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An empty departure hall Taiwan’s Taoyuan International Airport. Photo: EPA-EFE

Coronavirus: Taiwan’s tourism industry crumbles as virus fears add to mainland China travel restrictions

  • Tourism on the self-ruled island is suffering from the coronavirus outbreak, despite a small number of confirmed cases, government and insiders say
  • Taiwan’s cabinet has put forward a US$1.96 billion supplemental budget bill, most of which is destined for struggling local business, including tourism operators
Buffeted first by mainland Chinese politics, Taiwan’s tourism industry is now crumbling because of growing fears about the spread of the deadly coronavirus.

Taiwan on Friday had recorded just one death and over 30 confirmed cases of the virus, which has hobbled mainland China with tens of thousands of infections and in the last week began expanding rapidly in Japan, South Korea and Italy.

Although Taiwanese health officials say the cases are isolated and reject the risk of a community outbreak, tourism on the island has contracted sharply this year, according to travel agents and the government’s Tourism Bureau.

The effect on Taiwan's US$15 billion-per-year tourist sector could be a preview of things to come elsewhere, as the outbreak spreads from China around the globe.

“The travel industry of course has been impacted,” a Taiwan Tourism Bureau spokeswoman said this week. “There are fewer flights and people’s habits have changed.”

Taiwan’s cabinet approved on Thursday a US$1.96 billion supplemental budget bill, with two-thirds of the money aimed at helping local businesses, including those in the tourism sector, that have suffered virus-related losses. The plan must still be approved by the island’s legislature.

Even before the virus outbreak, tourism in Taiwan had been hit by Beijing’s decision to ban group tours and restrict individual travel to the island. The measures were suspected as an attempt to put economic pressure on voters ahead of Taiwan’s national elections in January.

President Tsai Ing-Wen, who opposes stronger ties with the mainland, was re-elected despite opposition from China’s Communist Party, which regards the self-ruled island as a renegade province.

Faced with Beijing’s political manoeuvring since Tsai first took office in 2016, Taiwan’s travel industry has been forced to diversify its tourist market.

The government has used marketing campaigns and visa waivers over the past four years to court tourists from other places, including Japan, South Korea and Southeast Asia.

But with few signs of the coronavirus being contained, that effort now appears to be becoming undone.

Travellers are avoiding Taiwan over fears the new coronavirus could spread even to places with few cases. Flight cancellations have also made visiting harder and tourists who arrive from Hong Kong or South Korea – normally strong sources of tourism for Taiwan – are being required to spend 14 days in quarantine.

Arrival figures for the past two months are not yet available, but government-run Radio Taiwan International cited private industry figures indicating that outbound tours from the island had plummeted by half from mid-January through February 22, costing domestic operators NT$3.2 billion (US$105.5 million).

Inbound and outbound travel have declined by about the same amount, said Wu Chih-chien, chairman of the Taipei Association of Travel Agents. Hotels, guides and coach operators have lost significant business, Wu said.

There are more people now who don’t want to go overseas. I can understand why they’d be afraid
Peter Lin

“There are more people now who don’t want to go overseas,” said Peter Lin, head of the Topology Travel Agency in Taiwan. “I can understand why they’d be afraid.”

A third of his bookings had been cancelled and a third postponed as of mid-February, he added.

Taiwanese travellers, meanwhile, worry about catching the coronavirus, which causes the disease officially named Covid-19, in crowded places abroad and being quarantined once they return home.

“We already cancelled a family trip to Okinawa in Japan for a spring holiday,” said Ruby Liu, 30, who works for a magazine publisher in Taipei. “Although it costs a lot, it is better to keep away from the risk of getting the coronavirus.”

Greater efforts by Taiwanese authorities to publicise its disease-prevention measures could help stem the loss of arrivals, Wu said. The government has cancelled most flights to mainland China, postponed the start of its February-through-June public school semester and blanketed the island with fever checkpoints and disinfectant stations.

“It’s not being done badly, Taiwan learned a lot from Sars,” Wu said, referring to a 2002-2003 epidemic that originated in the mainland and spread to the island. “We hope the administrative branches of government can find an open way to let people know about this internationally.”

Taiwanese student Wu Yi-hsuan said he was not worried about returning home from Switzerland later this year.

“Travelling to Taiwan is surely fine,” said the 28-year-old, who is studying for a PhD in the central European country. “The highly monitored situation and reactions by the government are trustworthy, which is shown in the relatively low rate of infection cases.”

Taiwan’s slow decoupling from the mainland Chinese tourist market – Asia’s largest – since 2016 has softened the blow of the coronavirus for some tourist-reliant businesses in Taiwan.

Taipei-based iBeenGo travel agency, which specialises in small-group tours, has seen an uptick in cancellations this year because people around Asia were worried about the virus, CEO Tseng Yen said.

But the situation could be worse if his five-year-old business depended on mainland Chinese tourists, as thousands of travel firms do across Asia, he said.

iBeenGo normally booked 500 groups per month, but the outbreak has cut that figure by 60 per cent this year Yen said, adding most clients came from Hong Kong or South Korea. He estimated he would have suffered a 90 per cent loss in revenue if his business relied on mainland Chinese.

Taiwan’s travel sector began adjustments to account for a decline in mainland arrivals in 2016 after dialogue between Taipei and Beijing broke down over political issues. Tourism from China had surged before then during an eight-year long period of positive political ties.

Government orders in Beijing and Chinese social media campaigns directed at Tsai helped contribute to a 16 per cent slump in mainland visitors in 2016 from a record 3.4 million trips in 2015. Taiwan’s total inbound travel was 10.69 million visitors in 2016 and 11.84 million last year.

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