Taiwan hotel performance update
Certain markets in the Asia Pacific region are making strong progress toward hotel performance recovery, due almost exclusively to domestic demand. Although domestic demand in Taiwan is not insignificant, the market is still well behind in the recovery process due to a slow vaccination rate and the emergence of new virus variants amid reopening.
In this latest piece, we take a quick look at Taiwan’s occupancy timeline as well as the overall trend around average daily rate (ADR).
Hotel occupancy timeline
As Taiwan effectively controlled the pandemic last year, the government rolled out plans to revive the market’s ever important tourism industry. During the second phase of eased measures (1 July -31 October 2020), government subsidies lifted domestic tourism and in turn produced occupancy levels as high as 45.5% (October 2020) and 43.6% (August 2020). Also, during that period came a reopening of Taiwan’s railways.
A third phase of eased measures (1 October -31 December 2020) included a slow border reopening to international tourists. As illustrated in the chart below, that reopening was not accompanied by an influx of hotel demand as arrivals were predominantly long-term stay residents and not leisure travelers. Most recently, occupancy in the market has worsened and headed back toward the low points of 2020.
ADR flat, other than festival periods
Taiwan’s ADR has only been higher during peak event periods. For the week ending with 3 January 2021, which coincided with the Alishan Sunrise Impression Concert, Taiwan reported an ADR level of TWD5984.92, its highest weekly ADR since thus far in 2021.
Among the numerous Lantern Festival events staged each year, the Taiwan Lantern Festival is the largest in scale and the most important. ADR came in at TWD5082.29 for the week ending 14 February.
From that point, rate levels flattered and eventually fell to as low as TWD3258.60 for the last week of May.
Long way to go
Taiwan has quite a way to go before the market is back to pre-pandemic levels. For example, Taiwan’s occupancy came in at 20.9% in May 2021. That was up from May 2020 (17.5%) but substantially below May 2019 (66.2%). ADR is even further behind the pace—TWD3,509.55 in May 2021, TWD3,636.62 in May 2020 and TWD5,377.21 in May 2019.