Tourism to Australia is hitting record highs, especially from China

Photo by Christian Keenan/Getty Images

Tourism in Australia is booming.

According to the Australian Bureau of Statistics, 693,200 short-term visitors arrived in June, the largest one-month total on record. It was 79,400 more than in June 2015, an increase of 12.9%.

It took the total number of short term arrivals over the past year to 7.8386 million, a record high, and in percentage terms, the fastest annual growth rate since March 2005.

The chart below tells the story. Visitor arrivals are not only setting new records, the numbers are growing rapidly.

While there are a number of factors that explain the boom — the lower Australian dollar being one — it’s clear the vast majority of the increase is coming from one nation in particular: China. 125,100 Chinese, including from Hong Kong, arrived in June, eclipsing January’s previous record of 122,300 and 21.9% higher than 12 months ago.

Over the year, 1.389 million Chinese visitors graced Australia’s shores, well ahead of second-placed New Zealand with 1.322 million.

To put the growth in Chinese arrivals into perspective, the number over the past year was 112% higher than in the 12 months to June 2011, just five years ago.

Compared to a decade ago, that increase swells to 211%. Going back two decades, Chinese arrivals have grown by 590%.

That’s 1.188 million more Chinese over the past year compared to June 1996, a truly amazing increase.

After another disappointing rise in Australian retail sales in June, Gareth Aird, senior economist at the Commonwealth Bank, suggests the performance over the past year would have been even more underwhelming had it not been for the influx of Chinese tourists.

“Growth in the number of tourists from China is particularly welcome given that tourists from the world’s most populous nation spend more per head than tourists from any other nation when holidaying in Australia,” notes Aird.

“A material chunk of that expenditure is in the retail space.”

Based off the trend seen over the past two decades, that chunk looks set to get even bigger.

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