Wednesday, 15 November 2017

China is vital to tourism strategy

Australia’s tourism sector is full of optimism and opportunity – for good reason. It is growing three times faster than the economy each year, employs about 1 million people and makes up 3.2 per cent of the economy.

Call us

1300 300 437

Open Monday to Friday 9am-5pm (AEST)

It also supports other industries, with about 87¢ of every $1 an international visitor spends going into other parts of the economy, such as agribusiness and transport.

The main focus for the peak tourism body, Tourism Australia, is now Asia. This is a change from previously targeting America and Europe with such memorable campaigns as Paul Hogan’s “throw another shrimp on the barbie” television advertisement from the 1980s.

“Australia is becoming a destination for visitors from Asia, who now make up 47 per cent of international visitors,” John O’Sullivan, the Managing Director of Tourism Australia, told the HSBC Australia–China Conference in Sydney in November. That figure marks an increase from about 37 per cent in 2009.

Arrivals from Greater China have overtaken those from New Zealand as Australia’s largest source of offshore visitors. “The most important market now is China,” Mr O’Sullivan said.

This year the Chinese Government endorsed Australia as a tourist destination by naming 2017 the year of Australia–China Tourism, which has given Chinese travellers a sense of security. They now account for one in eight tourists and contribute an even greater proportion on a dollar basis. Figures from Austrade’s International Visitor Survey1 show that in the 12 months to June 2017, Chinese tourists spent $9.8 billion, an average of $8,400 a head, while New Zealanders spent only $2,100 each and US visitors $5,300 each.

ABS figures released in September 2017 put annual growth in visitor numbers from China at 12 per cent, and this is set to grow with the increasing appetite for overseas travel.

“A driver of this growth is the rapid increase in urbanisation, with more than 57 per cent of China’s population now living in cities, up from 36 per cent in 2000,” HSBC Australia Chief Executive Martin Tricaud told the conference. “As the economy develops, middle-class incomes rise and there is more demand for high-end services such as tourism. Between 60 and 80 per cent of the population will be middle class by 2025.”

Like many things in China, the scale of the travelling public is huge. While a seemingly small proportion – just 5 per cent – of the population currently has a passport, this equates to

135 million overseas travellers in 2016, which was more than three times as many as a decade earlier, and a larger number than Japan’s entire population.

“Estimates by HSBC’s consumer equities team suggest that if China follows a similar path to Japan and Korea, Chinese departure numbers may rise to more than 250 million by 2026,” Paul Bloxham, HSBC Chief Economist, Australia, New Zealand and global commodities, says in his Riding Asia’s Tailwind report.

The most popular destinations for Chinese nationals are Hong Kong, Taiwan and Macau, where they don’t need a passport. They account for more than 70 million visitors each year. However, this means that without taking into account any growth, there are still about 50 million potential long-haul travellers for Tourism Australia to target. There is still some way to go, however, with 1.3 million tourists arriving from mainland China in the 12 months to June 2017, up from 350,000 in 2008–09.

“Tourism Australia has been marketing in China since 1999, and was one of the first national tourism organisations to do so,” Mr O’Sullivan told the conference. “Australia’s natural beauty, our great food and wine, and our friendly and open people are some of the biggest advantages we have in selling to the Chinese market as they are important considerations for Chinese travellers.”

Chinese tourists are big users of social media, with 84 per cent sharing their experiences on social media. “Three in five will decide on their destination based on advice from friends and family,” Mr O’Sullivan said. “That’s how destinations can really get ahead – by tapping into the trust and authenticity that communities provide.”

Tourism Australia is focusing on WeChat, Weibo and its partnerships with Tencent and Alibaba to get its messages out. “In 2000, just 1.7 per cent of the population of mainland China were online – now there are more than 730 million internet users, or more than 53 per cent of the population, and 95 per cent are online through their phones,” Mr Tricaud said.

Aviation is another essential ingredient in the mix. Australia is now directly connected to about 17 cities in mainland China, which is helping consumers get over the perception that Australia is a long way away. The quality of Chinese airlines has also improved to the point where they now rival some of the best in the world.

Tourism Australia developed a long-term strategy with government and industry that aimed to contribute between $115 billion and $140 billion to the economy by 2020. Current indications are that the strategy is on track to achieve around $130 billion, bolstered by increasing arrivals from China. “China is Australia’s number one market in terms of expenditure for Tourism Australia,” Mr O’Sulllivan said. “It’s a very important part of the tourism story.”

You are leaving the HSBC CMB website.

Please be aware that the external site policies will differ from our website terms and conditions and privacy policy. The next site will open in a new browser window or tab.

You are leaving the HSBC CMB website.

Please be aware that the external site policies will differ from our website terms and conditions and privacy policy. The next site will open in a new browser window or tab.