Australia poised to benefit from Chinese tourism boom: CLSA

Australia received more than 1 million Chinese visitors in the 12 months ended November 30. Photo: Simon O’Dwyer Chinese travellers are poised to look beyond nearby destinations such as Hong Kong and Macau as income levels rise and they widen their horizons, leading to a boom in arrivals to Australia.

A new report by broker CLSA found Sydney Airport, Treasury Wine Estates and shopping centre operator Scentre Group could prove to be among the biggest corporate beneficiaries from the growth in inbound tourism and has buy recommendations on all three companies as a result.

CLSA forecasts Chinese tourist visitors to Australasia will increase by an average of 22 per cent a year between 2014 and 2020 – the highest growth rate of any region in the world – after having risen by 19 per cent a year between 2009 and 2014.

In contrast, the most popular outbound Chinese destinations, Hong Kong and Macau, are poised to grow a compound annual rate of just 2 per cent and 4 per cent in the years to 2020.

“As people become more experienced and wealthier, they will travel further afield,” Hong Kong-based CLSA regional head of consumer and gaming research Aaron Fischer said. “Income growth is still positive in China. As people earn more money they are looking to allocate more of their income and wealth to tourism and travel. Even if there is a slight slowdown in GDP growth, we don’t see outbound tourism slowing at all.”

He said apart from income growth, the widespread use of social media in China was also helping to fuel demand for travel as tourists aimed to brag about travelling overseas to their friends and families back home.

CLSA forecast the number of Chinese outbound trips is expected to rise to 200 million by 2020. That compares with last year’s figure of 125 million trips, of which 58 million were to Hong Kong or Macau. Fight for Chinese wealth

“We have seen a huge increase in the number of outbound trips over the past 10 years,” Mr Fischer said. “Countries around Asia and the world are fighting hard for the Chinese wealth. Many countries are making it easier for Chinese to travel to their country.”

By 2020, CLSA expects 3.6 million Chinese visitors to Australasia, more than double last year’s figure of 1.37 million. Chinese tourists are already the most lucrative visitors to Australia, spending $7.7 billion a year.

CLSA’s most recent annual survey of Chinese travellers found Australia ranked ninth as a preferred destination behind countries such as South Korea, Japan and Thailand, but that jumped to fourth if money was no object, behind only the United States, France and the Maldives.

“Australia ranks as a top four destination if money is no object,” CLSA head of Australia research Scott Ryall said. “Not only does this bode well for attracting high-end Chinese tourists, but it is important given increasing aspirations of Chinese tourists. Just as well, given we are a high-cost destination!”

Mr Fischer said Australia scored well among Chinese travellers interested in relaxation and nature, but it was not a top-ranking country for shopping and culture, even though Chinese are big spenders locally on duty free goods and other retail items relative to other tourists. Mr Fischer said the weaker Australian dollar was further increasing spending by Chinese visitors.

Australia, importantly, is also perceived as a safe place to visit. CLSA’s survey found is ranked as the No. 1 consideration for Chinese tourists.

“We expect Australia to fare well in such considerations,” Mr Ryall said. “The sophistication of travellers’ needs also continues to evolve, with relaxation and widening horizons continuing to be cited most regularly as the happiest moments during travel. Both present opportunities for Australian tourism.”

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