Hong Kong leads Taiwan as tourist destination for mainlanders

Taiwan will not threaten Hong Kong as the top destination for mainland Chinese tourists unless deep structural reforms are made.

A recent report by Bank of America Merrill Lynch said Taiwan has to loosen quota restrictions on mainland tourists and invest more in hardware and infrastructure.

The report noted that the quota system is still in place and that tourism infrastructure such as hotels and other related infrastructure in Taiwan needs to catch up.

“We believe Hong Kong's leading position will go unchallenged for a while longer," the report said.

These shortcomings could have led to a larger influx of mainlanders during Golden Week two weeks ago. Taiwan’s National Immigration Agency said Chinese visitors to Taiwan during Golden Week exceeded 50,000, up 149% from 2011.

One reason behind the government's reluctance to relax quota restrictions during the Golden Week holiday was to prevent tourism resources from being overstretched, thereby bringing down the quality of the tours.

Taiwan also needs to invest more in tourism. In 2011, Taiwan invested US$5.2 billion in travel and tourism or 1.1% of its GDP.

The ratio was significantly lower than countries that are traditionally more reliant on tourism such as Singapore (5.0% of GDP) and Hong Kong (2.0% of GDP).