Weekly Round-Up (6 June 2016)

Welcome to this week’s Weekly Round-Up, highlighting all the exciting news happening in the Chinese outbound tourism space, both within Australia and abroad. It has been a massive week, with a great new report being released by the Australia China Business Council on the effect Chinese tourism is having on the Australian economy, and the announcement by Virgin Australia of a strategic alliance with China’s largest privately owned airline, HNA Group. Let’s get into it!

Australian articles

  • Chinese tourists worth $140 billion by 2025: Commissioned by the Australia China Business Council and L.E.K. Consulting, Enter the dragon: How the China tourism boom is transforming Australia (available here) forecasts that Chinese tourism could be worth up to $140 billion to Australia by 2015, taking into account secondary transactions arising as a result of tourism – including education, goods and services, and growing Chinese investment in Australia. Read the full report here – highly recommended reading for all tourism/hospitality businesses!
  • Chinese airline giant HNA Group moves on 13pc of Virgin Australia: China’s biggest privately owned airline, HNA Group, took a placement of 13% in Virgin Australia and declared its intention of moving to nearly 20%. Virgin and HNA have also struck a partnership that will give Virgin better access to the 1.2 million ­Chinese tourists coming to Australia each year, as well as allowing direct flights to China for Virgin planes. The agreement covers code sharing, loyalty programs, lounge access and promotion of tourism and business travel. Virgin may also lease aircraft from HNA to fly to China. The strategic alliance will ­require approval from competition authorities in both Australia and China. (The Australian)
  • Chinese tourists fuel tourism resurgence: There has been a 38% increase in the Chinese visitor spend to a record high of $8.9 billion over the past year, according to figures released last week. The article quotes Cairns tourism operator Big Cat Green Island Reef Cruises who have experienced a “real spike” in Chinese tourists in the last few years. The tour company installed Wi-Fi onto its boats specifically to tap into the expectation of Chinese tourists that they will be able to instantly up-load photos of their reef adventures straight onto the Internet, and has also employed 11 Chinese speaking staff to cater to the growing numbers. (Australian Financial Review)
  • Chinese tourists unhappy with Tasmanian experience, study finds: After a huge push to encourage Chinese tourists to visit Tasmania, more than 28,000 visited the state last year but not all were happy with their experience, a study by COTRI has found. Early closing hours were cited as a chief complaint for Chinese tourists, who pack as many activities as possible into their days and will often not return to their accommodation until 8pm or later. A lack of restaurants open at that time (or even information on restaurants that might be open) meant that well-off Chinese tourists were resorting to eating cup noodles. (ABC News)
  • China tourists attracted to Tasmanian beauty: In contract to the article above, Tasmanian tourism businesses have much to be proud of, particularly given the growth of the Chinese tourist market, from about 4000 Chinese tourists a year visiting Tasmania in 2011 to 35,000 in the last 12 months. This article highlights two Australian businesses, Curringa Farms and Bridestowe Estate, who are now reaping the benefits of this growth, having worked hard on their China tourism strategies. The visit by Chinese President Xi Jinping in November 2014 was a game-changer, with Tasmania now viewed as a premium destination and popular among Chinese visitors on their second trip to Australia. (Australian Financial Review)
  • International visitors spend an average of $5000 when holidaying Down Under: Every international visitor who steps foot in Australia is worth $5000 to the country’s economy, and the figure is growing. South Australia, Victoria and New South Wales were the biggest beneficiaries of the additional $1.4 billion in sales in the first 3 months of 2016 as visitors splashed out on winery tours, trips to historical sites and monuments and beach outings. Chinese visitors tended to spend the most on food, drink and accommodation and shopping, and were also the biggest gamblers and spenders on entertainment. (Herald Sun)
  • Brand Perth: Why WA Premier Colin Barnett believes Perth is WA’s tourism selling point, not the state: Colin Barnett has indicated his focus as Tourism Minister will be to drive the development of new luxury hotels, a wider choice of food and shopping locations and world-class events at the new stadium to put Perth on the global tourism map. The report notes that nationally, international visitor spend increased 19 per cent in 2015, but dropped 4.7 per cent in WA, which attracted just 43,000 of the almost one million Chinese tourists who came to Australia. (Daily Telegraph)

International articles

  • Online Travel Booking Grows in China, But Traditional Agents Still Dominate: According to a report from the Chinese Outbound Tourism Research Institute (COTRI), 20% of the 120 million Chinese outbound travelers booked travel using an online travel agency (OTA) in 2015, a 7% increase over 2014 and the strongest indicator that booking sites continue to be more accepted throughout China. Still, 80% of Chinese travelers booked offline and used one of the more than 27,000 brick and mortar travel agents in China. The COTRI report contradicts the findings of the fourth edition of the Chinese International Travel Monitor (CITM) which was commissioned by Hotels.com and released in July 2015, which found that just 13% of Chinese outbound travelers used a physical travel agent, down from 34% the previous year. (Skift)
  • Chinese travelers want personalized service, embracing experiential: report: China’s outbound luxury travelers spend $65,000 per household on tourism per year, including $34,000 on travel shopping, according to a new study from the Hurun Research Institute and Marriott International. The report notes that China’s young luxury travelers go abroad between 3 and 4 times a year on average, primarily for leisure. While France remains the most popular destination in Europe, Japan is the preferred shopping destination given its proximity and favorable exchange rates, while Australia is the preferred leisure destination. (Luxury Daily)

Quick Stats

  • Follow-on benefits of Chinese tourists: Chinese visitors are more likely to buy Australian products and services after they return to China, with their average annual spend rising by 40% after their trip (link)
  • Strong April Chinese arrival numbers: Chinese visitors to Australia in April 2016 were up by 33% on 2015, to approximately 97,200 (link)
  • Chinese overtake Kiwis in Queensland: China has become Queensland’s largest international tourism market, overtaking the traditional market of New Zealand (link)
  • UnionPay facilities still lacking: Only approximately 50% of local merchants in Australia accept UnionPay (the most dominant payment method for Chinese). ATMs and taxis are better, with acceptance rates at 80% and 97% respectively (link)
  • Chinese not the most unhappy reviewers: Chinese tourists ranked 10th on the list of most unhappy reviewers of tours and activities, with approximately 12.3% leaving negative reviews. South Korea topped the list with 18.5% of reviews being negative (link)

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