Australian tourism – one of the sectors critical as mining activity falls away – is seeing a surge in activity, thanks to a weaker Aussie dollar is driving an increase in international visitors, who are staying longer and spending more. And the Chinese are leading the charge.
According to ANZ’s latest economic insights report, China is now the leading source of inbound tourism, accounting for 18% of total international tourist spend. That’s more than the UK (12%) and Japan (5%) combined.
China’s expanding middle class is enjoying rising incomes, improved living standards, a strengthening currency, improved aviation connections and more open visa policies. These factors have lead to a boom in outbound travel, with 107 million Chinese travelling abroad in 2014.
ANZ research says a weaker Australian dollar is a key factor in record tourist arrivals and the way in which it has performed against other currencies tells the story:
Indeed, while the AUD has fallen sharply against the USD, it has weakened more sharply against the Chinese yuan, Singapore dollar and NZD, and thus provided more of a value boost to tourists from those economies. In contrast, the depreciation against the sterling and the yen has been more muted.
With further falls in the AUD, and improving global economic conditions, recent trends of rising visitor arrivals and increasing spend should continue.
Their latest survey shows Australia received 6.3 million international visitors in the first nine months of last year, up 8% on the same period in 2013. The number of visitor nights rose by 3% and spending per trip jumped 9% to a record $AU30.7 billion, a little over $AU4,700 per visitor.
The high influx of visitors isn’t just limited to China, and especially Hong Kong, with record arrivals from other Asian countries such as India, Indonesia, Malaysia, Singapore and Taiwan in the year to September 2014.
Tourism Research Australia expects Asia to account for 58% of international visitor arrivals growth over the next decade.