Chinese tourists in Australia: Will they ever return in their pre-COVID 19 numbers or will tourist operators be left distraught?

Nick Sundich Nick Sundich, June 30, 2023

Chinese tourists in Australia were important to Australia’s economy pre-pandemic. Spending peaked at $12.4bn annually.

Six months since China re-opened, it was hoped that they would return to Australia en-masse. But this hasn’t happened and there are doubts that it ever will happen.

 

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Chinese tourists in Australia are fraction of pre-pandemic levels

To be fair, almost all inbound tourism markets are down from pre-pandemic levels – with some exemptions such as India.

But Chinese tourists are particularly staying away from Australia. According to the Australian Bureau of Statistics, there were 124,000 Chinese tourists in March 2019. n March 2023, this was just 26,800.

And this is actually lower than February 2023, the month of the Lunar New Year that is a typically busy month.

This is not because Chinese people aren’t travelling at all. Instead, they are travelling to places closer to home such as Thailand and Bali.

 

Why aren’t Chinese tourists returning to Australia?

There are several reasons why including:

  • The high costs of flights to Australia
  • The hangover of 2 years of frosted tensions between Australia
  • The fact that Australia needs visas for Chinese tourists while competing tourism markets in the region do not
  • Australia still being excluded from a list of countries that the Chinese government has approved for the resumption of group tours.
  • Weak consumer sentiment in China, thereby incentivising tourists to go to cheaper markets.

 

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Will Chinese tourist numbers recover to pre-pandemic levels and if so when?

Tourism Australia has predicted that this will happen by 2026. But this is only a prediction for now.

You have to sell hope, we guess. Although other key tourism markets are closer to pre-pandemic levels (such as New Zealand, the USA, Japan and South Korea), plus Indian tourism has re-bounded past pre-pandemic levels, they cannot replace China.

Not just because of China’s population and because they like to travel, but also because they were big spenders in Australia.

According to data from ANZ Bank, the average tourist in China would spend A$9,300 per trip pre-pandemic. The average Indian tourist would only spend A$4,800.

So as ANZ noted,’ The sector needs almost twice as many visitors from India than from China to make the same revenue’.

 

Which stocks could benefit from the return to Chinese tourists?

The most obvious answer is daigou shops because few other companies have been hit as hard by the absence of Chinese tourists than they have.

AuMake (ASX:AUK) and Innlanz (ASX:INL), engage in commerce with Chinese consumers, including through retail stores in Australian CBDs that cater to Chinese tourists.

These stores have been operating throughout the pandemic, but the business has always been waiting for Chinese students and tourists to return.

Tourism businesses like airlines and travel agents may benefit, but it will depend on what extent Chinese tourists go with them rather than their home grown peers.

 

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