September 5, 2023

Industry Trends: How the COVID-19 Pandemic is Impacting Taiwanese Tourism and Consumer Spending


covid 2022 March



With transparent information available online along with proactive countermeasures, the Taiwanese government has contained the situation to moderately serious in the eyes of many consumers. Here is how it has affected customer spending.

As countries around the world are fighting to contain the COVID-19 Coronavirus, the number of confirmed cases has climbed to over 100,000. With the majority of Taiwanese citizens preparing for the situation to worsen in the next year, our first report in this series will look at how this sentiment affects consumer spending.

With China quarantining many cities following the Lunar New Year, many factories in China have yet to reopen and will reassess the virus’ threat at the end of March. As a result, many industries are experiencing supply chain shortages. Notable automobile manufacturers have delayed production of new automobiles which is expected to cause a 10% hit to their top-line revenues this year.

In Mainland China, aggregate hotel occupancy fell from 70% to 17% during the period of January 14-26 as news of the Coronavirus spread. As Taiwan proactively mobilized their Central Epidemic Command Center, their safeguards in conjunction with the accurate indexing of confirmed cases on various government websites have contained the number of cases to under triple digits.

According to our research, 35.1% of respondents feel that the situation in Taiwan will remain the same while 23.0% think things will improve.

Using the previous data gathered during the SARS outbreak from the tourism and hospitality industry in Mainland China, Hong Kong, and Singapore, hotel occupancy fell from 70% to as low as 10% after the WHO announced a global alert about the virus. With the situation being contained in July, occupancies returned 70% around August. The majority of Taiwanese respondents (54.4%) feel that the COVID-19 epidemic will improve in the next 4-6 months.

Opinion Elites, the high-income, highly-educated segment, are the first to hear about new updates and trends: 29.3% of this group maintain a positive outlook and believe things will start recovering within 12 months. The sporting goods and fashion industry would benefit from targeting this group as they will have more disposable income.

With no definite timeframe as to when the travel restrictions across Asia will be lifted, the number of inbound tourists into Taiwan will decrease and have adverse effects on the country’s GDP. Research suggests that the SARS epidemic caused a 0.4-0.77% reduction in Taiwan’s GDP. Planning for similar shocks in 2020, the labor demand within restaurants, hotels, and the travel industry are expected to decrease by at least 3.3-5.9%.

As most countries do not have proactive measures in place to diagnose and quickly contain positive cases, the lack of transparency and limited testing capabilities will make the virus endemic in many countries.

Asymptomatic carriers can easily become super-spreaders as witnessed in South Korea and put hundreds more people at risk.

The COVID-19’s longer incubation period (14-24 days) compared to other influenza viruses not only means that asymptomatic people are contagious for longer periods of time, but also that there is a higher chance of tissue damage in other places of the body once symptoms manifest. As the lungs are fighting off the virus, the immune system’s inflammatory response naturally increases: this oftentimes damages the liver and kidneys as well. As a result, Intensive Care Units (ICU) in most hospitals around the world will not have enough equipment or beds to provide treatment to every severe COVID-19 case.

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Based on dynamic transmission simulations, the 1918 Influenza strain occurred in three waves. As Taiwan has curtailed the first wave of the COVID-19 virus, the country will most likely have to sustain a high alert level to prevent a second or third wave of infection. With schools closing and re-opening at an inopportune time, the virus could spread again. As a densely-populated island with 23 million residents, public health measures promoting proper social distancing and hygiene would have to be prolonged in order to prevent recovered patients from re-infecting the public. All these measures will continue to hurt interconnected industries, such as the restaurant and recreational industries.

After SARS was contained, the Taiwan Tourism Bureau worked with many companies within the travel and hospitality industry to attract inbound tourists to Taiwan. With arrival numbers dropping by as much as 71.54% during the crisis, the TTB reported that growth rose at a steady rate of 8% each month. Using this data, it would take at least 8 months after a similar Coronavirus recovery for the tourism to bounce back.


Download the full report here.