Today the nation will receive the first cross-strait flights agreed upon last month. There is hope that tourists will spend enough money to significantly bolster the economy, but an increasing number of people are realizing that the benefits of cross-strait tourism amount to only so much and will benefit only a small section of the economy.
The decision to welcome Chinese tourists is not new. The Democratic Progressive Party (DPP) government also invited Chinese tourists, but Beijing declined to negotiate lest the DPP score political points at home that could win it another term in power. But when President Ma Ying-jeou (馬英九) offered to admit Chinese tourists starting this month and to launch weekend cross-strait flights, China came to the negotiating table, allowing Ma to deliver on his election promise. It also agreed to reopen cross-strait talks after a decade-long hiatus.
If we believe the media hype, tourists from China will prove to be the nation’s economic salvation. Ma repeatedly said Chinese tourists would spend NT$60 billion (US$1.97 billion) a year. But that figure was based on 3,000 tourists entering the country per day. Beijing has since decided to allow at most 1,000 tourists per day, which, if Ma’s estimates of average spending per tourist are correct, would put the annual figure at NT$20 billion.
Airports, airlines, county and city governments, scenic area administrations and businesses are vying for business opportunities — real or imagined — as the tourists arrive. With little thought to problems of capacity and adequate facilities, eight airports have been appointed to handle direct flights. Once the novelty is gone, however, and we’re back to the daily routine, most of these airports may have to close their extra services because the small number of daily cross-strait flights will not support them.
Mandarin Airlines (華信航空) offers one example of the imprudence of laying out plans based on political symbolism instead of a sound understanding of the market. To be able to offer the first cross-strait direct flight, the airline planned a 3:30am flight to Nanjing, but had to cancel because it did not attract enough passengers.
Many scenic areas, hotels and shop owners have waited impatiently, rubbing their hands and calculating the profits they stand to gain from Chinese tourists. They have refurbished their establishments and put up signs in simplified Chinese. But the government’s pie in the sky may not be big enough to offer each of these establishments more than a few crumbs for their efforts.
Because Chinese tourists will travel in group tours, tour operators will control their itineraries. Establishments lucky enough to have agreements with these companies may do well, while their competitors will earn poor returns on their investment.
Improving the quality of the tourist experience should be part of broader improvements to the industry. The government and the private sector should not put so much of their stock in Chinese tourists but focus also on domestic and international tourism to bolster each sector of the economy. This is the best and most pragmatic approach, not least because of the unpredictability of cross-strait relations and Beijing’s “goodwill.”
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