Taiwan shouldn't put all eggs in one China-shaped basket: The China Post

Tourists from China pose for a group photo in front of a Taiwanese flag, in Taipei, on May 5, 2016.
Tourists from China pose for a group photo in front of a Taiwanese flag, in Taipei, on May 5, 2016.PHOTO: REUTERS

It may sound trite, but there is some truth to the advice against putting all your eggs in one basket. 

Taiwan's tourism industry may not really be putting all its eggs in one basket, but its revenue has been depending heavily on travellers from China.

It marked a milestone last year when the number of incoming tourists broke 10 million, but it also served to show Taiwan tourism's growing reliance on Chinese travelers.

It is then not difficult to imagine the impact of a drop in the number of tourists from across the Taiwan Strait.

The latest figures from the Tourism Bureau showed that the number of Chinese travellers continued to rise in the period from January to April this year, up 10.61 percent compared to the same period last year.

But the number of Chinese travellers visiting in tour groups dropped about 30 per cent in May compared to the same month of 2015 — perhaps confirming previous rumours that Beijing would cut one third of the group tour quotas for cross-strait trips.

There may be political reasons behind Beijing's decision to cut the tour group quotas, but such a development is providing Taiwan with more motivation to rethink its economic policies.

Forget about the political implications of the economic policies. In pure business terms, it would be very risky for a company or a country to rely solely or heavily on a single market.

Investors and business partners would necessarily feel shockwaves from any economic, social or political turmoil in a market that they rely on. Therefore, it is always important for businesses to diversify their risks.

For Taiwan's tourism industry, its latest bid to diversify risks is to look to Asean, which is in line with President Tsai Ing-wen's "New Southbound Policy."

Last year, a total of 1.42 million tourists from Southeast Asia visited Taiwan, and the government has just announced further relaxation of the visa requirements for travelers from Asean, looking to boost the number of tourists from the area by at least 20 per cent this year.

The government says it is also stepping up campaigns to promote Taiwan in the area, and it expects Asean tourists to bring in NT$13 billion (S$541 million) in revenue for Taiwan in 2016.

It may not turn out in the way that the government expects, but at least the government is attempting to steer the country's tourism industry and the overall economy in a healthier direction.

It remains to be seen how the tourism industry can attract more tourists from Southeast Asia and India, both of which have seen dramatic increases in economic growth in recent years.

Promotional campaigns are certainly a must in terms of market. 

The Tourism Bureau said it is running events in Thailand this month to promote Taiwan. It has also arranged for a Bollywood production crew to do location filming in Taiwan, which is of course a move of embedded advertising.

But marketing is one thing; the actual product is another.  How is Taiwan going to turn itself into a product attractive enough for tourists from Southeast Asia and India?

The rapid increase in the number of Chinese tourists over the past few years has shown that Taiwan may not be ready for a tourism boom.

The recent embarrassment resulting from flooding at the Taiwan Taoyuan International Airport is an example. Taiwan needs better airport services — not just at Taoyuan, but also on other parts of the island.

We have heard many complaints about Chinese tourists — both from people who have to serve them and from ordinary citizens whose lives have been disrupted by the influx of these tourists into their neighborhoods.

But any such complaints may not go away even if the Chinese tourists are replaced by ones from other countries. Some of the complaints are inevitable results of trade-offs common among countries looking to boost their tourism.

Are Taiwan's people ready to accept such trade-offs?

The China Post is a member of The Straits Times media partner Asia News Network, an alliance of 21 newspapers.