FIRST TIME EVER: More Chinese than New Zealanders visited Australia last year

Steve Holland/G20 Australia via Getty Images

Australia’s already bustling tourism sector got a little bit busier in March with short-term visitor arrivals surging to yet another record high.

Short-term arrivals jumped by 3.5% to 666,000 after seasonal adjustments, the largest monthly total on record, according to the Australian Bureau of Statistics.

In the 12 months to March, total short term arrivals numbered 7.61 million, again the largest increase on record.

That figure represents an increase of 8.1% on the numbers in March 2015.

The chart below tells the story.

By individual nationality, arrivals from New Zealand over the past 12 months numbered 1.31 million, the highest of any country.

However, when arrivals from China and Hong Kong are combined — something which we have done — the combined total came in at 1.33 million, making it the largest source of short-term visitor arrivals over the past 12 months.

This is the first time New Zealand has lost top spot in the history of the survey, dating back to 1991.

The UK, USA, Singapore and Japan rounded off the top six list, with annual short-term arrival numbers of 694,300, 630,100, 405,100 and 356,900 respectively.

Compared to numbers seen in the year to March 2015, arrivals from China including Hong Hong rose by 21.3%. It was followed by the USA at 11.7%, 8.9% for Japan, 8.4% for Singapore, 4.6% for New Zealand and 3.9% from the UK.

The chart below, showing the recent trend in arrival numbers from these nations, is truly breathtaking.

While there are numerous factors behind the acceleration in visitor arrivals — increasing wealth levels in China and more direct flights just to name two — the falling Australian dollar has also been a contributing factor, as demonstrated by the strong levels of growth in arrivals from the US, Singapore and Japan.

It has also helped to lift spending in Australia’s tourism sector, as demonstrated in the chart below, supplied by the Commonwealth Bank.

It shows the relationship between the Australian dollar and Australia’s tourism trade balance — simply the net value of Australian tourism imports versus exports — with the scale for the currency inverted.

There is a clear relationship between the two, with the weaker Australian dollar helping the tourism trade balance a monthly surplus of $733 million in March, the largest one-month total on record.

“A lift in tourists from China as well as a slowdown in Australian resident departures underpins the strength in the tourism trade balance,” said Gareth Aird, senior economist at the NAB.

The influx of money — both from international visitors and Australians choosing to holiday at home — is being funneled into the Australian economy, helping to lift employment and retail spending as a consequence.

With the Australian dollar coming under renewed selling of late, it bodes well for the outlook for Australia’s booming tourism sector.

At a time of heightened pessimism towards the outlook for the broader Australian economy, this is something certainly worth celebrating.

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