Ms. Tsai has held her ground, however, and demonstrated that a declining number of Chinese tourists can be offset, to some extent, with visitors from other Asian markets.
Last year, international arrivals in Taiwan reached a record high of nearly 10.7 million, up from 10.4 million in 2015, according to the Tourism Bureau. That happened even as arrivals from China dropped more than 600,000, to 3.5 million, after Beijing urged tour group operators to reduce travel to Taiwan. Many of the new visitors were from Southeast Asia, whose numbers rose 16 percent.
Figures from the first three months of this year show, however, that while Southeast Asian arrivals exceeded 478,000, up 36 percent from the same period in 2016, the number of Chinese visitors continued to drop, by 42 percent, to just under 660,000. This pulled down total arrivals by 10 percent in the first quarter, putting pressure on Taiwan to attract more visitors from other Asian countries.
The search for alternative sources of tourism revenue is part of Ms. Tsai’s New Southbound Policy, a plan to shift Taiwan’s economy away from its dependence on China, and to strengthen ties with 18 countries in South Asia, Southeast Asia and the Pacific. Her predecessor, Ma Ying-jeou, had pursued closer economic relations with China, including the expansion of business and leisure travel in Taiwan.
The tourism component of the policy has focused on making it easier for Southeast Asians to come to Taiwan; visa requirements have been relaxed, new air routes have opened, and announcements at some train stations are made in Indonesian, Thai and Vietnamese. The number of Southeast Asian visitors is expected to rise further when Taiwan extends visa-free entry to the Philippines, most likely this year, as happened with Thailand in August.
Taiwan’s tourism industry is maturing at a time when a new generation of cash-rich travelers is emerging in Southeast Asia, said Tsai Hung-Jeng, director of National Sun Yat-sen University’s Center for Southeast Asian Studies.
“The economies of Southeast Asian countries are growing very quickly, and their middle classes are expanding rapidly,” Mr. Tsai said.
That is reason enough to pursue new markets, he said, but avoiding an overreliance on China is also important, he said, citing the experiences of South Korea and Hong Kong.
Peter Lin, sales director of Topology Travel, an agency in Taipei, said that under the policy, inquiries from the Philippines, Thailand and Vietnam had more than doubled.
Until last year, the agency’s Southeast Asian customers mostly lived and worked in major Chinese cities. But now, clients are coming directly from Vietnam and Thailand, he said, spending as much as $400 per person a day, excluding accommodations.
“They’re really, really high…