The Crowding-out Effects of Chinese Tourists on Inbound Tourism in Taiwan

Abstract

This study conducts multiple regression analysis to establish a forecasting model for the number of inbound tourists to Taiwan from different countries. Monte Carlo simulation is used to forecast the number of inbound tourists to Taiwan from different countries and to evaluate whether the opening-up to Chinese tourists has a crowding-out effect on tourism demand. The empirical results indicate that, except for Australia and the UK, the inbound tourists from the sampled countries suffered from varying degrees of crowding-out effect as a result of Taiwan's opening-up to Chinese tourists. This is particularly noticeable with tourists from Korea, Singapore and the USA. In terms of regional effects, Asia is the most affected by the opening-up policy, while Europe and Oceania are less affected. However, the number of inbound tourists from different countries has not dropped, but shows an upward trend.