Abstract
Why buy this report
- Get insight into trends in market performance
- Pinpoint growth sectors and identify factors driving change
- Identify market and brand leaders and understand the competitive
environment
Product coverage
Airline capacity and utilisation; Arrivals by country of origin; Arrivals by
mode of transport; Arrivals by purpose of visit; Car rental services by
sector; Demand factors; Departures by destination; Departures by mode of
transport; Departures by purpose of visit; Domestic tourism by destination;
Domestic tourism by mode of transport; Tourism receipts and expenditure;
Tourist attractions; Transportation; Travel accommodation; Travel retail
services
Executive summary
1. EXECUTIVE SUMMARY
Increased government involvement
Supported by the government's efforts in promoting Taiwan as a tourist
destination for international travellers, total arrivals reached over 3
million by the end of 2005, representing a strong increase of 29% over the
review period. The major purpose of visit for arrivals shifted from business
to leisure during the same period. Tourism revenues as a percentage of GDP
increased to 3.9% in 2005 from 3.5% in 2000.
The National Development Plan proposes to double the number of tourist
arrivals between 2005 and 2008, making Taiwan an attractive market over the
forecast period. The government also plans to focus on quality rather than
quantity and heavily promote specific destinations such as Taipei 101,
National Palace Museum, Kaohsuing's Love River, Alishan, Sun Moon Lake, Taroka
Gorge and Kenting.
International events subdue outgoing departures
Outgoing traveller numbers were restrained by international crises, such as
the SARS outbreak and the Asian Tsunami, with the total number of Taiwanese
departures increasing moderately by 12% between 2000 and 2005. In value terms,
outgoing expenditure declined by over 18% over the same period, as the
Taiwanese chose to take holidays closer to home for shorter and cheaper breaks.
Strong growth in domestic tourism
The two-day weekend, along with freely available information on food and
travel destinations, continues to fuel the domestic tourism industry, while
the country's economic slowdown in 2005 mean that more people are choosing
domestic destinations over overseas trips. The total number of domestic trips
increased from just over 85 million in 2000 to 115 million in 2005, a leap of
approximately 35% for this period.
Competition drives rapid improvement in travel accommodation
The travel accommodation market witnessed an upturn over the review period.
This was driven by frequent improvements in the quality of hotel facilities
and services, while intensive competition kept prices low. Accommodation
operators also sought to cooperate with other service providers so as to
include accommodation in their packages; an example of this is the range of
partnerships with credit card companies which incorporate accommodation into
their promotions. Accommodation providers started utilising a range of
different channels to reinforce their brand name. In 2005 there was growth of
5% in travel accommodation, due mainly to the strong performance of 'other'
travel accommodation, which includes the local Minshu, and also the
performance of chained international hotels.
Leading airlines increase differentiation to attract customers
Competition between the two giant air transport players continues to be
intense. In addition to adding new routes and providing more comprehensive
services to enhance the flying experience of their passengers, both
international carriers focused their marketing efforts on different points of
differentiation. China Airlines Co Ltd concentrated on offering low prices,
while EVA Airways Corp continued to emphasise its strengths, particularly with
regard to its safety record.
Marginal growth in transportation of 2% in 2005
The Taiwanese transport market is quite mature and is the largest in value
terms within overall travel and tourism. Over the review period, there was an
increase in car ownership in Taiwan, a major factor restricting overall demand
for transport, especially with regard to short trips. In order to encourage
greater use of public transport and to stimulate sales, buses and train
operators raised the quality of their services. Low cost international air
carriers entered the market in the second half of 2004, but only managed a
very sluggish performance. These services are yet to take off due to limited
routes and flight times and poor scheduling.
Leisure car rental spurs growth of 12%
Leisure car rental is the best performing sector, being driven almost
exclusively by domestic demand, thanks to the new official two-day weekend.
The leisure sector in 2005 captured almost 79% of car rental sales in value
terms. Car rentals for leisure purposes began to pick up in 2001, following
the introduction of a two-day weekend. The main target customers for leisure
car rentals are white-collar consumers living in urban areas, followed by
university students.
Travel retail slows down in 2005 but still maintains second fastest growth
Overall travel retail steadily increased in 2005, with Free and Easy packages
the major driver of growth. Growth in Free and Easy packages coincided with
the rise in importance of online travel retailers, which dominate sales of
these packages. The most popular choices for these Free and Easy packages are
city breaks, island resorts and multiple destinations. Another factor in the
growth of Free and Easy packages was these products' ability to expand the
overall travel market through appealing to younger consumers, who are
attracted by these packages' greater flexibility.
Online travel retailing grows in importance
Online travel retailing, the emerging travel retailing format, forced
traditional travel retailers to respond to changes in market reality. Star
Travel was the fastest growing virtual travel retailer over the review period,
while South East Travel Service Co Ltd and Lion Travel Service Co Ltd were
among the first traditional travel retailers to move their business into the
online world.
Free and Easy packages driving growth
Dynamic packages, or Free and Easy packages, is a new concept that only
emerged in the early 2000s, and by the end of the review period was the
fastest growing travel retail product. These packages are the most popular
holiday format among young Taiwanese. Free and Easy packages offer a bridge
for online travel retailers, allowing them to diversify away from just
ticketing, to move into the more traditional style package oriented sales.
Large potential of Chinese market
In January 2005, the government made moves to open Taiwan to travellers from
China, in an attempt to tap into the burgeoning number of Chinese overseas
holidaymakers. The industry believes that this move will result in a large
increase in visitor traffic in the medium term, due to cultural links between
the two countries. Despite the high expectations, however, the real potential
of this entirely new market is difficult to estimate.
Internet to lead growth in tourism industry
Internet transactions within travel and tourism in Taiwan are expected to
increase significantly over the forecast period. Internet sales of travel
retail products and air tickets, in particular, will see growing importance by
the end of 2010. More moderate growth in internet sales is predicted for
travel accommodation and car rentals.
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