Chairperson's Signature Note: This form will not be signed by the Department Chairperson until all corrections, as suggested in the specific recommendations (above) are completed. cc: Departmental Student Record File - Original Student FORMK ROCHESTER INSTITUTE OF TECHNOLOGY School of Food, Hotel and Travel Management Department of Graduate Studies M.S. Hospitality-Tourism Management Statement Grantina: or Denyina: Permission to Reproduce Thesis/Project The author of a thesis or project should complete one of the following statements and include this statement as the page following the title page. Title of thesis/project: The 1995 Corporate Travel Index in Taiwan I, Mei-hsiang Yu , hereby (grant,"""'" permission to the Wallace Memorial Library of R.I.T., to reproduce the document titled above in whole or part. Any reproduction will not be for commercial use or profit. OR I, , prefer to be contacted each time a request for reproduction is made. I can be reached at the following address: 9/20/95 Date Signature The 1995 Corporate Travel Index in Taiwan by Mei-hsiang Yu ABSTRACT With the growth of its economy. Taiwan has also become more of a business travel destination. In 1994, the Taiwan's government and the tourism industry have made great efforts in promoting the tourism trade. In addition, hotel capacity and airline accessibility into Taiwan have increased. These factors have generated new opportunities and competition in Taiwan's travel industry. Business travel is indeed a controllable expense, but efficient corporate travel management requires companies to do research in the marketplace, to negotiate effectively with travel suppliers, to plan their travel arrangements carefully, and to organize the payment reports and reimbursement. The Corporate Travel Index in Taiwan is a useful resource to provide specific information to help organizations plan their business travel more effectively. This 1995 edition of Corporate Travel Index determines the average daily costs in terms of lodging, meals and car rentals in Taiwan's five main cities: Taipei. Hsinchu, Taichung, Tainan, and Kaohsiung. In addition, this study provides information on domestic and international airfares which were not included in 1993. The hotel rates were obtained from three sources: American Airlines SABRE reservation system, Hotel Taiwan 1994, and Taiwan Hotel and Restaurant Guide, 1994-1995. Food rates were gathered mainly from the latter publication. Car rental rates were collected by calling car rental firms using the 1995 Taiwan airlines' yellow pages. Domestic airfares were received by checking fare tables; international airfares were collected through the SABRE reservation system. Main The 1995 Corporate Travel Index in Taiwan departure cities were restricted to those departed from the U.S. and Canada. After current prices were determined, the difference between 1993 and 1995 was analyzed. In U.S. dollars, the 1995 CTI has estimated that the average total daily per diem in Taiwan is $222.16, which includes $104.86 for hotel, $39.46 for food, and $77.48 for car rental. In general, the average daily per diem declined by 4.11%, or $9.51, from 1993 to 1995. When viewed separately, figures reveal a 9.28% decline in hotel costs, 1.08% drop in meal costs, and 2.09% rise in car rental rates. This study also estimated that a round trip, business class air ticket from the U.S. or Canada to Taiwan is $2,160.15. An average domestic air ticket in Taiwan costs $45. Some factors contributed to the decrease in price changes. One of the main factors is the currency exchange rate that has devalued the Taiwan dollar. Taiwan's travel market has remained highly competitive during these past two years. Higher competition in the hotel industry, more business travelers drawn by Taiwan's booming economy, use of different survey size and sample, and promotions ofthe visa-free stay adopted by Taiwan's government are all important elements which explain the findings of the 1995 Corporate Travel Index in Taiwan. Acknowledgments I would like to thank Dr. Stockham for his patience and for helping me throughout this project. I would also like to thank all my friends who have given me information to complete this study. I want to thank my family, especially my parents for always loving me and supporting me. I would not be studying in the U. S. or be the person I am now without their support. TABLE OF CONTENTS Page Acknowledgments i Table of Contents ii List ofTables iv List ofFigures v Chapter I Introduction & Background 1 Problem Statement 2 Statement ofPurpose 3 Significance ofthe Study 3 Methodology & Procedures 4 Hypothesis 5 Definition of Terms 6 Assumptions 6 Scope and Limitations 7 Chapter II Literature Review 9 Corporate Travel Management 9 Expand Travel Management to Include the Necessity of Controls 9 Create and Communicate the Corporate Travel Policy 1 1 Travel Agency Services and Consolidation 12 Negotiations with Travel Suppliers 12 The Functions of Corporate Travel Department 13 Payment and Expense Reporting 14 Uses ofPer Diems and Corporate Travel Index in the U. S 15 Important Factors Which Impact on Business Travel 16 Effect ofCommissionon the Commercial Travel 17 Conclusion 17 TABLE OF CONTENTS ( Cont'd ) Page Current Environment and Tourism Market in Taiwan 18 Six-year National Development Plan 18 Economic Growth in Taiwan 18 Domestic Air Transportation 20 International Air Transportation 20 Inbound Tourists 21 Visa-free Stays in Taiwan. 23 Increase in Business Travelers 23 Hotels and Facilities 24 Chapter III Results and Analyses 28 International Airfares 28 Domestic Airfares in Taiwan 28 Total Daily Travel Costs in Taiwan 33 Daily Hotel Cost 33 Daily Food Cost 34 Daily Car Rental Cost 35 Total Per Diem Dollar by Category 45 Total Daily Cost by City 45 Chapter IV Conclusion and Recommendation 48 Recommendation 54 Bibliography 55 m LIST OF TABLES Page Table 1. Primary Economic Indicators for Taiwan, 1993-1994 19 Table 2. Changes in Hotel Occupancy Rates in Taiwan, 1993-1994 26 Table 3. International Tourist Hotels under Construction & Planning, Taiwan, 1994-1998 27 Table 4. International Airfares & Schedules from the U.S. and Canada to Taipei, Taiwan 30 Table 5. Domestic City-to-City Airfares in Taiwan, 1995 32 Table 6. Summary of Total Per Diem Cost, 1993 vs. 1995 36 Table 7. Summary of Total Daily HoteL Food and Car Rental Costs by City, Taiwan, 1993 vs. 1995 37 Table 8. Breakdown ofDaily Hotel Cost by City, 1993 vs. 1995 38 ( Cont'd ) 39 Table 9. Hotel Corporate Rate vs. Rack Rate in Taipei and Kaohsiung 40 Table 10. Breakdown of 1995 Daily Food Cost vs. 1993 Total Food Cost 41 (Cont'd) 42 Table 11. Breakdown of Car Rental Rate by City, 1993 vs. 1995 43 (Cont'd) 44 IV LIST OF FIGURES Page Figure 1. Direct T & E Expenditures by Major Cost Category for the U.S. Private Sectors, 1993 10 Figure 2. Visitor Arrivals to Taiwan, 1989-1994 22 Figure 3. Number ofBusiness Travelers to Taiwan, 1991-1994 24 Figure 4. Summary ofAverage International Airfares from Departure City in USA and Canada, 1995(US$) 31 Figure 5. Breakdown of 1 995 Per Diem Dollar, Taiwan 46 Figure 6. Comparison ofTotal Per Diem Cost by City, 1993 vs. 1995 ( not adjusted to 1993 $ ) 47 Figure 7. Average Cost of 1993 vs. 1 995 by Category, Taiwan 49 CHAPTER I INTRODUCTION Introduction & Background The rapid growth of business travel has become a strong travel purchasing power in the global travel industry. Decades ago, organizations and managers were not sensitive to controlling business travel and expense. But times have changed. Nowadays, managers believe that travel expenses are controllable and corporate travel management has become popular in organizations. In fact, for most companies, travel represents the third largest controllable expense after salaries and data processing ( Lang, 1994). In order to monitor and determine travel expense levels in the destination cities of corporate travelers, one of the strategies to help cut travel costs is to research travel services in frequently traveled cities (Shellenberger, 1993). Therefore, this study intends to provide the average costs and current travel information in Taiwan for business travelers. According to the Taiwan Tourism Bureau, there was an increase in the number of inbound visitors to Taiwan for business purpose. There was a 36% increase in the number of business travelers to Taiwan from 1991 to 1994.
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