When Sashe Kim from South Korea is planning his overseas vacations, he spends little, if any, time pondering his destination. The 26-year-old was so captivated by Taiwan when he first traveled to the country in 2013 that he has returned twice since. “Taiwan has a wide range of cultural, historical and natural attractions as well as an abundance of affordable accommodation options,” he said during his most recent trip in February. “This combination makes visiting the country really enjoyable and keeps me coming back.”
Kim is among a growing number of international tourists choosing to spend their vacations exploring Taiwan. Visitor arrivals reached a record high of more than 9.9 million in 2014, posting a year-on-year increase of almost 24 percent, according to the Tourism Bureau under the Ministry of Transportation and Communications. In total, visitors spent approximately US$14.6 billion during their stays last year, up around 19 percent from 2013, data from the agency shows. The bureau, which is responsible for the country’s overseas tourism promotional campaigns, aims to hit 10.5 million international visitor arrivals this year.
Leisure travelers accounted for nearly 73 percent of all overseas visitors in 2014, Tourism Bureau statistics show. Victor Yang (楊士儀), a section chief at the agency’s Hotel, Travel and Training Division, says the robust growth in the tourism sector has significantly enhanced the operational efficiency of hotels, while encouraging many business groups to construct new facilities or refurbish old properties. “The number of establishments is constantly increasing, and hotel companies are regularly investing in boosting their capacities and remodeling their premises,” he notes.
The lobby of the five-star Regent Taipei, one of Taiwan’s best-known luxury hotels (Photo by Chin Hung-hao)
The Tourism Bureau categorizes local hotels as either tourist or regular establishments. To receive the coveted tourist hotel title, businesses must meet requirements concerning the size and number of rooms; have facilities such as cafés, conference or meeting rooms, and restaurants that meet the bureau’s specifications; and pass inspections. Once classified as tourist hotels, lodgings can form part of official promotional campaigns. The bureau has also developed a five-star ranking system for the nation’s hotels, and establishments that undergo inspections and receive a rating are listed on the agency’s website.
Currently, there are 114 tourist hotels nationwide, with a combined total of 26,724 rooms, in addition to almost 3,000 regular establishments and more than 5,000 guesthouses. The bureau’s statistics show that last year tourist hotels posted an average occupancy rate of 72 percent, compared to 69 percent in 2013, while the average room rate for such businesses rose to NT$3,712 (US$120) from NT$3,621 (US$117) during the same period.
The massive rise in tourist arrivals in recent years has led to significant diversification in the types of accommodations in Taiwan. “Visitors can now choose from a huge variety of lodgings, ranging from luxury, boutique and budget hotels to guesthouses,” Yang says. Several companies, he observes, have adopted a multibrand strategy to tap different market segments. For instance, the Ambassador Hotel Group and FIH Regent Group, both of which are based in Taipei and are known for their five-star establishments, have developed new businesses to appeal to free independent travelers (FIT)—an industry term used to refer to tourists, generally young people, who travel as couples or in small groups and avoid package holidays.
Silks Place Taroko, located in Taroko National Park in eastern Taiwan’s Hualien County, is a five-star establishment operated by FIH Regent Group. (Photo courtesy of FIH Regent Group)
The section chief also notes a trend toward cross-sector cooperation, with many hotel firms forming collaborative arrangements with artists, designers, and meetings, incentives, conventions and exhibitions (MICE) companies. “The main issue facing hotel operators is how to cultivate a distinct brand identity amid a flourishing yet increasingly competitive business environment,” Yang notes. “Many companies are tackling this challenge by integrating art, culture, fashion and technology into their establishments to offer guests more well-rounded experiences.”
Similarly, Lai Cheng-i (賴正鎰), chairman of the Taiwan Tourist Hotel Association (TTHA), says that local operators are increasingly focusing on developing unique interior designs. “Companies are trying to enhance the overall sensory experience of staying at their lodgings by providing gourmet food and creating soothing atmospheres through the use of soft lighting and stylish modern décor,” he says.
The hotel sector is among the key beneficiaries of the massive growth in international visitors. A survey conducted by the Tourism Bureau on visitor expenditures in Taiwan shows that travelers spent an average of US$224.07 per day in 2013, with hotel bills occupying the second-largest share of total consumption at 32.16 percent, behind only shopping at 35.74 percent. The TTHA chairman says that around 2,500 hotels and guesthouses have been set up since 2010 to cater to the influx of travelers, while more than 40 new tourist hotels will be built in the next three years. “We’ve seen a rise in the number of luxury hotels trying to attract wealthy visitors and MICE clients as well as small boutique establishments targeting FITs,” he says.
Given that business travelers’ expenditures typically exceed those of leisure visitors, Lai urges the government to relax visa regulations and extend the length of stays for businesspeople, especially those from mainland China. “This would help ensure that Taiwan’s accommodations industry achieves sustainable long-term growth,” the chairman says.
A musician performs during breakfast at Ambience Hotel in Taipei, one of 10 budget establishments owned by Taipei Inn Group. (Photo by Chin Hung-hao)
Ellen Chang (張筠), executive director of marketing and communications at FIH Regent Group, notes that Regent Taipei has seen a steady increase in foreign business travelers since the beginning of the decade. Amid this growth in business, the firm has launched comprehensive renovations to Regent Taipei’s lobby, banquet halls, guest rooms and restaurants over the last two years.
Founded in 1991, FIH Regent Group operates hotels, restaurants and high-end boutiques. In 2010, the company acquired the Regent brand from the US-based Carlson Group, including all associated intellectual property rights and operational control over 17 hotels around the world. Regent Taipei, the group’s most well-known local establishment, has 538 guest rooms and features an arcade of fashion boutiques, seven restaurants offering a wide selection of Eastern and Western cuisines, and a health and leisure club equipped with a gymnasium, an indoor pool, and sauna and spa facilities. “We aim to offer the finest in accommodations, amenities and dining to not only meet but exceed our guests’ expectations,” Chang says. “These efforts have enabled us to gain and retain customers.”
Currently, around 80 percent of Regent Taipei’s guests come from overseas, mainly Japan, Europe and the United States. “I’ve stayed at many upscale hotels around the world, but Regent Taipei is my favorite as its atmosphere, food and rooms are all excellent,” says Jimmy Fujiwara, a frequent guest from Tokyo. “I even bought the same bedding that Regent uses for my own home, and I store some personal effects at the hotel since I stay here whenever I come to Taipei.”
In recent years, FIH Regent Group has established two new brands targeting different consumer segments. It launched its Silks Place brand in 2008 to differentiate the three establishments that it acquired or built near popular historical or natural attractions. These five-star properties, which are located in Hualien County, Yilan County and Tainan City in eastern, northeastern and southern Taiwan, respectively, primarily cater to families and have architectural and interior designs that highlight aspects of local culture. Then in 2009, the company founded its budget chain, Just Sleep, which currently has six branches across the island.
The Tianmu branch of Dandy Hotel in Taipei exhibits works by local artists in its public spaces. (Photo by Chin Hung-hao)
Growing competition is also encouraging companies to develop unique offerings within the same market segment. Taipei Inn Group, founded in 2005, currently operates 10 budget hotels under four brands—Ambience, CityInn, Dandy, and Hotel 73—each of which has different design aesthetics and amenities. Taipei Inn’s general manager Thomas Ho (何太山) says his group opted to set up budget chains due to the substantial growth in the number of FITs visiting Taiwan. The company’s 10 establishments, nine of which are in Taipei with the other located in central Taiwan’s Taichung City, are mostly in the downtown areas and feature striking interior designs.
“We want to provide our guests with memorable experiences and stylish accommodations at affordable prices,” Ho says. “So we invite artists to exhibit their works in our hotels’ public spaces, illustrators to cover the walls of our guest rooms with their creations, and musicians to perform during folk festivals and certain meal times.” In addition, all of Taipei Inn’s establishments offer complimentary drinks and snacks in their lobbies as well as free Internet access and laundry facilities. These strategies, he says, have enabled the firm’s hotels to record occupancy rates of 90 to 95 percent.
Ho is upbeat about the prospects for the nation’s accommodations industry, citing increasing international awareness of Taiwan as a holiday destination. Chang, meanwhile, echoes the general manager’s optimistic assessment concerning future growth in the sector. “Hotels in Taiwan are widely considered to have better cost/performance ratios than their counterparts in Hong Kong, Japan and Singapore,” she says. “Due to the government’s aggressive campaigns to promote the country’s tourism sector as well as industry-wide efforts to improve facilities and services, I’m confident we can attract greater numbers of foreign travelers in coming years.”
Write to Kelly Her at kher@mofa.gov.tw