Why we love Chinese tourists

The inbound Chinese tourist market is one example where Australia stands to reap the benefits of that lower Aussie dollar.

A combination of data in the past two weeks indicates that tourism is rising quickly and already having an impact on the economy has it digests the end of the mining investment boom.

While tourism was little flat in July overall the inbound number is up 5.9 per cent on the year to July at 7.14 million visitors. However the Chinese segment, including Hong Kong saw growth jump 17 per cent to a record 1.15 million visitors.

CommSec believes that China/Hong Kong tourism will pass New Zealand by June next year.

Of course problems within China could dent that figure but with competitive attractive packages on offer, fuelled by a lower currency, Australia is fast returning as a desirable destination for international tourists. And with more airline capacity coming online from both China and the United States expect to hear more foreign accents in your neighbourhood soon.

But it’s the Chinese market that everyone is watching. According the recent figures from Tourism Research centre at Tourism Australia, China is now Australia’s most lucrative tourism market by spending, up 25 per cent rise to $6.4 billion in the year to June 30. And their spending is rising faster than their arrival numbers.

Tourism Australia shows Chinese visitors rose 22 per cent to a record 864,000 in the June 30, outstripping record arrivals from the United States, up 9 per cent to 544,000, and New Zealand, up 3 per cent to 1.2 million. India reported a 20 per cent increase in arrivals to 207,000, but this was driven by visitors for the Cricket World Cup. Still India is another market that Australia is targeting as a tourism market of the future.

Victoria reported an 11 per cent rise in arrivals, overtaking Queensland as the second-most-popular state visited by international tourists, behind NSW.

But all that growth needs to be met by supply and recently China Southern Australia and New Zealand managing director Louis Lu told the Financial Review that Australia needed to lift its game in the areas of accommodation and access to restaurants if it wanted to keep growing.

Interestingly Tourism Australia has been highlighting Australia’s attractiveness as a world-class food and wine centre in its overseas campaigning.

Mr Lu’s comments are important as China Southern is the largest airline operating between Australia and China, and is soon to lift frequency between the two markets. Mr Lu observed that Australia hotels were basically too small to cope with demand and more needed to be built.

He said that even his expanding airline group was now finding it difficult to access adequate accommodation for the China Southern air crews when they laid over in Sydney.

He also made the point that restrictive operating hours in Australia’s hospitality industries was also a ‘turn-off’ for visitors.

The question of building more hotels in our major cities has become a growing problem recently as many tourist venues have been converted in city apartments. The industry in Sydney and Melbourne is now reporting nearly full houses at certain times of the week.

Figures reinforcing this have just been published showing room rates and yields on the rise, particularly in tourist-dominated areas. According to the hotels.com index room rates jumped 14 per cent in Queensland’s Port Douglas while nearly Cairns rose 4 per cent with the more expensive Whitsunday Island resorts also up 4 per cent. All three were benefiting from the lower $A and cheaper Asian airfares.

Other Queensland tourist areas were also improving while in the major cities Melbourne was up 5 per cent and Sydney 4 per cent. Brisbane was down 1 per cent and major resource centres including Perth and Darwin were still struggling following the end of the mining boom. Across the nation room rates had improved 2 per cent the latest sixth month period.

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