Hotel industry in Taiwan - statistics & facts
Once considered a hidden gem, Taiwan has been an increasingly popular option on lists of Asia’s emerging holiday destinations. The island is recognized throughout the region as being at the forefront of culinary excellence, abundance of scenic spots, cultural richness, and great service. The annual number of inbound tourist arrivals in Taiwan has exceeded ten million since 2015, with majority of visitors coming from the neighboring countries and regions.
All leading international (with Marriott, IHG, and Hyatt in the forefront) and local hotel names already have their presence in major cities in Taiwan, especially in the oversaturated hotel market of the Taipei metropolitan area. Places outside of Taipei have been receiving more attention from the developers and investors in recent years. Changing market dynamics and a revival of the domestic tourism have opened new opportunities for hotels located in scenic areas, especially those featuring wellness components, such as spas and hot springs.
In addition, Taiwan’s tourism and hospitality market is highly affected by geopolitical ups and downs. The occasional strengthening of the cross-strait relations usually results in a surge of mainland Chinese tourist arrivals and a boost in revenues of hospitality - and particularly - the hotel market. In recent years, however, political strains between Taiwan and mainland China have caused a decrease in the number of mainland tourists and have created an unfavorable environment for hotel operations across the island.
Another fundamental challenge of the hotel market in Taiwan stems from the increasing foreign competition and the loss of guests and hotel staff to the developing economies of Southeast Asia. This means increasing efforts to focus on customer service as well as strengthening foreign-oriented marketing.
However, the surge of domestic tourism and a promising recovery of inbound arrivals has helped to ward off a disaster and allowed the Taiwanese hotel market to show resilience in 2023. At least five luxury hotel brands are scheduled to debut in Taiwan between 2024 and 2027. The demand for accommodation will likely remain strong.
Hotel brands and operators
According to the current regulations, the accommodation service industry in Taiwan can be roughly divided into three categories: tourist hotels, general/non-luxury hotels, and small guesthouses/homestays. The industry has been expanding, albeit slowly, in the past several pre-pandemic years and had more than 3,400 tourist and general hotels in operation since 2017. The revenue of international tourist hotels exceeded 49 billion New Taiwan dollars and the revenue of local hotels approached 10.3 billion New Taiwan dollars in 2023. Overall, foreign-owned hotels have been showing better performance on average in terms of staff turnover, advanced training of human resources, and a better reputation among foreign visitors. However, locally branded resorts (e.g., Silks Place, The Lalu, Alishan House) and local hotel chains (e.g., those operated by Silks Hotel Group, Hotel Royal Group, LDC Hotels & Resorts) are key players in the Taiwanese hotel market enjoying a stronger performance of revenues per available room and a higher brand image among local consumers.All leading international (with Marriott, IHG, and Hyatt in the forefront) and local hotel names already have their presence in major cities in Taiwan, especially in the oversaturated hotel market of the Taipei metropolitan area. Places outside of Taipei have been receiving more attention from the developers and investors in recent years. Changing market dynamics and a revival of the domestic tourism have opened new opportunities for hotels located in scenic areas, especially those featuring wellness components, such as spas and hot springs.
Major challenges and opportunities
Reflecting the global trend of 2020-2021, the hotel industry in Taiwan was muted by the COVID-19 pandemic. In 2020, the number of tourist arrivals in Taiwan plummeted to a mere 1.4 million and the annual revenue from international tourism dropped by approximately 88 percent. Naturally, the occupancy rate of tourist hotel rooms decreased from an average of 65 percent in 2019 to around 37 percent in 2020 and was even lower in 2021. It started slowly picking up in 2022 only. Hotels traditionally profiting from international guests and city hotels were hit the hardest.In addition, Taiwan’s tourism and hospitality market is highly affected by geopolitical ups and downs. The occasional strengthening of the cross-strait relations usually results in a surge of mainland Chinese tourist arrivals and a boost in revenues of hospitality - and particularly - the hotel market. In recent years, however, political strains between Taiwan and mainland China have caused a decrease in the number of mainland tourists and have created an unfavorable environment for hotel operations across the island.
Another fundamental challenge of the hotel market in Taiwan stems from the increasing foreign competition and the loss of guests and hotel staff to the developing economies of Southeast Asia. This means increasing efforts to focus on customer service as well as strengthening foreign-oriented marketing.
However, the surge of domestic tourism and a promising recovery of inbound arrivals has helped to ward off a disaster and allowed the Taiwanese hotel market to show resilience in 2023. At least five luxury hotel brands are scheduled to debut in Taiwan between 2024 and 2027. The demand for accommodation will likely remain strong.
