U.S. Visa Waiver, One Year Later

For the American Chamber of Commerce in Taipei

The statistical evidence is still inconclusive, but the travel industry sees good potential for promoting more visits to the United States.
tw business 1BY JENS KASTNER

In what both U.S. and Taiwan officials regard as the most significant development in relations between the two sides in some time, qualified Republic of China passport holders were included
within the U.S. Visa Waiver Program (VWP) on November 1, 2012. The change made them eligible to stay in the United States for up to 90 days without having to apply in person for a visa from the American Institute in Taiwan (AIT) in Taipei, saving them time, effort, and the NT$4,800 (US$160) application fee.

Just before the first anniversary of Taiwan’s inclusion in VWP, a number of organizations and travel operators active in the U.S. travel market participated in the 2013 Taipei International Travel Fair (ITF) held in late October. The prominent American pavilion, located right by the entrance to the exhibition, was the show’s biggest foreign representation.

Still, several factors seemed to seriously dampen the U.S. exhibitors’ enthusiasm. One was the lack of clear evidence that VWP had succeeded in substantially increasing Taiwanese travel to the United States during the past year. Another was concern that regardless of what had transpired over the last 12 months, the effect of the partial U.S. government shutdown from October 1 through October 16 would be lessened interest by local tourists in planning trips to U.S. destinations.

When Taiwan’s Vice President Wu Den-yih cut the ribbon to open last year’s ITF, he forecast that VWP inclusion would bring a 50% increase in Taiwanese travel to the United States, while local media at around the same time quoted AIT as projecting a rise of 47% by 2017. But trying to evaluate the actual results in the first year of VWP privileges for Taiwan presents some statistical challenges. According to figures from the U.S. Departure of Commerce’s Office of Travel and Tourism Industries, it would seem that VWP indeed had a positive impact. Its data shows that in the first and second quarters of this year, the number of Taiwanese visitors to the United States rose by 21.4% and 28.5% respectively over the same periods in 2012.

Statistics from the Taiwan Tourism Bureau paint a drastically different picture, however – a decrease in outbound Taiwanese travel to the United States by 26.1% in the first half of the year. Because travel to Europe suffered an even steeper drop of 54.8% in the first seven months of the year, while travel to Japan and Singapore increased by 54.1% and 30% respectively in the same period, it appears that a major shift in travel patterns has been under way. “The Taiwanese increasingly are forsaking their annual long-haul trip to the West to the benefit of several short-haul ones per year to East Asian destinations,” concludes Janet Chang, a professor at the Chinese Culture University’s Graduate Institute and Department of Tourism Management. The trend became discernable after the 9-11 terrorist incident, but has become even more marked in recent years.

But how to account for the discrepancy between the U.S. and Taiwan statistics? One possible factor is that the Taiwan Tourism Bureau’s data is based on which box   passengers leaving Taiwan tick on their exit forms, which may not necessarily be the same as their actual final destination. Someone on his way to the United States after a  stop-over in Tokyo, Seoul, or Shanghai would not be counted as a U.S.-bound passenger. (As a result of this methodology, to cite another example, the Taiwan Tourism Bureau sometimes puts the number of Taiwanese travelers to the U.K., Italy, or Switzerland at “zero.”)

tw business 2On the other hand, the U.S. figures may give an overly rosy impression of the situation, noted industry observers interviewed at the ITF. In 2012, in expectation that Taiwan would soon be included in the VWP (the U.S. government had announced in December 2011 that Taiwan was a candidate for the program), many would-be Taiwanese visitors to the U.S. postponed their trips until they could take advantage of the policy change. The consequence was to distort the basis for comparison, reducing the number of travelers in 2012 and increasing the number in 2013 beyond what would ordinarily be the case.

For its part, however, the ROC flag-carrier, China Airlines, seems to have no doubts about the actual trend. CAL reports a substantial increase in passenger volume to the United States since Taiwan joined the VWP. “Of all routes, the one to Honolulu posted the steepest increase of 57%, a clear result of the visa waiver program,” says Anita Wang of the airline’s Media Affairs office. Starting from June this year, CAL resumed direct flights from Taipei to Honolulu; the two nonstop flights a week supplement the previous service with a stop-over in Tokyo.

In July, Hawaiian Airlines also inaugurated three-times-a-week nonstop service between Taipei and Honolulu, citing the expected increased traffic due to VWP as the rationale. At ITF, Connie He, operations manager of Wasabi International Tours, a tour operator based on the “Big Island” of Hawaii, welcomed the VWP inclusion and subsequent promotions by China Airlines and Hawaii Airlines over the last year as bringing “a lot more Taiwanese” to the Hawaiian Islands. She noted that the direct flights carry the advantage of a 1 a.m. takeoff time, “meaning you can get a good night’s sleep.” The same holds true on the return trip.

Although Guam is not directly affected by the VWP, as Taiwanese could long travel to the territory without a visa, Jon Cramer, vice president of Skydive Guam, also noted a recent increase of Taiwanese customers. “Taiwanese used to make up about 2% or 3% of our market, but over the course of the year it has become 5%,” he said.

Continued uncertainties
On a less positive note, Wasabi’s He mentioned the difficulties caused by the partial U.S. government shutdown in October. Hawai’i Volcanoes National Park on the Big Island, a major tourist attraction, closed during that period to the great disappointment of visitors. “Customer numbers dropped between 10% and 20% on the Big Island during the shutdown, but have since recovered,” she said.

If the shutdown was a relatively insignificant one-time blip to Wasabi’s business, it amounted to a major blow for some others. Janice Cheng of FlyUSA, a Taiwanese travel agency specializing in U.S.-bound incentive and other group tours, said the company encountered a double disappointment. First the boom that FlyUSA had eagerly expected due to the VWP inclusion failed to materialize, and then came the shutdown, which “brought down our business by 60% year on year.” She described it as the third most frustrating development of career as a travel agent, after 911 and SARS.

Worse still, Cheng foresees that the shutdown’s damage will be continuing. “We know that the Grand Canyon, Yellowstone, and so forth will now be open until January 15, because the U.S. government budget until then has been decided on, but we don’t know what will happen after that,” she said. “Taiwanese interested in visiting the U.S. next year ought to be making their plans now, but they don’t know now if they’ll be able to see what they’re interested in.” She considers that customers will “simply think that now is not a good time to travel to the U.S. and book Japan instead.”

Jemy See, executive director of Discover America, Taiwan, an alliance of travel agencies, tourism offices, and airlines serving the U.S. market, put it even more bluntly: “The shutdown is a tw business 3disaster.” He says he gets phone calls every day from people who are worried about committing to spending their money and then finding out that they can’t see the national parks and volcanoes.”

Despite the conflicting indicators on the general state of Taiwan’s U.S.-bound travel, China Airlines is planning to expand flights on U.S. gateway routes – Los Angeles (LAX), San Francisco (SFO), and New York (JFK) – while also conducting feasibility studies on additional direct flights to destinations such as Seattle (SEA), Dallas (DFW), Houston (HOU), and Chicago (ORD), according to Anita Wang. In Hawaii, Wasabi is planning to continue promoting travel to the islands by supporting Taiwanese TV travel shows – arranging the Hawaiian itineraries for their crews and providing them with shuttle services.

Idaho Commerce, the state government’s business promotion bureau, has been conducting similar programs to foster tourism through cooperation with the Taiwan media.  According to Nancy Richardson, the bureau’s International Tourism Specialist, Idaho commerce over the past year has brought journalists to Idaho from mass-circulation dailies the Liberty Times and Apple Daily to enable them to produce travel stories featuring the state’s hallmark natural scenery and many outdoor activities. Guam Skydive’s Cramer also stressed the need for good media strategies, noting that Skydive has lately been getting a great boost in interest among young Taiwanese customers due to a thrilling music video by Mandarin pop star Fan Yi-chen (Van Fan), which was shot with him doing the company’s skydive and subsequently went viral on YouTube.

With regard to the cruise business, Holland America Line sales representative Vivien Tseng said that at a time when flight tickets from Taiwan to the United States have become more expensive than the cost of the actual eight-day cruise, the main priority for her company is to design low-cost last-minute offers and to educate Taiwanese travelers that cruises in the United States are not necessarily “the realm of the rich and retired school teachers.”

 

 

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