The changing face of Chinese tourism

Paul Edgar

Just as China’s rise has driven Australia’s mining boom over the past 10 years, Chinese visitors are rapidly emerging as increasingly important for Australia’s tourism industry.
 
China’s middle class is growing rapidly, and as they become richer they are becoming bolder and more adventurous in their travel decisions. As Chinese visitors become more sophisticated, there are going to be winners and losers here in Australia. SMEs who are ‘China ready’ will be among the winners, capturing the lion’s share of one of our fastest growing markets.
 
Australia is already in Chinese tourists’ sights. HSBC research of affluent Chinese has found Australia to be their third most likely travel destination, behind only France and the USA, and our largest source of visitors so far in 2014. This encouraging result supports ABS figures which show Australia has seen nearly 70 per cent growth since 2002, with the average stay of Chinese holiday makers being nine nights, with an overall average spend of $4,124 – a trend which has increased steadily in recent years, and is expected to continue.
 
While Chinese tourist numbers in Australia are swelling, we are also seeing greater diversity in the type of Chinese tourist and their type of holiday. Online travel publisher Travelzoo has found that currently only 30 per cent of Chinese tourists are independent travellers, a category which tends to spend more than package tourists, but Travelzoo expects that number to grow to 70 per cent over the next 10 years.
 
Chinese tourists were once drawn to Australia’s natural beauty, flora and fauna, but they are now increasingly likely to add a winery trip to their itinerary, becoming the second biggest group after the British to visit our vineyards. Figures from Tourism Research Australia show Chinese winery visitors rose from seven to ten per cent in the past three years, ahead of the US (nine per cent), New Zealand and Singapore (eight per cent, each). In 2012, sales of Australian wine were worth $4.4 billion – 60 per cent of that from exports. When considering these figures alongside the increasing interests of the Chinese, it’s easy to argue that demand for Australian wine extends beyond just the cellar door, presenting exciting growth and export opportunities for businesses in not just the wine, but broader food and drink sectors.
 
A broader range of ages will also choose to travel, with more retired Chinese and children going abroad for the first time. As an emerging demographic, China’s affluent pensioners are more likely to be in the 55 to 65 age group. According to Professor Doctor Wolfgang Georg Arlt, director at China Outbound Research Institute, unlike the majority of middle-aged affluent travellers, this demographic is not as time-poor and can afford to go on trips which are less frantic, last several weeks and are less driven by the question of what others may think about their trip.
 
This means Australian travel and tourism companies can no longer place all Chinese tourists in the one bucket but will have to tailor their attractions and packages accordingly. SMEs are in a nuanced position on this count; they can respond to trends quickly, but may need to concentrate on one demographic rather than trying to be all things to all Chinese tourists.
 
The Chinese market can seem daunting: the ferocious competition for market share, the costs of re-gearing and adapting to a new culture, but a number of pioneering Australian businesses have already shown that it can be done.
 
For example, Sydney Bridge Climb can be booked with a Mandarin-speaking climb leader, offering insights into the city’s connections with China while showcasing the spectacular views from atop Sydney Harbour Bridge[10]. Going one step further, the Sovereign Hill gold rush museum in Victoria became the first Australian tourist attraction to open a sales office in central Shanghai in 2012, promoting the brand directly to travel agents and wholesalers[11]. Lastly, Travelzoo has identified the opportunity to sell RMB-denominated Australian wine tour packages direct to Chinese tourists, in a bid to share in their interest of the French wine industry.
 
Australian business owners must utilise the abundance of valuable, and often free, market research available from the likes of Tourism Research, Austrade and industry trade shows, to name a few, and focus on the benefits that being a smaller player offers – namely, being adaptable and fleet-of-foot in order to attract the Chinese tourist dollar. The opportunity to identify specialist, targeted offerings for this valuable market is central to the future success of Australia’s tourism industry and these businesses’ longer term sustainability.

Paul Edgar is head of mid-market and business banking for HSBC Bank Australia

The changing face of Chinese tourism