Home' Forge : Vol 2 No 2 Contents are likely to be tourist operators
and retailers, rather than mining
companies [like those] that benefted
from the frst stage of the boom.’
Sebastian added: 'While some
may fret about the slowdown in
the Chinese industrial sector, the
more forward-thinking analysts are
focusing on the boost to Australian
retailers from increased spending by
Chinese tourists, and the growing
number of Chinese tourists'.
CommSec believes that the lower
Australian dollar will drive stronger
tourism infows to Australia, and
support our tourism industry. 'Over
time, the cheaper currency should
make it more attractive to travel
within Australia than overseas,'
wrote Sebastian. 'Tourism has the
potential to join housing as a key
driver of the Australian economy
over the coming year -- especially if
the Aussie dollar falls further.'
It's not just China. Demand from
other Asian nations for our tourism
is rapidly rising. Tourism Australia
data shows that visitor numbers
from the Philippines and Vietnam
rose 20 per cent and 21 per cent
respectively in the year to March
2016, albeit off a lower base.
South Korean and Taiwanese arrivals
were up by approximately 16 per
cent over that period, and visitors
from India -- a sleeping giant for
Australia's tourism industry -- rose
eight per cent over the year. Look
through the arrival data by country,
and Asia is dominating growth
in international tourist arrivals.
European arrivals, for example, were
up by only three per cent.
This growth is equating to billions
of dollars for tourism operators
and retailers. Tourism Research
Australia data shows that about 6.9
million adult international visitors
stayed in Australia for a combined
248 million nights in 2015, spending
$36.6 billion. That total spend rose
18 per cent -- or more than $6 billion
-- compared to the spend in 2014,
which was the highest percentage
gain since 2001.
Predictably, Chinese tourists were
the big spenders, shelling out
$8.3 billion on their Australian
holidays in 2015 -- a whopping
45 per cent increase on the previous
year. Indian tourists spent an extra
38 per cent during their trips, or
$1.1 billion in total in 2015.
Victoria was the largest winner
by state, increasing international
arrivals by 14 per cent and benefting
from a 30 per cent jump in spending
to $6.5 billion in 2015. Queensland
and New South Wales enjoyed a 19
per cent increase in international
visitor spending in 2015.
From almost every angle, this is
extraordinary growth for Australian
tourism, and is a much-needed
boost for our economy. The tourism
industry generates $122 billion in
revenue and employs more than
half a million people, according to
business forecaster IBISWorld.
Our economy desperately needs
other sectors, such as tourism,
education and housing, to pick up
the slack as the mining investment
boom fades. Although mining
creates more revenue ($186 billion)
than tourism, the latter employs
more than three times as many
people and creates a livelihood for
almost 10 times as many businesses
-- most of them small.
Tourism's big tailwinds show no
signs of slowing in the short term
(three years). A lower Australian
dollar makes our tourism industry
more competitive for international
visitors, and encourages locals
to travel domestically because
our dollar buys less offshore. The
Australian dollar is likely to fall
further as interest rates are cut once,
possibly twice, before year 's end.
Falling ticket prices and intense
competition among discount
airlines are also fuelling the tourism
boom. Lower oil prices are good
news for airline ticket prices and
profts (witness Qantas Airways’
rising share price). It's never been
cheaper or more convenient for
Asian visitors to fy to Australia, or
vice versa, on discount airlines.
In the medium term (three to fve
years), expected stronger growth in
Indian tourist numbers should add
new impetus to the tourism boom.
Although visitations are growing
quickly, the number of Indian
tourists to Australia was about one-
third of those from the United States
and the United Kingdom, and less
than those from Japan, Singapore,
Malaysia and South Korea.
That gap should close rapidly as
India's economy grows and its
middle class expands. Led by a
pro-business government, India's
investment boom is expected to
quicken in this decade and, in time,
morph into a consumption boom
similar to China's likely transition.
Longer term, the coming boom in
middle-class consumption in Asia
will take Australian tourism to new
heights. The OECD expects a global
middle class of 4.9 billion by 2030, up
from 1.8 billion in 2009. Two-thirds of
the new middle class will be Asian.
Potentially, that means billions of
middle-class consumers on Australia's
doorstep, many with enough
purchasing power to travel overseas.
The tourism boom could exceed
expectation. Chinese tourists, for
example, rank Australia highly as
38 // FEATURE
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