Marginal economic impacts of inbound tourism to Taiwan and policy evaluation†

† The first version of the paper was presented at the annual Min-Chung University conference of “Tourism Development and Challenges”, in Taipei, Taiwan on October 2003. This paper is a revised version.

Abstract

This paper presents the economic impact estimation for international visitors to Taiwan using an Input–Output Model to demonstrate the differences of economic contribution by market segments. Economic impacts are compared based on visitor segments by country of residence and travel purpose. The results indicated that high spenders contributed two to three times more expenses in Taiwan than low spenders. In 2000–2001, excluding airfares, business visitors from North America (US$1,360), Japanese sightseers (US$1,323) and Singapore/Malaysia sightseers (US$1098) were the top three segments in terms of per person per trip expenditure, whereas tourists from Korea with a purpose of visiting friends and relatives spent approximately US$314 per party per trip. Type I multipliers on sales, personal income and value added were similar across all visitor segments. Type I jobs to sales multiplier, however, had stronger variation by segments, depending on the relative composition of different items/services that visitors consumed during the trip. Policy implications are proposed for the Taiwan national tourism policy, “Doubling Tourist Arrivals Plan”, which aimed to increase inbound tourism from 2.7 million person visits in 2002 to 5 million person visits by 2008. It is suggested that multiple indicators, such as length of stay, segment shares, and daily spending by individual visitor segments, should be concurrently incorporated in the policy formulation and evaluation process. Relying on one measurement objective, such as 5 million yearly visits, is inadequate in determining the overall achievement and efficiency of tourism policies.

† The first version of the paper was presented at the annual Min-Chung University conference of “Tourism Development and Challenges”, in Taipei, Taiwan on October 2003. This paper is a revised version.

Keywords:

• tourism economic impacts
• input–output analysis
• Taiwan

Acknowledgements

The author would like to express her gratitude to Dr Daniel Stynes at Michigan State University and two anonymous reviewers for their comments on the earlier draft, and Taiwan Tourism Bureau for supporting the data.

Notes

† The first version of the paper was presented at the annual Min-Chung University conference of “Tourism Development and Challenges”, in Taipei, Taiwan on October 2003. This paper is a revised version.

1. Although visitors with study purposes incurred the highest spending per person per trip (twice of the sightseeing visitors), this subgroup is not the major focus in the study due to 1) trips with study purposes are not included in the official definition of tourism by World Travel Organization, 2) factors to facilitate trips with study purposes are beyond the control of general tourism agencies and currently, Taiwan Tourism Bureau does not have any specific policy for this subgroup, and 3) visitors to Taiwan with study purposes contributed only 1% of the total inbound tourism in 2001. Due to the difficulties in managing and relatively small scale of visitor number, this subgroup is not specifically discussed in this study. The spending patterns and travel characteristics of visitors with study purposes, however, deserve further attention.

2. Market shares of North American, European and Japanese visitors were 56% in 2002. Expanding these three markets by 10% will bring up the share to 61% by 2008.

Additional information

Notes on contributors

Ya-yen Sun

E-mail: [email protected]