Coronavirus and Taiwan’s tourism industry

Coronavirus aka COVID-19 aka “Wuhan flu”: If there’s a bigger news story in 2020, I dread to think what it might be. Earth attacked by extraterrestrials, perhaps?

The intersection of travel and business has always interested me as much as actual destinations, so no one who knows me can have been surprised that I decided to write about the current epidemic’s disastrous impact on tourism-related businesses. This is the original (and somewhat longer) draft of my article “A lost season for the tourism industry” in today’s Taipei Times.

On February 9, licensed tour-guide George Lu realized things were likely to get worse before they’d get better. The official death toll from COVID-19 in China had topped 800, and the virus had spread to several other countries.

The previous day, Taiwan’s Central Epidemic Command Center had announced that travelers entering the country after transiting through Hong Kong or Macau would have to stay in home quarantine for 14 days. As people throughout the world reviewed their travel plans, Lu received a slew of coronavirus-related cancellations. He decided he’d have to develop another source of income.

That afternoon, he put a notice on the bulletin board in his apartment building in New Taipei City’s Tucheng District, advertising his services as an English tutor. The following day, he visited the language center in neighboring Banqiao District where he taught between 2007 and 2012.

The language center’s boss didn’t offer him any work, yet Lu left feeling somewhat reassured: “He told me that several of his students had quit because their parents didn’t want them to risk catching ‘Wuhan flu’ in the buxiban [cram school], and that they were now being tutored at home.”

Lu has found some students, but his current income is less than a quarter of what he can earn by leading tours for 20 to 25 days each month. “Unlike tourists, students never tip,” he rues.

In Taiwan, few industries are feeling the pinch from COVID-19 more than tourism. The epidemic was likely one reason behind the abrupt closure earlier this month of the Landis Taichung, a five-star hotel.

Taipei’s National Palace Museum, a must-see for both Taiwanese and foreign tourists, was visited by a mere 62,144 people in February 2020, compared to 207,677 people in January, and 407,593 in February 2019. According to a volunteer answering the telephone at the visitor center in Checheng, the number of people visiting this spot in Nantou County on weekends is “down by more than half.”

“Our first coronavirus cancellation was an Israeli couple who’d signed up for a 14-day tour. They arrived in Hong Kong on January 27, and immediately decided to head home,” says Mark Pemberton, founder and managing director of Life of Taiwan. (This reporter writes and consults for Life of Taiwan on an ad hoc basis.)

According to Pemberton, about 80% of his company’s tours between mid-January and the end of April have been scrapped, and he’s bracing for further cancellations or postponements.

Life of Taiwan has been offering full refunds or credit for those who plan to rebook at a later date. The former cost the company a significant amount of money, even if all deposits paid to secure accommodation are retrieved. “If a client pays by credit card, the card company takes at least 2% before passing the money onto us. If we give a refund through the card, the client has to receive the full amount, so we need to pay another 2% on top of the amount we send. We end up out of pocket,” Pemberton explains.

Twenty passengers on the cruise ship Celebrity Millennium booked a one-day excursion to the Pingxi Sky Lantern Festival through Life of Taiwan. However, as the vessel approached Keelung in early February, the authorities denied it permission to dock, because of virus fears. “That tour was sold on non-refundable terms, but we decided to give a full refund as it was an unavoidable situation,” says Pemberton.

He praises his core employees for their willingness to shift to a part-time schedule in order to cut costs, saying: “I certainly sympathize with agencies which have heavier overheads. We’re going to use this quiet period to optimize our products and refine our systems. We want to bounce back as an even better company — but this year is going to be a wipe-out. We have the resources to ride out the storm until 2021. While we’re not counting on government assistance, we do hope there’s some help for the industry as a whole.”

“We’re hoping to be back on track by September or October,” says Simon Foster, co-destinations manager (with his wife, Tot) at the Taiwan office of cycling-tour specialists Grasshopper Adventures.

“The effective job Taiwan has done so far at minimizing the impact of the virus has been noted by the international press, and may be the reason we continue to get bookings for later in the year, while operators we know in other countries are not. But we’ve written off the first half of the year, and June to September is our quiet season,” he goes on to explain. “There’s little we can do about [the situation]. We’re trying to turn this crisis into an opportunity, and use the time to get our new bikes road-ready, improve business practices, train staff, and get on with the other jobs we don’t normally have time for.”

None of the luxury or high-end hotels contacted by this reporter were willing to discuss the pandemic’s impact on occupancy rates or food-and-beverage sales. Some smaller businesses, however, are candid about the struggles they’re facing.

“Most homestays in Yilan have suffered a lot of cancellations for this month and next month,” says Chris Kuo, former chairman of the Yilan County Lodging Association. “Some were due to fights being cancelled,” he adds.

“The Tourism Bureau is offering several different loan schemes, and I’m suggesting to our members they use these tools to reduce short-term financial pressures. They can also adjust staff working-hours,” advises Kuo. Unlicensed accommodation providers — which, he estimates, account for 35% to 45% of Yilan’s B&Bs — aren’t eligible for government help.

“So far, I’ve not heard of an unusual number of homestays closing down, or their owners trying to sell them. However, if the coronavirus crisis isn’t easing by the end of April, I think we could see several going out of business,” says Kuo, who with his family owns and manages three B&Bs in the Luodong area.

“Actually, during situations like COVID-19, many travelers prefer small homestays to big hotels,” Kuo points out. He foresees that, if the epidemic gets worse, some urbanites are likely to temporarily relocate away from crowded cities: “We’re designing a long-stay program. We don’t know if it’ll work, but it’s a way to try to increase the occupancy rate. We’ll give it a shot.”

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A Touch of Zen Guest House in Kaohsiung’s Zuoying District saw revenues drop by nearly 40% in February compared to the previous month. “Things dried up pretty abruptly [in February], with a bunch of cancellations and far fewer new bookings. We were fully booked the weekend of February 8 by runners joining the Kaohsiung marathon, but the event was cancelled due to COVID-19. All of our reservations that weekend were understandably canceled,” says co-owner Yueh Shu-wen.

A Touch of Zen had its soft opening last April and its grand opening in September. “In October, when we were fully booked for 12 nights and partially booked for another 11 nights… December and January were even better,” Yueh says.

At a different location, Yueh and her husband used to run Bark, a hot-dog restaurant that they permanently closed on March 15.

Because of coronavirus fears, “dine-in business has been down for everyone, but we think recently we did better than other restaurants, as we had two open-air dining areas,” she explains. “A lot of people prefer that kind of environment than in a closed place with an air-conditioner recycling air. Families with kids told us just that: They felt safe, because they could eat in our courtyard.”

“Even though business was solid for most of the four and a half years we were open, we’d been planning to close this spring due to other factors,” says Yueh. “We probably would’ve stayed open through April or May, but COVID-19 made us shrug and say, ‘why bother?’”

Some travel bloggers are having to tighten their belts. “My website’s traffic and earnings, with which I currently support my family of two adults and two infants, are down about 70%,” says Nick Kembel, owner of Spiritual Travels.

“Pre-coronavirus, I was seeing well over 200,000 page-views monthly on my site. Now it’s down to around 80,000,” says Kembel, who lived in New Taipei for more than a decade until October 2019.

The Edmonton, Canada-based writer/photographer spells out why he’s taking an especially big hit: “Normally, about 80% of my traffic is to my Taiwan content. After Taiwan, the places I mainly cover are Japan, South Korea, and Italy, some of the countries worst hit by the virus.”

“I’m a member of various blogging and travel forums, and it seems that travel bloggers covering Asia and Europe are being massively affected,” says Kembel. “Through a Facebook group I run, called ‘Taiwan Travel Planning,’ I’ve noticed that a trickle of people are still planning trips to Taiwan, but they’re all concerned about the situation on the ground — what will happen when they arrive, whether things will be open, and if unexpected travel bans or flight cancellations could wreck their trip.”

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