Published on 17/03/2017 by Punchmedia

Tourism Dollars Still Flooding in from China

The latest tourism figures show Asia's infatuation with Australia as a holiday destination shows no signs of slowing down and it is the big-spending Chinese tourists who are delivering big yields for Australian tourism operators. International visitors to Australia spent a record $39.1 billion in the year ending December 2016, an increase of 7 per cent or $2.5 billion more than the previous year. Chinese tourists spent $9.2 billion, or almost a quarter of the total tourist spend, which was an increase of 11 per cent on the previous year, according to new figures released by Tourism Research Australia (TRA) recently. Australia has been a magnet for Chinese tourists because of its vast, open spaces, with China quickly becoming the country's most important tourism market. The latest figures showed double-digit growth in tourist arrivals from six Asian markets over the past year. According to experts the depreciation of the Australian dollar has contributed to rising inbound tourist numbers because it has made Australia a more affordable tourist destination. As a result, tourism industry revenue is expected to increase by an annualised 3.0% over the five years through 2016-17, to total $119.4 billion.

International Travel Trends

The Tourism industry has benefited substantially from a strong rise in international visitors over the past five years. A decade ago, the largest sources of international arrivals for the industry were New Zealand, the United Kingdom, Japan and the United States. Over the past five years, strong growth in arrivals from Asia has occurred, particularly from China, India and Malaysia. China is now Australia's second-largest source of international visitors, after New Zealand, according to Tourism Research Australia (TRA).

Domestic Travel Trends

The industry relies heavily on domestic tourism, with domestic households and businesses accounting for more than 70% of the industry's revenue. The depreciation of the Australian dollar over the past five years has supported domestic tourism. According to Tourism Research Australia (TRA), domestic visitor nights and expenditure have risen as it has become relatively cheaper for Australian residents to travel in Australia.

Profit and Participation

Industry profit margins have fluctuated over the past five years, but have risen slightly overall as a share of revenue. Industry profit is expected to recover over the three years through 2016-17. This is due to a global oversupply of oil, which caused a sharp decline in the price of fuel in 2014-15. This has subsequently boosted profit margins for transport operators.

Technological Change

The rapid expansion and consumer acceptance of using the internet to research, book and review various tourism products, such as accommodation and tours, has reshaped the industry over the past five years. Traditional travel agencies such as Flight Centre have gradually shifted online, acquiring existing players and launching their own online brands. The general migration of many industry players towards online operations has caused wages to decline as a share of industry revenue over the past five years. Click here to check out hotel and tourism businesses for sale across Australia. * With AFR    

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Curtis is a leading expert in the business-for-sale industry, serving as a senior content creator at anybusiness.com.au.

With a career spanning over fifteen years, Curtis has accumulated extensive knowledge in the domain of business sales, acquisitions, and valuations. His deep understanding of market dynamics and his ability to translate complex industry jargon into accessible insights make him a trusted resource for entrepreneurs and business owners looking to buy or sell businesses.

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