The stunning transformation of Australian tourism

A tourist at the Opera House in Sydney, Australia. Photo by Cameron Spencer / Getty Images

The surge in Chinese tourist visitors to Australia is now well established. It is unprecedented in speed and scale and is driving a much-needed boom in the tourism sector.

Here’s the chart showing the growth since 1991:

But set this against the flow of tourist visitors from other countries over the past two decades and the scale of the transformation of the tourist market is revealed. This is from a recent note from Macquarie Research:

Macquarie Research

And then there’s this chart, which shows the explosion in dollar spend by Chinese tourists over just the past five years.

Macquarie Research

The left axis there, by the way, is billions of dollars. Some points to note:

  • Growth in British and Irish tourists fell after the GFC and, despite a recovery;
  • India is a rising market; and,
  • North America has been growing strongly in recent years and with the strong greenback this may continue.

Then there’s China. The 1.2 million visits from New Zealand is equivalent to roughly 25% of the country’s population. The 1 million visits from China is equivalent to 0.07% of its population.

And they spend an absolute motza.

Here’s Macquarie, emphasis added:

China is the leading source of Australia’s inbound tourism, contributing 22% of total visitors for the year ending Sep-15, and representing 21% of Australia’s total value of inbound expenditure (up 43% on pcp) with a record ~$7.7bn spend for the year (up 32% on pc). Improved living standards, rising incomes, increased accessibility to Australia via more accommodative visas, and development in aviation connections, have allowed China become Australia’s primary importer of tourism services.

The other major trend affecting the tourism sector at the moment is the rise in Australians taking breaks within Australia because the fall in the value of the dollar has made it increasingly expensive to travel overseas. Based on these trends Macquarie has added a significant Qantas holding to its Australian portfolio and says other domestic companies positioned to benefit from the tourism trends include Mantra Holdings, Flight Centre, Village Roadshow, and Sydney Airport.

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