Destination Taiwan is hurting
Taiwanese love to travel, but the region as a tourism destination is hurting.
The Balance of payments figures released by Taiwan’s central bank on Wednesday showed a net deficit of US$2.3 billion in tourism service payments in the third quarter of 2019, while travel expenditure by Taiwanese going abroad totaled US$5.71 billion due to the increasing popularity of outbound tourism. Both figures hit record quarterly highs, according to the central bank.
The number of inbound tourist arrivals in Taiwan grew at an average of 10.4 percent in the first three quarters of this year, which boosted Taiwan’s tourism revenue and helped lower the tourism deficit for the same period of last year, the central bank said.
The tourism deficit refers to the difference between the amount of money Taiwanese spend on travel abroad and the amount spent by foreign visitors and domestic tourists.
For the third quarter alone, although the number of inbound travelers continued to grow, contributing US$3.42 billion to Taiwan’s tourism revenue, the deficit still hit a record high due to the peak season for outbound travel.
In addition to record high outbound tourism expenditure in the first three quarters, travel revenue also hit a record high for the same period, according to the central bank.
Beijing announced in late July that starting Aug. 1 it would suspend a program that allowed individual tourists from 47 Chinese cities to travel to Taiwan and the ban impacted Taiwan’s tourism in the third quarter, according to the central bank.
Tourist arrivals grew by 6.5 percent in the third quarter of this year compared with the same quarter last year, with the growth mainly in arrivals from Japan, South Korea, the Philippines, and Thailand, with just 3 percent from China.
Since April 2018, China had been the top source of foreign visitors but in September, Chinese became the second largest group after Japanese. This shows the Chinese travel ban has had a significant effect on Taiwan’s inbound travel sector, according to the central bank.
Meanwhile, the central bank on Wednesday reported a surplus of US$1.25 billion in its overall balance of payments, an increase of US$9.41 billion in net assets on the financial account and an increase of US$4 billion in the bank’s reserve assets in the third quarter.
In addition, in the third quarter, Taiwan registered a net outflow from its financial account for the 37th consecutive quarter.
According to statistics compiled by the local central bank, Taiwan’s financial account, which measures the flow of direct investment and portfolio investments, showed a net outflow of US$453.3 billion over the past 37 quarters, meaning Taiwanese own more assets abroad than foreign entities own in Taiwan