Hotel industry opening: Lai Cheng-yi: Taiwan is not afraid of competition

Lai Cheng-yi, chairman of the Taiwan Tourist Hotel Association, said Taiwan's tourist hotel industry is strong and not afraid of competition, and should make good use of this opening opportunity to advance into mainland China and the international market.

Lai Cheng-yi believes that this cross-strait service trade agreement, which opens Taiwan to mainland international tourist hotels, means that for Taiwan's tourist hotel industry, "although there will be an impact, we are not afraid."

He said that because Taiwan has over the past decades made its service quality quite good, service that wins through quality is the biggest advantage Taiwan's operators have in competing with the mainland.

Lai Cheng-yi pointed out that although the mainland has long fully opened Taiwan's hotel industry to set up locations in mainland China, because formal laws, detailed rules and related supporting measures are not yet clear and transparent, most operators invest in the mainland through third-place investment, making tax procedures complicated.

He said that the more places the money flow has to go through, the more times it gets taxed; after the opening, these procedures can be simplified.

Lai Cheng-yi also said that Taiwan's market of 23 million people is too small. If the two sides open up, it will definitely be good for domestic hotel operators, because the two sides share special historical and cultural ties and have common languages and culture. The whole world wants to engage with the mainland through Taiwan, and Taiwan should make good use of this advantage and opportunity to enter Europe, America and the international market through the mainland market, increasing Taiwan's competitiveness in the global market.

Regarding outside worries that the service trade opening allowing the mainland to invest in tourist hotels in Taiwan will impact the survival space of Taiwan's operators, Lai Cheng-yi analyzed that the current average room rate for tourist hotels in Taiwan is about NT$3,600, far lower than the average room rate level of NT$5,000 to NT$6,000 in Hong Kong, China, Singapore and elsewhere. He estimated that after considering Taiwan's prices, land prices and market size, mainland investors should not consider investing in tourist hotels in Taiwan.

Lai Cheng-yi said, "Opening this item will not have too great an impact on Taiwan, so everyone need not worry."