Industry Focus: The Road Less Traveled --- A Survey of the Tourism Industry

Taiwan has big ambitions for its tourism industry over the next six years. But there are a lot of hurdles in the way, including lack of resources, infrastructure, and marketing experience.


By Jim Boyce

In this survey:

* Where in the world can you find a few million people who want to visit Taiwan? Try inviting over the neighbors.

* Letting Chinese tourists into Taiwan would boost the economy, create thousands of jobs and, claim some, improve cross-strait relations. So why does getting them here seem to be such a long and arduous journey?
* Getting Taiwan known as a tourist destination will take more than a big promotion budget. Finding out what visitors like is crucial.
* Taiwan has no shortage of things to see and do, but it sorely lacks the infrastructure for people to enjoy them.
* The central government has a detailed six-year plan for steering Taiwan's tourism industry towards greater prominence, but can it get local leaders to come on board?
* The need for balance between respect for aboriginal traditions and the benefits of tourism holds lessons for Taiwan's travel plans as a whole.

Journey Into the Unknown

Taiwan's tourism mandarins have big, bold plans for the future, but the industry is mired in difficulties right now.

One week before the government unveiled bold plans for developing Taiwan's tourism industry, a group of journalists at Sun Moon Lake, one of the country's most revered scenic spots, got a sense -- or rather a whiff -- of the task that lies ahead. There to cover an international sporting event, they checked into a hotel and quickly noticed a familiar and nearly overpowering odor wafting into the lobby. The source: a stream of sewage arcing into the lake from a pipe behind the hotel. Click, click went the cameras.

A more jarring illustration of the gap between the government's grand plans for developing tourism and the reality at ground zero would be hard to imagine. For Sun Moon Lake is a key component of a six-year plan to double the number of foreign visitors to Taiwan -- not including a potential windfall of Chinese tourists. The projected economic benefits of this plan are huge, including the creation of at least 370,000 jobs (directly or indirectly linked to tourism), a 60% boost in the travel industry's contribution to GDP, and the spurring on of substantial infrastructure development.

Sun Moon Lake's excrement aside, to say that many roadblocks lie between the government's lofty ambitions and their fulfillment would be a gross understatement. To merely become capable of handling the influx of millions of additional visitors, Taiwan will need to do a big job of improving its facilities: from building or upgrading hotels, to widening access roads, to expanding its passenger capacity at the two international airports. That's just to get them to where they want to go. Once arrived, providing these visitors with service at an international level will require, among other things, better training for tour guides and deciding once and for all on a single Romanization system for Taiwan's road signs.

Even assuming Taiwan can get its house in order, there is still the daunting task of convincing people why they should want to visit Taiwan. Not only will this entail giving the Tourism Bureau a much bigger promotional budget, but it will require building a professional marketing machine that is capable of finding out how current visitors feel about Taiwan, rather than just asking them their nationality and travel itinerary.

Perhaps more critically, Taiwan needs to get its political house in order. Until now, tourism has not been a high priority nationwide, and its development has undeniably been constrained by a lack of cooperation between the central and local governments. The resulting disconnect does not bode well. While national leaders may understand what is needed to establish an international-standard tourism industry, they will undoubtedly find that local interests -- as the Sun Moon Lake case shows so vividly -- can easily torpedo the best-laid plans. If that isn't a meaty enough issue on the government's plate, it will also need to establish better relations with other countries, notably mainland China and South Korea, in order to fully open the door to tourists.

Taiwan's Tourist Attraction
To be fair, not everything in Taiwan's tourism industry is a daunting challenge. The country is blessed with many attractions, from the stunning scenery of its eastern coast to its cuisine and art -- arguably the best showcases of Chinese culture in the world. And for its part, in the past few years the Tourism Bureau has slowly but steadily been developing scenic areas across the island, laying an important foundation for the future. Even the mere 2.6 million visitors that came to Taiwan last year, which made it one of the least visited countries in Asia, can be seen in a positive light: It leaves plenty of room for growth. (In fact, marketing Taiwan as an "undiscovered" destination may be one of the best bets.)

There are few doubts about where that growth will come from. Japanese tourists have long been the industry's bread and butter and no one is expecting that to change. Next-door neighbor China also holds out the promise of providing a massive boost to Taiwan's travel businesses. One survey shows that some 25 million people there want to visit the "renegade province," which would be enough to keep the entry gates at major tourist spots swinging for decades to come.

Given such prospects, it's little wonder the government is keen on developing tourism. Not only does it fit into Taiwan's shift from manufacturing to a service-based economy, it should also be one of the "green" industries so favored by the current administration. But green is the word when it comes to Taiwan's tourist industry. For better or worse, this is a relatively new route for the country as a whole -- a road less traveled -- and plenty of bumps can be expected along the way.

Asia for the Asians

Where in the world can you find a few million people who want to visit Taiwan? Try inviting over the neighbors.

The Sunday afternoon hodgepodge of food stalls, penny games, and eyeball-to-eyeball traffic along Tamsui's waterfront makes a casual observer wonder where the government would put those extra millions of foreign tourists it wants to attract each year. Yet come back to this north coast town on a Monday morning and the answer is obvious: visitors are slim pickings during the working week. In fact, the task of filling high Monday-to-Friday vacancy rates at attractions around Taiwan is a driving force behind plans to boost tourism.

One solution is to get Taiwanese to travel during the week. The government is encouraging vacationing employees to do this by providing some NT$8,000 worth of yearly incentives per person, and Minister without Portfolio Lin Sheng-Fong says there are more ideas circulating, such as encouraging school kids to travel during the week and introducing a "traveling credit card" that gives discounts on low-volume days. Another is to bring in more foreigners on short itineraries. What could be better than to have them fly in on Monday, spend five days getting around to those few attractions already up to international standards, and then take their leave on Friday? It would boost Taiwan's economy without creating a great need to build hotels, restaurants, or roads, since the visitors would simply use up the current infrastructure's idle capacity.

The problem, of course, is actually finding the tourists envisaged in the government's six-year plan -- an additional 2.6 million of them annually, to be exact. This lofty target requires a 12% annual jump in visitors for the next six years, a rate surpassed only once in the past two decades (15% in 1994). Another somber fact is that the last time Taiwan's visitor rate doubled, it took 23 years -- from 1.27 million in 1978 to 2.62 million in 2000 -- to accomplish. Even from a global perspective, this target is hugely ambitious: the World Travel & Tourism Council's potentially brightest star over the next decade, Turkey, is only expected to see 10.2% yearly growth in its travel sector.

Alas, this is not the first time Taiwan's government has set such seemingly impossible-to-reach goals. The Tourism Bureau's annual report from two years ago, for example, carries the highlights of the "New Development Strategy for Taiwan's Tourism in the 21st century," a more modest plan created under the Ministry of Transportation and Communications. One of its aims: Boosting the number of annual visitors to 3.5 million by 2003. Barring divine intervention, it won't happen.

Given all this, it's understandable that some in the government have politely described the goal of doubling the number of visitors as "challenging." But there is also strong consensus, including among travel agents and academics, that Taiwan's tourism industry is poised to make great strides.

Great strides are surely feasible given that Taiwan, with 2.6 million annual visitors in 2001, falls far behind the numbers put up not only by a brand name tourist destination like Thailand (10.1 million) but also by fellow Asian tigers Singapore (7.5 million) and South Korea (5.1 million). It finds itself in the company of less secure, underdeveloped spots such as the Philippines (1.8 million) and Vietnam (2.3 million). Also revealing is that visitors to Taiwan in 2001 were only slightly more likely to cite leisure (991,000) than business (836,000) as the reason they came. For other visitors, though, business took precedence, particularly among Europeans (5 out of 6) and Americans (about 1 in 3). Add to this the hundreds of thousands of arrivals who are workers from Southeast Asia or students, and it is easy to see how much Taiwan is a largely undiscovered place for most international leisure travelers.

From Tokyo With Dollars

So, where to start looking for potential visitors? The best bet is in the region. Forget visitors from China for the sake of the current target -- they are not part of the government's six-year plan. It is Japan that is seen as the linchpin for success. In 2001, Japanese made up 37.1% of all visitors to Taiwan and a whopping 59.6% of those citing leisure as their reason for coming. They were also by far the biggest spenders at US$256 per day, outpacing visitors from other key sources such as Hong Kong (US$185), the U.S. (US$180), and Singapore (US$170).

Despite this, the Japanese tourist sector seems far from tapped out. Minister Lin, who heads up the Executive Yuan's Tourism Development and Promotion Committee, says Japan is "the first [market] we will focus on." It is already the major source of Tourism Bureau promotions, says Bruce Liu, deputy director of the Tourism Bureau's International Division, with half of last year's NT$200 million international promotion budget being spent there.

When looking toward Japan, Taiwan can draw inspiration from South Korea, which hosted 2.37 two million Japanese last year. True, it is a cheaper place to visit than Taiwan and is closer to Osaka and Tokyo, but Walter Chen, director of inbound travel at South East Travel Service, a firm specializing in Japanese visitors, says the "number is ideal and is possible" for Taiwan to achieve. He says that Taiwan has features that make it no less attractive than Korea. These include having a population which, for historical reasons, has a more favorable disposition toward Japanese, many (though not enough) Japanese-speaking tour guides, and attractions, from hot springs to night markets, that please the Japanese.

Bringing in increased numbers of Japanese, however, is not just a matter of willing it. First, far more effort needs to be made in promotion. Second, infrastructure capacity needs to be expanded: extra flights will have to be arranged, hotels built, and tour guides trained. This last point is especially important, as tour guides must be able not only to speak Japanese, but understand the culture's mannerisms, for as Chen says, "the Japanese are very picky about service." Finally, expanding the Japanese market requires an understanding of the demographics. According to Chen, who says his company handles 80,000 Japanese tourists per year, an increase in numbers would mean a shift in focus from the standard customer profile (men, aged 50-60, who typically come in large groups and often on company trips) to more women, retirees, and people in their 20s and 30s.

Rounding Out the Numbers

While Japan may be the sumo-sized factor in Taiwan's tourism sector, Hong Kong is also considered a crucial contributor. It is Taiwan's second biggest source of tourists, and the only place besides Japan that sends more leisure (220,700) than business (86,000) visitors. Bringing in more Hong Kongers, says C.T. Su, deputy director general of the Tourism Bureau, is less about convincing them Taiwan is an interesting place to visit and more about making the visa process easier. Currently, only those Hong Kongers making their second trip to Taiwan can get a landing visa (though accompanying family members making their first trip also qualify). Expanding this category and making first-time visas easier to obtain, says Chen Sz-Reng, associate professor in Shih Hsin University's Department of Tourism, will bring instant payoffs. "If the availability of visas is made more convenient, then you will see the figure for tourists from Hong Kong increase about 20% right away and most of them will be for leisure." He adds that entry visas are a major factor tourists consider when visiting a country: "If it's difficult to get, why should they come?"

There are also some smaller markets in Asia from which Taiwan is hoping to draw more tourists. One is Singapore. After Japan, it shares with Hong Kong a good chunk of the Tourism Bureau's remaining promotion budget, being the source of the fourth most leisure travelers, and fifth most visitors overall, in 2001. Another potential market is South Korea. In 1992, the year Seoul broke off diplomatic relations with Taipei and both flag carriers cancelled direct flights, 147,200 Koreans visited Taiwan. Last year, that figure was just 82,600. Given that Koreans have much more disposable income now than in 1992, it seems logical that more visitors will come if flag-carrier flights can be re-established. The issue has been on the front burner lately as President Chen Shui-bian has taken a tough line with South Korea, asking it to stop kowtowing to China and to respect Taiwan's territorial integrity if it wishes to have air links. How the Koreans will react is anyone's guess.

The rest of the world is obviously not about to be ignored. Any idea, though, of doubling the number of Americans, the third largest source of visitors, seems rather far-fetched, especially when one considers that only about 18%, or 60,200, cite leisure as their reason for visiting Taiwan. In fact, almost twice as many Americans (111,400) claim they are visiting relatives. Of course, ever-optimistic travel agents here claim that overseas Taiwanese wanting to visit relatives is just the kind of niche market that should be further exploited. Even so, it's tough to know where they will suddenly be found in the kind of numbers the government expects.

Still, as is the case with Europeans and Australians, Americans are seen as part of a long-term strategy. The Tourism Bureau's Liu is quick to point out that the bureau has branch offices in San Francisco, New York, and Los Angeles. And if Americans can't take a trip solely to Taiwan, he says, they can always stop by on their way to other destinations. This is a sentiment shared by Stephen Wu, president of travel agency Zion International: "No one is coming all the way from America just to visit Taiwan." And besides, says Liu, there is more at stake than just money for Taiwan: "We still want to win friendship from the West."
While Taiwan is winning friendship with the West, however, it will have to exert itself to win hard currency from its neighbors. Even under ideal circumstances, it is going to have a tough time getting close to the goal of 2.6 million more annual visitors. As Stanley Yen, chairman of the Taiwan Visitors Association says, "It's an almost impossible mission." Given this, and the past performance of Taiwan's tourism industry, a better goal might just be to get as many tourists as possible and hang the targets. After all, realistically speaking, Taiwan is a lot more likely to see 2.6 million tourists come from China than anywhere else.

A Mainland Affair

Letting Chinese tourists into Taiwan would boost the economy, create thousands of jobs and, claim some, improve cross-strait relations. So why does getting them here seem to be such a long and arduous journey?

Taipei's Shida area, a haven of food stalls, cafes, and clothing stores, seems like an odd place to announce in English that "Taiwan is a renegade province." Yet, that's what happened one recent Saturday evening when a young man from the mainland decided to let foreigners know that the Republic of China isn't really, um, a republic. Fortunately for him, there were no staunchly patriotic Taiwanese around who cared. But it does highlight the risks inherent in opening Taiwan's doors to a flood of Chinese tourists. In the absence of even semi-official cross-strait negotiating mechanisms, it is hard enough for Taiwan to deal with the repatriation of mainlanders who sneak onto its shores; those who are supposedly welcome here could easily create an incident that Beijing might use to its political advantage.

But such fears might well be overblown; after all, Taiwan received more than 100,000 businessmen, sportsmen, cultural exchange envoys, academics, journalists, government officials, and relatives of Taiwanese from China last year -- and no worrying incidents were reported. Furthermore, negotiations on practical matters have been taking place at a private level. Taiwanese authorities seem increasingly comfortable with this, as long as those involved stick to matters of tourism and report on their meetings to the Tourism Bureau and Mainland Affairs Council (MAC). So far, it has been productive. As Fu Don-Cheng, director of the MAC's Department of Economic Affairs, says, "Private travel associations [from Taiwan] are able to communicate with government officials on the mainland very easily."

It appears they are being urged on by citizens on both sides of the Strait. In Taiwan, an MAC summary of surveys finds that 60-80% of respondents support easing up restrictions on Chinese tourists -- although 58% think there could be "a negative impact" on national security and 80% worry about Chinese overstaying their visas. Meanwhile, Chinese seem raring to visit what their national tourism bureau's website refers to as China's "Taiwan Island." Representatives of China's state-owned tourist agencies have visited here and surveys have found Taiwan to be high on, if not at the top of, the list of places Chinese want to see. The most common stat being thrown about in local media is that some 25 million people are eager to visit. Given that 1,000 per day is the most common number cited for Taiwan's capacity to process Chinese visitors, it would take almost 70 years to get all of them through CKS International Airport.

What exactly is Taiwan's appeal? For starters, its key tourist spots like Alishan and Sun Moon Lake are also famous in China: several well-known children's songs feature them. Moreover, thanks to the civil war, Taiwan has the vast majority of China's national art treasures and, due to the Cultural Revolution of the 1960s and 1970s, an environment more traditionally Chinese than China itself, especially in its vast array of temples.

The appeal of Chinese tourists to Taiwan is even more obvious. MAC Vice Chairman Lin Chong-Pin said last November at a press conference that the main purpose of letting them in is to improve cross-strait relations and the understanding of Taiwan in China. "Commercial interests come second, not first" were his words, but it's obvious that most Taiwanese looking at the Chinese tourism market have their eyes on the bottom line, especially when they see that 4.5 million Chinese visited Hong Kong last year alone.

The sheer number of potential Chinese tourists holds the promise for great economic gain, and their individual buying power is nothing to be sneezed at, either. According to the Hong Kong Tourism Board, the average Chinese visiting there spends US$191 (NT$6,600) per day, more than anyone else. In Taiwan, the amount they are expected to spend per day ranges from the NT$8,000 predicted by Johnson Tseng, head of the Taipei Association of Travel Agents, to the NT$6,000 estimated by C.T. Su, deputy director general of the Tourism Bureau. That would put them about even with Hong Kongers, and not far from the Japanese visiting Taiwan.

At the macroeconomic level, this is not small change. Based on 1,000 arrivals per day, staying on average 10-14 days, the annual payoff would be between NT$650 million and NT$1.2 billion. Various estimates claim this could result in the creation of more than 10,000 jobs.

Even better, Chinese tourists could play a huge role in filling out the midweek excess capacity at Taiwan's major attractions, accustomed as they are to traveling in large tour groups on tight itineraries. Taiwan's hotels, restaurants, and scenic spots could be kept full seven days a week.

Getting Taiwan's Toes Wet

If every journey starts with a single step, then in Taiwan's case the task of bringing in millions of mainland Chinese has begun with a few tour groups. They are known as "Category Three" tourists: Chinese citizens living, studying, or working in a third country. The numbers are small -- eight groups, six from Japan and two from the U.S., totaling 100 tourists -- but this is seen as just the beginning.

The fact that Chinese tourists are showing up at all, less than six months after consensus was reached on the issue by the Economic Development Advisory Council, could be seen as an achievement. There is, however, plenty of frustration over the pace of progress, the chief criticism being that the government is exerting too much control over the visitors' movements. Indeed, this is a case of "tour groups" in the most literal sense: visitors are not allowed to go off on their own; if they do, a tour operator risks having its license for servicing Chinese tourists suspended. There's not much chance for frivolity, either, as tour operators must report to authorities on the whereabouts and doings of the visitors each day -- at 11pm, to be exact.

The MAC's Fu rejects using the word "control" when talking about the current regulations, saying that the government is pursuing a policy of "understanding" through its tong bao (update) system. The purpose, he says, is not only to protect national security, but the tourists as well.

These first groups of Chinese are a "trial" to see if the system works and to see "how the mainland reacts" (so far, so good, says Fu). He says the government is now expanding Category Three to include Chinese visitors living in Hong Kong and Macau. It is also preparing to let in Category Two visitors -- Chinese residents visiting Taiwan via a third country -- so long as that does not violate China's laws.

Despite this gradual opening to Chinese tourists, a process supported by most opinion polls, some think matters are still moving too slowly. A group of KMT and PFP legislators recently drafted a bill to "liberalize" the regulations as soon as possible, saying that efforts to bring in Chinese tourists were dragging.

While the debate continues, it is important to bear in mind that the trend does not seem likely to be reversed. And so far, the potential economic benefits are obvious. Last year, of the 106,991 visitors who came in from China, more than a few managed to slip in trips to Sun Moon Lake and Alishan. A recent Central News Agency article, citing everyone from tourist association heads to hotel managers, credited these visitors with significantly boosting tourism at these spots. One Alishan souvenir shop owner was quoted as saying: "Some mainland visitors do not hesitate to buy NT$30,000 worth of jewelry or high-quality Taiwan tea with a price tag of NT$20,000 per kilogram."

True, in some cases this money may have been easy-to-spend government funds. But along with the official "experiment" with Chinese tourists, it is nevertheless enough to make budding tourism entrepreneurs rave about their future prospects. It might even be enough to convince die-hard Taiwan independence supporters to ignore wisecracking Chinese tourists droning on about renegade provinces.

Packaging Tours

Getting Taiwan known as a tourist destination will take more than a big promotion budget. Finding out what visitors like is crucial.

Tell friends that you are going on vacation to Taiwan and you may get warnings that the traffic is pretty crazy in Bangkok. In fact, when it comes to promoting itself as a tourist destination, it's less that Taiwan has an image problem than it has no image at all.

Of course, as has been noted, this is not a problem in China, where demand is so strong the government just needs to open the door and visitors will flock in. Japan is also easier ground to recruit on than anywhere else, due to historical and cultural links. Yet even there, it takes money, and it will take a lot more if Taiwan wants to boost its intake of Japanese visitors.

The government is aware of its shortfall. "We definitely need more money for promotion into the Japanese market," says Minister Lin Sheng-Fong. The Tourism Bureau, meanwhile, is already throwing in its two cents' worth: last year, half of the bureau's NT$200 million budget for international promotion went to Japan, paying for everything from newspaper ads to television spots.

By international standards, however, this sum is small. Compare it to the Singapore Tourism Board's budget for 2001: US$39 million, for a tiny nation of 4.3 million people. Taiwan's international promotion budget for 2001 was one-sixth of that at about US$6 million. Admittedly, this is about to get a significant boost: C.T. Su, deputy director general of the Tourism Bureau, says that under the six-year tourism plan, the bureau expects to receive up to NT$1 billion per year for promotion.

Again, it's all still for Asian markets: nothing was spent last year for promotion in North America and Europe, where images of Taiwan as a tourist destination are less likely to be of Taroko Gorge than of fistfights in the Legislative Yuan. While the Tourism Bureau does have offices in San Francisco, Los Angeles, and New York, their work would be a whole lot easier with ample promotion funds.

It's not just about money, however. Taiwan's tourism authorities clearly lack experience and knowledge of how to conduct marketing among Western, English-speaking tourists. By comparison, just take a look at the Singapore Tourism Board's website, a savvy and slick wealth of information, including everything from a list of city tours to answers to questions such as, "Will I be able to bring chewing gum into Singapore" (Answer: No, not even for personal use). Then, click onto the Taiwan Tourism Bureau's site. It's like playing a game of Pacman after a few hours of Tomb Raider.

This is just the leisure side of the industry, and it should be said that not everything in tourism is about attracting foreigners to pleasure spots. In fact, Taiwan has nearly as many business as leisure visitors, and will need to draw a lot more if it is to reach the goal of doubling arrivals. As Earl Wieman, an editor at the Tourism Bureau who has been involved in Taiwan's tourism industry for decades, points out, Taipei's excellent public transportation system and the wide range of scenic spots in and about the city are both factors that could help in promoting Taiwan as a site for conventions. But it is going to require a much stronger promotional effort, Wieman says, including beefing up the Taiwan Convention Association and putting more of the Tourism Bureau's human resources into this area.

The government's six-year plan calls for an increased focus on MICE -- Meetings, Incentives, Conventions, and Exhibitions. But Minister Lin admits that the benefits of MICE have not yet been "fully investigated," with one option being to "bring in professional organizers and ask them to hunt for large incentive events." This is easier said than done, and Taipei has far to go before it can become a regional center for conventions. Simply put, you can't just get events because you decide you want them.

The Survey Says?

Such thinking, however, seems to be exactly what is gripping Taiwan's tourism industry at present. In sum, it is permeated by a strong "build it and they will come" attitude. What is lacking in a lot of the country's promotional efforts, and overall strategy, says Chen Sz-Reng, associate professor of Shih Hsin University's Tourism Department, is the gathering of background information needed to do proper planning. "We are lacking in the entire market research area," he says.

This is hardly surprising, given that until now tourism has not been considered an important sector by the government, and it has therefore lacked funding. "We don't have a sufficient budget to do a detailed marketing study, so there is no guiding marketing plan," says Chen.

Things are beginning to change. A large-scale tourism marketing study was launched last year, he says, although Taiwan still lags far behind Japan, Korea, and Hong Kong in the field. It's not so much that Taiwan has not surveyed visitors before, it's just that the focus traditionally has been on where they are coming from, how long they are staying, their profession, and so on. Surveys are now designed to find out what tourists think about their visit to Taiwan, asking them to rank on a five-point scale their impression of such things as transportation, sanitation, and services. "We need to get the tourists' views on Taiwan, otherwise we will only know their behavior, and not their evaluations, " says Chen.

Early results are encouraging. Based on 1,500 responses in the first three months of the year, about 81% of visitors said they were satisfied with their trips, with high satisfaction rates (over 80%) in areas such as visa processing, the availability of tourist information, and the security of lodgings. The biggest complaint: more than 26% expressed dissatisfaction with the shortage of foreign-language skills in Taiwan.

While still in its infancy, the marketing plan should ultimately prove invaluable for developing Taiwan's tourism industry. It will help to identify those areas that Taiwan should promote -- such as its low crime rate or the friendliness of its people -- while at the same time letting industry players know what needs to improve. The first lesson seems to be that more promotion is needed: only 41% of respondents said they had read or seen a publication about Taiwan's tourist attractions before coming.

This said, it would be unfair not to mention that the Tourism Bureau has had its marketing successes. This is especially true on the home front, including the promotion of festivals across the country. Stephen Wu, president of travel agency Zion International, says there "has been a lot of emphasis on the domestic industry, which has been quite successful in the last four to five years." Now, the shift needs to be made toward international travelers.

One effort to attract such people has been the bureau's "Touch Your Heart" campaign, launched last year, which provided visitors with discounts from airlines and major hotels. Walter Chen, of South East Travel Service, says 80% of his Japanese customers' travel costs are in flight and hotel expenses, and the bureau's program has helped bring in the visitors.

Chen also emphasized that the relationship between travel agents and the Tourism Bureau has improved in the past few years, with the government now being more open-minded toward ideas presented by the agents. This is significant because until Taiwan has its tourism marketing machine firing on all cylinders, travel agents are a firsthand source of information on how tourists feel about the place. Taiwan's attractions matter little if there is no demand for them or, even worse, they are not promoted.

"We know there are things we can tell the world [about Taiwan]," says Minister Lin. "Geologically it's a young island with steep mountains, a rich ecology, people full of vitality, and all kinds of foods and festivals." Now, all Taiwan needs is the money and marketing research to get the word out.

Getting From A to B

Taiwan has no shortage of things to see and do, but it sorely lacks the infrastructure for people to enjoy them.

There's nothing like sitting out on the porch with a cup of coffee and watching the sun set over a white picket fence. Sound like suburban America? Welcome to the Chao Feng Farm Resort, a sprawling complex built on a riverbed along Taiwan's east coast.

Taiwan has no shortage of massive leisure industry projects under construction. Just to the north of the resort is Hualien Ocean Park, scheduled to open this summer with a massive aquarium, dolphin lagoon, sea lion show, and 350-plus room hotel -- not to mention great access to Taroko Gorge. The west coast is getting into the action, too. Tapeng Bay's resort, about a 30-minute drive from Kaohsiung, is a build-operate-own project that, when finished, will cover hundreds of acres and include a marina and 18-hole golf course. It's only a matter of time before serious talk of a Taiwan Disneyland surfaces.

With fewer than 23 million people, it's worth wondering how Taiwan will be able to keep all of these attractions in business. This is especially true given there are so many attractions of the natural kind to visit, from mountains and forests to gorges and islands, along with all the museums and temples. Naturally, foreign visitors are expected to help out, especially on weekdays when Taiwanese are back in the office.

Will it happen? No doubt it would be a great boon for Taiwan since, as Chen Sz-Reng, associate professor in Shih Hsin University's Tourism Department, points out, "Tourism is a sustainable, money-making business." But while noting that the government's support of build-operate-transfer and build-operate-own projects is stimulating private investment, he says this is not enough. Success in tourism, he says, will also require giving more incentives to business, conducting proper promotions, and getting the national and local governments to cooperate. What is needed, says Chen, is an "upscale, overall development plan."
The government believes it has one. Taiwan's tourism assets are scattered about the country and often held hostage by the pull of local politics, says Minister without Portfolio Lin Sheng-Fong. He stresses the "importance of itineraries" in pulling it all together. It's a two-step dance. First, the government will take those proven itineraries and fix any problems associated with them. "Even if it's a sloppy toilet, we've got to solve that problem," says Lin. Second, it will search Taiwan far and wide for new, potentially lucrative itineraries. For those that pass muster, it will "launch a campaign to mobilize local governments, hotels, and so on, to upgrade things across the board."

It sounds like a realistic plan, aiming first to make do with what Taiwan has, and then to look at what it could have. And it comes packed full of details on everything from build-operate-own projects to toilets that need cleaning. But that doesn't change the fact that to put this plan into action, a monumental effort is going to be required across the country.

Room at the Inn?

Take hotels for a start. Taiwan at present has an average occupancy rate of about 65%, but it can range from 0% on weekdays to 100% on weekends, depending on where you visit. Tourist spots like Alishan and Sun Moon Lake seem destined for problems should hordes of mainlanders show up, as each place has fewer than 1,000 rooms available. Either more hotels must be built or the tourists will be stuck in nearby towns and cities -- which will have to build more hotels. Even now, Bruce Liu, deputy director of the Tourism Bureau's International Division, says that Taiwan has a seasonal problem. "Hotel capacity should be enhanced in high season," he says.

It's not just about capacity; having the right kinds of hotels is also a problem. In Taiwan, the visible choices by and large are five-star accommodations or a shabby room in a building that looks like it passed its last building code inspection during the Qing Dynasty.

Creating mid-range tourist hotels -- the kind that forgo bowls of fruit on the night stand for cheaper prices -- was part of the government's "New Development Strategy for Taiwan's Tourism in the 21st Century." It held that small- and medium-sized hotels would receive financing and guidance "to encourage renovation and remodeling." But whatever has been done, it's not been enough, says Stanley Yen, chairman of the Taiwan Visitors Association. He says people have to get beyond the idea that three-star hotels are smaller and older: "There's no reason you can't build a 1000-room, three-star hotel."

Indeed, affordable room rates are dearly needed. Taiwan is already at the high end on the cost of living scale in Asia and even the Japanese are feeling the price pressure. Walter Chen, director of inbound travel at South East Travel Service, an agency specializing in Japanese tourists, says, "I'm not sure how much more my clients can tolerate."

After settling into a room, the next priority is getting around. Flying from Taipei to outer islands like Penghu or Kinmen is sheer joy, at less than an hour, compared to some trips around Taiwan. A journey from Taipei to Sun Moon Lake via Taichung can take up to six hours in heavy traffic.

C.T. Su, the Tourism Bureau's deputy director general, admits that traffic jams rank among tourists' biggest complaints. It's hard to see how such problems can be relieved, though, save for cutting new roads through the mountains or eliminating cars from the capital. The daily tourist train to Hualien has helped. So, too, will the high-speed railway (due for completion in 2005) and the expansion of Taipei's MRT system. What can be improved right now, however, is the quality of transportation. As Minister Lin says, "The problem is not to shorten the time to Sun Moon Lake, but to make it more comfortable and convenient."

This is gaining importance as Taiwan is now seeing more FITs -- foreign individual travelers. Take the Sun Moon Lake example again. For someone on a tour, it involves sitting on a bus for a few hours watching betel nut stands and rundown buildings go by while the tour guide regales with stories of Taiwan's past. For the FIT, it's a matter of getting to Taichung, then finding a bus to Puli (if there is one), then finding a bus to Sun Moon Lake (if there is one). "A lot of problems are raised by transportation," says Professor Chen, citing connections from airports to tourist spots as among the biggest.

But getting to your destination is only half the struggle. One of Taiwan's biggest challenges is raising the service standards at its tourist spots. "For the international hotels, it's okay, but for theme parks and scenic areas, we are really lacking recreational professionals," he says.

This means that training is crucial, something that Chen says management and business owners need to recognize and rectify. How? By putting more money into training and "using a more rigorous standard to monitor and evaluate their employees."
Chen is walking his talk. The students in his department traditionally received 400 hours of practical training, but this "only gave them a taste." It has now been bumped up to 1,200 hours at the convention hotel run by the university. This complements the theory and case studies covered in class, which, says Chen, helps to develop the students into project leaders.

Thus, it's not just a matter of putting out more workers, but putting them out with greater skills. Take guides for Japanese tour groups: South East Travel's Chen says that about 2,800 people are licensed for the job in Taiwan, but only 600 of them are still in the business, leaving the industry about 900 guides short. Moreover, the current guides need to upgrade not only their language skills but also their knowledge of Japanese mannerisms.

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Hardly surprising, then, that poor foreign-language skills are the number one complaint by tourists. Whether it's the Romanization system for road signs (is that Chungshan or Zhong Shan Road?) or trying to ask a local in English where the bathroom is, it can be frustrating for foreigners to wander about in Taiwan without a tour guide's help.

This is not to say that all of these shortcomings should discourage Taiwan in pursuing its tourism ambitions. But it should highlight the extent of the challenges inherent in such a bold plan. To get the kind of payoff that Taiwan is looking for -- twice as many visitors, more jobs, and a boost in the economy -- it will have to make substantial investments in its future. Otherwise, there won't likely be as many people watching the sunset from those porches at the farm resort.

Plan Globally, Fail Locally?

The central government has a detailed six-year plan for steering Taiwan's tourism industry towards greater prominence, but can it get local leaders to come on board?

Extending into the ocean like an enormous thumb, Chipei Island's spit is a model for Taiwan's beaches, with its golden sands and a serpentine shore skirted by marbled blue waters. This spit, part of the Penghu archipelago controlled by Taiwan, has more than natural beauty. It also offers all the modern diversions, including parasailing, jetskiing, and motorboat racing -- and near-death experiences courtesy of the all-terrain vehicles tearing up and down the beach.

Beach managers everywhere have to deal with the competing interests of those who want to paddle about or lie comatose in the sun and those seeking some high-speed, motorized fun. But when it comes to a few joy riders spewing gasoline fumes from their noisy ATVs versus the many beachgoers simply trying to stroll across the sand, it's obviously a cause for concern. The situation on Chipei Island illustrates how the government, while trying to attract tourists from around the world, is going to have a lot of headaches dealing with the authorities here at home.

What makes it worse is that Chipei is not a case of an ATV rental company legitimately providing a service to tourists. At least not according to Hung Tung-Lin, deputy director of Penghu County Government's Tourism Department, who says that ATVs are not licensed for use on the sand spit. Complaints about the vehicles have been made to his department, says Hung, adding that the ATVs damage the beach. Yet nothing has changed for at least a year, as this writer can personally testify.

At the core of the problem seems to be not just competing interests on the beach, but in the corridors of power, too. Chipei is a prime case of the dislocation between the law, set by authorities nationwide, and its enforcement, which often clashes with local interests. But Chipei is just a small example. Prospective private investors in large-scale projects like theme parks must face a wide range of bureaucrats dealing with everything from transportation to water supplies to land issues, and often at both the national and local level.

For its part, the central government, with its recently announced six-year plan to develop tourism, is focused on the big picture: easing Taiwan's unemployment rate, boosting GDP, finding replacements for the waning manufacturing sector. Minister Lin Sheng-fong, who is leading the government's efforts, says the aim of the six-year plan is to structure tourism along the foundations of proven and potentially lucrative itineraries, rather than having development sprout up all over the place. "The locals want whatever they think is good to be supported by the government," says Lin, but he is emphatic that professionals must be brought in to determine the ideal routes for development.

Local governments, like their national counterpart, are also obviously looking to reap the economic benefits of tourism. It's just that their sphere of concern is much smaller. Not only that, but they face the stark political reality that their constituents, perhaps even an ATV renter or two, are literally living next door. "Tourism and the leisure industry is quite localized here [in Taiwan]. It's connected to local politics and economic distribution, and involves local interest groups," says Chen Sz-Reng, associate professor of Shih Hsin University's Tourism Department. This is obviously the case nationwide, since what is happening in Penghu has clear parallels elsewhere, from the illegal use of jetskis in Kenting to sewage being pumped directly into Sun Moon Lake.

So, what to do about those ATVs? Hung says the Penghu County Government is creating regulations to keep the vehicles limited to certain areas on Chipei island, but that cracking down on violators on the sand spit is ultimately "up to the central tourism bureau."

Bruce Liu, deputy director of the Tourism Bureau's International Division, agrees -- both that regulations will soon be established and that the sandspit falls under the Tourism Bureau's jurisdiction (the Penghu Scenic Area Administration, to be exact). Unfortunately, given the bureau's limited resources, enforcement depends on local assistance. "The national government has power in theory, the local government has it in practice," he admits. He is not alone. In fact, no less an authority than Minister Lin sounds uncannily like a typical exasperated head of a multinational company in Taiwan when he says that the laws are there, "but we need someone to enforce them."

A Rock and a Hard Place

This puts the central government in a sensitive spot. It finds itself pushing for the development of a tourism industry that meets international standards, confronted by local interests that are able to undermine its authority. As Professor Chen sees it, "The central government has a very good policy and development direction, but the local government is providing all of the natural resources." To modify a well-known phrase among lawyers, possession of tourist resources is nine-tenths of the law.

Obviously, getting the central and local governments to work in tandem is a daunting task, and it's an issue most officials interviewed for this survey would rather not touch. Discussing how to draw in Japanese visitors or where hotels are needed makes for much more comfortable conversation than trying to figure out how to solve the problem of local politics undermining Taiwan's grand tourism plan.

Nevertheless, it is an issue that must eventually be faced. And there are evident solutions, the first of which is to start building better rapport between central and local tourism authorities. Minister Lin admits that the central government has long neglected local authorities, but adds that the current Cabinet is in an excellent position to rectify this. The reason: it includes many former city mayors who make "constant references to the need to empower local governments."

Improved incentives could also help. Approval of tourism-related projects could be tied to guarantees on, for example, the enforcement of the Tourism Bureau's regulations. No doubt many local officials would like their constituencies to get the cash and infrastructure that comes with such projects. In fact, Lin says, "I know several mayors who say, ÔMake this plan available to us'." Perhaps a carrot-and-stick approach is the central government's best bet; that is, if the deal can be made with the right people. Says Lin: "We need to find smart, conscientious locals to be the leaders."

Does this mean that a ban on ATVs in Chipei in exchange for a casino in Penghu is in the works? At the least, something needs to be done to bridge the gap between Taiwan's two levels of government. Otherwise, despite all the efforts to boost tourism promotional budgets and build more hotel rooms, tourists are going to leave the island with a bad taste in their mouth. Especially if it's the lingering flavor of gasoline fumes.

Not In My Tribe

The need for balance between respect for aboriginal traditions and the benefits of tourism holds lessons for Taiwan's travel plans as a whole.

In Taiwan's south-central mountain range, up a narrow and crumbling road edged by cliffs hundreds of meters high, lie the centuries-old ruins of a Lukai tribal village. A prototype house replete with thick walls of piled slate has been built nearby, giving visitors a sense of how the ancestors of this tribe, one of 9 major ones in Taiwan, lived in this isolated and idyllic spot. Stepping inside is a refreshing treat on a hot summer day as the temperature drops 15 degrees and calming shadows replace blazing sunshine. The quick shift from hot to cool, from the present to what seems like the past, also serves to remind how vulnerable aboriginal culture -- or any culture for that matter -- can be when faced with outside forces such as masses of tourists.

This is not to say that aboriginals are passive bystanders when it comes to tourism. Years ago Orchid Island's government issued two pairs of Bermuda shorts -- and one belt -- to each of the Tao (Yami) tribesmen living there, because their traditional loincloths were deemed too revealing for domestic tourists. The response: The Tao resisted, arguing that the shorts were a hindrance while hunting. (In any case, with only one belt, they would have been able to keep their pants up only half the time.)
While the story is dated, the Tao's point remains relevant: putting on Bermuda shorts could be the first step down a slippery slope toward the loss of cultural identity. The incident could also be seen as an expos? of the challenges presented to Taiwan as a whole by the six-year plan: the gaps between its leaders' ambitions and its people's capabilities, the inevitable misunderstandings between the government and locals, and so on.

Now consider a more recent case. Last year, a group of mostly foreign journalists went on a Tourism Bureau-sponsored trip to an Ami tribe harvest festival. The afternoon began auspiciously enough at a village where Ami were dancing on an outdoor basketball court. Soon the journalists were invited to join in and a few hours later everyone sat down to a traditional meal. It was a truly warm and fuzzy tourism experience.

Unfortunately, it all came undone later that night at a second village deeper in the mountains, a place that no regular tourist trying to "do Taiwan" on their own would have been able to find. On the bus, the guide, an Ami herself, had told the journalists that large tour groups were a threat to traditional ways. They soon saw what she meant. At the village, only the men were dancing, as is tradition during the festival's first few days. A few photographers soon got in the dancers' way, despite having been warned to keep a distance, but what really shifted the mood was that some women went against tradition and joined the dance. The contrast between the men in traditional clothing and the women, many in jeans and t-shirts, was stark. The tour guide nearly burst into tears, saying that this was exactly what she feared would happen.

Instead of seeing how tourism could help aboriginals, many of the journalists left believing that the Tourism Bureau, the village elders, or both had forced the women to dance for the media's benefit. An Associated Press article insinuated as much: "It was never clear if the women acted spontaneously or if they were following instructions to please tourists. The incident cast a shadow over the event and highlighted the dilemma the aborigines faced." The story played around the world under some fully loaded headlines, including this one from the South China Morning Post: "Tourism threatens Ami tribe's soul."

C.T. Su, the Tourism Bureau's deputy director general, is adamant that neither he nor the elders pressured the women. In fact, he says, the elders were upset that the women had danced, too, and attributed it to a generation gap: "The head of that village complained to me. He said the old traditions are not being seriously respected."

But the bigger point is how easily things can go awry when a single group of visitors and a single village are involved. That village could easily be seen as a microcosm of Taiwan: a relatively isolated and little-known place with a unique culture and a close-knit population that prides itself on being friendly. Given Minister Lin Sheng-fong's comment that "tourists can be extremely sensitive," what will happen when millions of foreigners, including plenty of Chinese, come flooding into Taiwan?

This, of course, is the tourism dilemma. Held out alongside these threats to culture are the massive benefits that could accrue from tourism, most notably jobs and revenue. Maximizing the benefits while minimizing the risks will require not only bringing Taiwan's infrastructure and service sector up to international standards, but bringing Taiwanese together -- especially the national and local governments -- as a team to push not just quantity, but quality.

Or, there is an easier way out. That is to go for the flash and sparkle. Returning to our village experience, a cynic might say that this is precisely what has happened to the aboriginals. One need only look at the Formosan Aboriginal Culture Village outside Taichung -- a combination of native culture and more popular roller coasters and other amusement park rides -- to see what could be in store for Taiwan. It may be tacky, but it pays, drawing more than 700,000 visitors per year.

There, in a nutshell, lies the choice: the high road and the low road of tourism development. Which will Taiwan take? Tune in around 2008 to find out.

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