Effect on Taiwanese Hospitality Industry of Opening Taiwan to Mainland Chinese Tourists: A Case Study on Japanese Tourists

This paper focuses on whether the policy of opening Taiwan to mainland China tourists negatively affected the intention of Japanese tourists to stay at international tourist hotels in Taiwan. Adopting an empirical approach, the study first establishes a forecasting model for the number of Japanese tourists who stay at international tourist hotels in Taiwan using the auto-regression method. Then, the number is estimated using Monte Carlo simulation. The subject is international tourist hotels in Taiwan that primarily receive Japanese tourists, and the study period is from 2001 to 2013. The empirical results indicate that opening Taiwan to mainland Chinese tourists had a significant impact on Japanese tourist intention and behavior with respect to staying at international tourist hotels in Taiwan. However, the significant impact only occurred during the initial implementation period of the opening-up policy. For the remainder of the study period, Japanese tourism was not negatively affected but exhibited an increasing trend.