Voluntary Report - Public distribution

**Date:** 12/21/2007

**GAIN Report Number:** TW7054

TW7054

**Taiwan**

**HRI Food Service Sector**

**Tourism Development Brings Opportunities to Food Service**

**2007**

**Approved by:**

![](media/image1.wmf)Keith Schneller

American Institute in Taiwan

**Prepared by:**

Cleo Fu

Reporting and Marketing Specialist

**Report Highlights:**

To better utilize Taiwan's natural resources, starting in 2002, the
Taiwan government launched a "Double Tourist Arrivals Plan" to boost one
of its most competitive tertiary industries: tourism. The goal is to
reach 5 million foreign visitors each year by 2008. In 2006, the 3.5
million foreign visitors brought US\$5.1 billion foreign exchange, 20%
of which is meal-related expenditures. Using the same percentage
assumption, the 5 million+ tourists will contribute at least \$1.45
billion to the foodservice sector. Although Taiwan's economy is doing
quite well, small businesses including the HRI sector have been
suffering and are supportive of Taiwan gourmet initiatives to increase
foreign tourism including increased visits by mainland Chinese tourists
in the future.

Includes PSD Changes: No

Includes Trade Matrix: No

Annual Report

Taipei ATO \[TW2\]

\[TW\]

######### **1. Overview**

Together with the high-tech industry, tourism is regarded as one of the
star industries by the Taiwanese government to create jobs and earn
foreign exchange. The government has been spending billions of its
budgets on the improvement of transportation between major cities and
famous tourist spots and other programs to maximize convenience for
travelers, making travel within the island easier for both domestic and
foreigner tourists.

The development of tourism is the key to prosperity for the Taiwan food
service sector in the future. However, the decline in population has
offset and slowed the growth of foodservice sector in the past few
years. According to the Executive Yuan's research, fertility rates have
been declining tremendously since 1998, lower than many developed
countries (Table 1). With this trend, Taiwan will reach a zero
population growth in 2015 (Table 2). Also, more and more Taiwanese have
been moving to Mainland China for work. In 2006, 4.4 million Taiwanese
(person-time) traveled to China and around 1 million people stayed
longer than six months (long-term stays for work or moves with
families).

Many joint venture companies have also started moving their Taiwan
headquarters to Mainland China which has also had a negative impact in
the Taiwan HRI sector. This trend could be revised in the future if
Taiwan government makes it easier for travel across the straits. If this
happens, more and more international companies may prefer to locate
their expatriate executives in Taiwan where conditions are more suitable
for families.

Table 1: Total Fertility Rate of Taiwan, US and France

  -------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
           1996   1997   1998   1999   2000   2001   2002   2003   2004   2005

  Taiwan   1.76   1.77   1.47   1.56   1.68   1.40   1.34   1.24   1.18   1.12

  U.S.     2.04   2.04   2.06   2.05   2.06   2.03   2.01   2.04   2.05   ...

  France   1.75   1.74   1.78   1.81   1.89   1.90   1.88   1.89   1.92   1.94
  -------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------

Source: Department of Statistics, Ministry of Interior

Table 2: Taiwan Population Growth Estimation

  ------------ -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- --------
  Year         2006     2007     2008     2009     2010     2011     2012     2013     2014     2015     2016     2017     2018     2019

  Population   22,770   22,831   22,885   22,931   22,969   22,999   23,019   23,030   23,033   23,027   23,014   22,992   22,962   22,925
  (,000)                                                                                                                            

  Growth Rate  3.02     2.70     2.36     2.03     1.67     1.28     0.87     0.49     0.12     -0.25    -0.60    -0.95    -1.29    -1.64
  (%)                                                                                                                               
  ------------ -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- --------

Source: Council for Economic Planning and Development, Executive
Yuan（estimation）

Table 3: Number of Taiwan Tourists to Mainland China

Source: China Monthly Statistics and China Travel Yearbook, PRC

The Government's tourism policy is the savior of the foodservice sector
as countered by the population decline. As part of Taiwan government's
National Development Plan, the Ministry of Transportation and
Communication launched the "Double Tourist Arrivals Plan" in 2002. The
goal is to double the number of international tourist arrivals which
will deliver evident benefits in creating jobs and earning foreign
exchange.

The plan sets the following targets for growth in the number of
international visitors to Taiwan by 2008:

1\. The annual number of visitors coming to Taiwan for the purpose of
tourism is to be raised to at least two million from the 2005 level of
around one million (added in the 2005 plan).

2\. Through efforts to effectively remove bottlenecks and tap into
potential visitor source markets, the annual number of Taiwan's visitor
arrivals is to grow to 5 million by 2008.

The government proposed a total of NT\$59.33 billion as the budget
(Table 4) to implement its tourism policies. The plan includes:

-   Promoting local cultural events as part of tourism attractions.

-   Continuing to promote 12 major tour routes.

-   Improving the environment for private investment and actively
    encouraging private investment in tourism development projects.

-   Opening visitor centers/tourism information centers at highway rest
    stops and High Speed Railway stations.

-   Encourage home stay (B&B) inns to be legally registered.

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-   Drafting preparatory measures for large potential increases in
    tourists from mainland China.

  ---------------- ------------- --------- ------------- ------- ------- --------- ------- ------- ----------
  Table 4:                                                               Unit:                     
  \"Double Tourist                                                       NT\$ 100                  
  Arrivals Plan\"                                                        million                   
  Project Costs                                                                                    

                                                                                                    

  Plan Item        Source of               Yearly                                                  200-2007
                   Expenditure             Expenditure                                             Subtotal

                                           2002          2003    2004    2005      2006    2007    

  Double Tourist   Government    Central   1.05          66.10   73.62   82.49     90.45   75.65   389.36
  Arrivals Plan                                                                                    

                                 Local     0.00          3.61    4.71    3.15      1.95    1.05    14.47

                   Fund                    0.00          2.68    2.64    2.85      4.46    4.40    17.03

                   Private                 0.00          0.00    0.30    3.90      0.00    0.00    4.20
                   Investment                                                                      

                   Others                  0.00          0.64    3.08    15.75     55.25   96.50   171.22
                   (Special                                                                        
                   Projects                                                                        
                   Funding)                                                                        

  Source: Tourism                                                                                  
  Bureau, Ministry                                                                                 
  of                                                                                               
  Transportation                                                                                   
  and                                                                                              
  Communication                                                                                    
  ---------------- ------------- --------- ------------- ------- ------- --------- ------- ------- ----------

**2. The Post-2001 Market**

With the slogan of "Taiwan, Touch Your Heart", Taiwan has successfully
promoted itself to the international tourism market. Different types of
advertisements were programmed to introduce Taiwan to its closest
neighbors-East Asian countries. 65% of tourism visitors indicated they
have seen the advertisements before they came to Taiwan. China, North
America and European countries will be Taiwan's next goal to open its
tourism market.![](media/image2.png){width="4.238888888888889in"
height="2.0097222222222224in"}

After the tourism market recovered from SARS in 2003, the total foreign
visitor numbers has increased to 3.5 million in 2006, a 18% growth from
2002 (Table 5), adding \$552 million foreign exchange.

According to the Tourism Bureau's survey in 2006, foreign visitors who
came for tourism purposes spent \$51 (person/day) more than visitors
that came for business. Moreover, 54% of foreign tourists indicated that
the biggest attraction to them is the gourmet in Taiwan. According to
the survey, 7% of the tourists' Expenditures is dining within the hotel,
while 13% is dining outside of the hotel. Consequently, food related
festivals, such as the Taipei International Newrow Mian (Beef Noodles)
Festival and Miaoli Hakka Gourmet Festival, were created to attract more
tourists. Many expats living in Taipei will quickly associate newrom-

mian as Taiwan's national dish!

Table 5: Foreign Visitor Numbers and Expenditures 1998-2006

  ------- ----------- -------------- -------- ---------- ---------- ----------
  Year    No. of      Visitor        Growth   Spending   Spending   Average
          Visitors    Expenditures   Rate (%) Per Person Per Person Length of
                      (US\$ 1                 (US\$)     Per Day    Stay
                      million)                           (US\$)     (Nights)

  1998    2,298,706   3,372          -0.88    1,466.83   190.25     7.71

  1999    2,411,248   3,571          5.9      1,481.05   191.35     7.74

  2000    2,624,037   3,738          4.68     1,424.65   192.52     7.4

  2001    2,831,035   4,335          15.97    1,531.26   207.77     7.37

  2002    2,977,692   4,584          5.74     1,539.29   204.15     7.54

  2003    2,248,117   2,976          -35.08   1,323.66   166.08     7.97

  2004    2,950,342   4,053          36.19    1,373.76   180.52     7.61

  2005    3,378,118   4,977          22.8     1,473.25   207.5      7.1

  2006    3,519,827   5,136          3.19     1,459.22   210.87     6.92
  ------- ----------- -------------- -------- ---------- ---------- ----------

Source: Tourism Bureau, M.O.T.C

**3. Infrastructure-Private Investment**

The capacity of hotel rooms is also a key for tourism development. Other
than government's plan to upgrade the quality of ordinary hotels and
encourage the private sector to build budget hotels using the
build-operate-transfer (BOT) model of developments, there are 51 private
international-tourist hotels currently under construction. A total of
13,092 rooms will be added to meet the demand created by the doubling of
tourist arrivals (Table 6).

Table 6: International-tourist Hotels Under-constructed

  -------------------------- ----------------- -------- ------------ ----------
  Hotel Names                Location          No. of   Estimated    Invested
                                               Rooms    Open Date    Amount
                                                                     (NT\$ 1
                                                                     million)

  Regal Hotel Kenting        Heng-chun,        242      6/30/2007    990
                             Pin-tung County                         

  South Gardens Resort       Chung Li, Taiyuan 102      8/31/2007    1,053

  Hon Lin Hotel              Taichung City     98       9/30/2007    600

  Chinatrust Landmark Hotel  Nantou County     211      10/30/2007   1,300

  Zi-huei Resort             Chi-Shang,        402      12/30/2007   1,200
                             Taitung County                          

  Yung-Lian Hotel            Hsinchu City      276      12/31/2007   2,300

  Alishan House              A Li San, Chia Yi 110      12/31/2007   500
                             County                                  

  Janfusun Prince Hotel      Yun Lin County    292      12/31/2007   120

  Fullon Hotel Linkou        Que San, Taoyuan  150      1/1/2008     582

  Fullon Hotel/Taipei        Da-an District,   120      1/30/2008    410
                             Taipei City                             

  Tachien Hotel              Chien-Kuo/Chang   123      6/30/2008    200
                             Chun Road, Taipei                       
                             City                                    

  Tapei Resort Hotel（A）    Shi-men, Taipei   480      6/30/2008    2,200
                             County                                  

  Tapei Resort Hotel（B）    Shi-men, Taipei   708      6/30/2008    3,900
                             County                                  

  Skylark Hotel              Da-shu Kaohsiung  712      6/30/2008    2,476
                             County                                  

  LM Hot Spring Resort       200,Luye          192      6/30/2008    1,278
                             Shiang,Taitung                          
                             Count                                   

  Grand Green Island Resort  Green Island      809      6/30/2008    4,990
                             Township, Taitung                       
                             County                                  

  Sheraton Yiland Resort     Yi-lan County     218      7/1/2008     1,800

  Spring Park Jiaoshi Villa  Jiaoshi Shiang,   84       7/2/2008     1,120
  Resort                     Yi-lan County                           

  Taipei ChingCheng Howard   Sung-san          180      7/30/2008    300
  Hotel                      District, Taipei                        

  Fong Hwa Hotel             Yi-lan County     188      7/30/2008    180

  Ｍonarch-Skyline Hotel     Luju Shiang,      250      8/8/2008     1,400
                             Taoyuan County                          

  Shangri-La\'s Far Eastern  Tainan City       336      8/22/2008    1,885
  Plaza Hotel, Tainan                                                
  -------------------------- ----------------- -------- ------------ ----------

  -------------------------- ----------------- -------- ------------ --------
  Ding Ding Hotel            Ling-ya District, 308      9/30/2008    4,400
                             Kaohsiung City                          

  Blessing Inn               Tainan City       229      9/30/2008    980

  President International    Lot 3, subsec 4,  361      10/1/2008    3,096
  Hotel                      Shinyi District,                        
                             Taipei City                             

  Manorgroup Hotel           Hsin Dien, Taipei 120      11/30/2008   2,450

  PenGhu Beach Resort Hotel  Penghu County     32       12/20/2008   116

  Naruwan Beach Hotel        Bei-nan, Taitung  272      12/30/2008   2,400

  Promised Land Resort Hotel Hua-lien County   227      12/30/2008   1,338

  Hua Lien Hotel             Hua-lien County   260      12/31/2008   1,090

  Penghu Bay Resort          Penghu County     269      4/30/2009    1,800

  Novotel Taoyuan Inte\      Dayuan Shiang,    362      6/30/2009    1,154
  -rnational Airport Taipei  Taoyuan County                          

  Ataabu Landis Hotel        Taichung County   110      6/30/2009    600

  Wen Wan Hotel & Resorts    Nantou County     92       10/10/2009   2,000

  Shangri-La Resort          Yi-lan County     146      10/31/2009   1,316

  Chinatrust Landmark Hotel  Taipei            316      12/1/2009    1,650

  Park Hyatt Taichung        Taichung City     250      12/1/2009    3,830

  Yihwa International Hotel  King-Tai Road,    580      12/12/2009   8,585
                             Taipei                                  

  Grand Hyatt Kaoshsiung     Chien-Gin         415      12/30/2009   3,290
                             District                                
                             Kaohsiung                               

  Hoya Hot Springs Resrt and Bei-nan, Taitung  112      12/30/2009   1,400
  Spa                                                                

  Le Meridien Taipei Hotel   Hsin Yi Road,     220      12/31/2009   705
                             Section 4, Taipei                       

  Kakaya Beitou              BeitouDistrict,   99       12/31/2009   359
                             Taipei City.                            

  The Great Roots            San-xia, Taipei   102      12/31/2009   842
  International Hotel        County                                  

  Hotel Lord Grace Hsinchu   Chu Bei, Hsinchu  314      12/31/2009   2,380
                             County                                  

  Glory Hotel                Chung Li, Taiyuan 602      12/31/2009   2,382

  Famous Nobility CH         Chunan, Miaoli    107      12/31/2009   500
  Inatrust Hotel                                                     

  Palmlakes Resort Hotel     Fanlu Shing,      45       12/31/2009   1,380
                             Chia-Yi                                 

  Phoenix Hot\--Spring Hotel Yi-lan County     206      12/31/2009   2,000

  Reng Hu Hotel              Posha Township,   309      12/31/2009   1,400
                             Penghu County                           

  Green Garden Hotel and Spa Hua-lien County   218      7/31/2010    1,000

  Jaguar Hotel               98, King-Tai      126      12/31/2010   5,000
                             Road, Taipei                            

  Total                                        13,092                90,227
  -------------------------- ----------------- -------- ------------ --------

Source: Tourism Bureau, MOTC

**4. Opportunities for Growth-Aiming Chinese Tourists**

The complete opening of the tourism market to mainland Chinese tourists
will be one of the most important keys to Taiwan's tourism market in the
future. 21.3 million Chinese (person-time) traveled abroad in 2006 (2006
China Travel Yearbook). According to Travel Industry Association of
America, the numbers of Chinese people traveling abroad will triples by
2020 and Taiwan is at the top of their "wishing-to-go list".
![](media/image3.jpeg){width="3.542361111111111in"
height="2.654861111111111in"}

Tourism and foodservice closely connected. Whether or not Chinese
tourists visit Taiwan for its gourmet food like tourists from other
countries, the large amount of travelers will boost the food service
business in Taiwan as "people eat" and "eating" is an important part of
Chinese culture. The development of tourism will directly benefit
hotels, restaurants, airline catering business and so forth.

Taiwan is famous for its offering of authentic Chinese cuisine from
every province of China and its chefs are becoming famous for their
ability to incorporate ingredients and foods from other culture into
fresh and healthy, new fusion dishes. While the Taiwan gourmet is active
in promoting Taiwan as a tourist destination, Taiwan tourists are also
very active and enjoy traveling around the world. They are very curious
travelers willing to try new foods and often bring back foreign foods
and ideas to the Taiwan market. From Dec. 14 to 17, 2007 the Taiwan
Tourism Agency will host the International Travel Fair at the TWTC.
Please see our website at
[www.usfoodtaiwan.org](http://www.usfoodtaiwan.org/) for more
information about this show and other activities related to the Taiwan
HRI sector.

![](media/image4.jpeg){width="1.8027777777777778in"
height="3.551388888888889in"}