China and Korea present the most immediate and lucrative opportunities for Taiwan’s hospitality industry. Around 5.6 million travellers visited Taiwan during the first seven months of this year.

Around 5.6 million travellers visited Taiwan during the first seven months of this year, an increase of nearly 27% over the same period the year before. Visitors from mainland China accounted for nearly 41% of the total, an increase of more than 34%. Other important visitor sources included Japan, Hong Kong and Macau, the US, Southeast Asia, and increasingly, Korea.

“The global hospitality sector in Taiwan is seeing a strong appetite for growth,” says Marcel N.A. Holman, general manager of the 420-room Shangri-La’s Far Eastern Plaza Hotel, Taipei, one of the Hong Kong-based hotel group’s two properties on the island. It also has a 336-room property that opened in the southern Taiwanese city of Tainan in 2008.

“Building on positive tourism arrivals from China, Hong Kong, and the US, etc., the outlook for the hospitality industry is expected to bloom in the coming years.”

The increase in the number of arrivals from mainland China has been growing ever since cross-straits ties improved and travel restrictions were relaxed in 2011. As a result, hoteliers have been scrambling to cultivate this increasingly lucrative market. One of Shangri-La’s advantages is that – with two five-star properties in Hong Kong and several more on the mainland – the chain enjoys a high level of brand recognition among well-heeled mainland Chinese travellers.

“We are definitely working on the development with attractive packages for Chinese visitors and business travellers,” Holman says. “What makes us unique is our people, the teams that make it happen. Shangri-La Hotels and Resorts is a well-established brand in Asia, with very strong brand recognition in Taiwan and mainland China.”

Both China and Korea represent significant growth opportunities for Taiwanese hoteliers.

Key markets

“Due to the increasing number of inbound flights and cities issuing visas, China has become one of the most important markets,” says CK Leong, general manager of the five-star, 606-room Howard Plaza in Taipei.

“According to statistics from the Tourism Bureau of the Republic of China (Taiwan), the Chinese market has increased by 37% during the first eight months of this year compared to the same period in 2013.”

The number of inbound travellers from Korea is also starting to pick up steam. According to the Tourism Bureau, there was a 35% increase in the numbers from Korea during the first eight months of this year, and leisure travellers accounted for most of this growth.

Interestingly, Korea’s wildly popular pop culture is partially responsible.

“An increasing number of Korean variety shows are being filmed in Taiwan,” Leong says. “The popularity of these shows offers great exposure for Taiwan.”

The Regent Taipei, in the capital city’s bustling Zhongshan district, is recruiting Korean-speaking staff because of the increasing number of Korean guests, a spokesman for Regent Hotels and Resorts reports.

The hotel’s average occupancy over the last 12 months has been 82%. Looking forward, the spokesman expects occupancy rates to remain steady and for room rates to increase by 3% to 5%. About 38% of the five-star hotel’s guests are from Japan.

The domestically based LDC Hotels & Resorts Group has 14 properties scattered about the island. Included are urban hotels in large cities such as Taipei, Taichung, and Kaohsiung, as well as resort hotels in such leisure travel destinations as Sun Moon Lake, Hualien, and Miaoli.

Eddie Tsai, supervisor of the group’s public affairs department, estimates that 958 new hotels will have been built in Taiwan between 2008 and 2016.

“Over the past five years, there have been 5.1 million guests staying at the hotels run by L’Hotel de Chine as well as 11.3 million diners,” Tsai says. “In 2014, the growth of the dining business has been as high as 20%.”

One of the group’s strategies is to develop more freestanding food and beverage outlets. Three new ‘off premises’ restaurants were opened recently in the Southern Taiwanese city of Kaohsiung, and two more will open in New Taipei City in the fourth quarter of 2014.

“By the second quarter of 2015, LDC will have seven off-premise dining businesses with 8,000 seats in total, the highest in the Taiwan hospitality industry,” Tsai says.

Positively challenging

As new operators and additional properties continue to arrive in Taiwan’s hospitality industry, Shangri-La’s Holman believes the challenges will make the industry more competitive.

“For the hotel, the competition is fierce, yet it is also because of this challenge that we have a chance to progress and demonstrate our competitive advantages. With the emergence of many competitors, it always reminds us how much we need to constantly strive to be the best and to stand out.

“Whether it is to provide top-notch quality products or creative services, Shangri-La is aiming to hold its leader stance in this competitive market. I believe Taipei will see an influx of more tourists from home and abroad, and it will surely attract more new international brand hotels to settle in the city.”

The hotel also launched an upgrade project in late 2013 that will include renovation of the hotel’s ground floor and all of its guest rooms.

“With our newly renovated rooms, we are highly confident in presenting a home-away-from-home feeling to each of our valued guest,” Holman says. “Especially with our fully renovated rooms and suites in early 2015, we are seeing the average room rate exceed NT$8,000 (US$270), or even reach NT$9,000 (US$300) per night.”

Enhanced food and beverage options will also have an impact.

“We are seeing a good influx of travellers and an increasing demand for business events,” Holman says. “We’ve launched the hotel’s rebranded Japanese restaurant from the original ibuki. The rebranding transformed the restaurant into the first and only in Taiwan to be operating with a Michelin-starred approach, featuring Michelin two-starred chef Takagi Kazuo who leads the culinary team.”