Market overviewThe hotel industry in Taiwan has been expanding, albeit slowly, in the past several pre-pandemic years and had more than 3,400 hotels in operation in 2019. The revenue of international hotels exceeded 50 billion New Taiwan dollars and the revenue of local hotels approached ten billion New Taiwan dollars that year. 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 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, increasing demand for “staycations”, and a revival of the domestic tourism are opening new opportunities for hotels located in scenic areas, especially those featuring wellness components, such as spas and hot springs.
Major challengesTraditionally, Taiwan’s tourism and hospitality market is highly affected by geopolitical ups and downs. The occasional strengthening of the cross-strait relations usually resulted in a surge of mainland Chinese tourist arrivals and a boost in revenues of hospitality - and in particular, 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.
Furthermore, reflecting the global trend of 2020-2021, the hotel industry in Taiwan was muted by the COVID-19 pandemic.