THE BORDER WAS REOPENED IN Q4/2022

Since the Taiwanese government lifted COVID-19 restrictions in mid-October last year, the tourism market has gradually reopened. As of Q1/2023, the number of visitors to Taiwan reached approximately 1.1 million, approximately 40% of total tourist numbers during the first quarter of 2019. However, inbound tourists from Japan and China witnessed a sluggish recovery due to the depreciation of the Japanese yen and political factors as the cross-straits tourism market remains closed. According to Taiwan Tourism Bureau’s forecast, the inbound tourist target for 2023 is six million, which is approximately half of the number seen before the pandemic.

HOTEL TRANSACTIONS INCREASED DURING THE PANDEMIC

The pandemic has posed significant challenges to the tourism industry. According to data released by Taiwan Tourism Bureau, the average occupancy rate of Taiwan’s tourist hotels in 2020 and 2021 was 40% and 34%, respectively, representing a nearly 50% decline compared to 2019. Despite the successful containment of COVID-19 and several government initiatives to stimulate domestic tourism, hotels in metropolitan areas have faced serious challenges due to the absence of international tourists and business travelers. Many hotels were forced to close or become quarantine hotels as a result.

Meanwhile, the domestic residential market has experienced rapid growth driven by low-interest rates, resulting in significant increases in housing and land prices. This has attracted many developers to shift their focus toward purchasing hotels and redeveloping them into residential projects. Additionally, some medium and large-scale hotel operators have disposed of hotels as income properties to local insurance companies or professional investment institutions, driving momentum in hotel transactions during the pandemic period.