28 Aug 2019

Tags

• Edmund Tang

• Australian Economy
• Tourists

Tourism is now Australia’s largest services export. According to data released by Tourism Research Australia in May 2019, tourism contributed A$37.4 billion to the Australian economy in 2017–18. This makes tourism Australia’s third most-valuable export after iron ore (A$61 billion) and coal (A$60 billion).

With arrivals in the year to June 2019 up 3%, the tourism industry’s top ranking in Australia’s services exports looks secure. There were 9.4 million short-term international visitor arrivals into Australia last year (meaning stays of less than one year). What’s more, Australia’s most lucrative tourist markets are all growing well, according to the Australian Bureau of Statistics (see chart below).

The rise of Chinese tourism

Of Australia’s top ten tourism markets, eight are in the Asia-Pacific region. In total, the region contributed 5.2 million sightseers to Australia in the twelve months to June 2019. The number of inbound travellers from these eight markets rose by 3% – or 147,000 – over the same period in 2018, and accounted for over 55% of total overseas tourist arrivals in Australia.

China was the largest growth market. With short-term arrivals in Australia of 1.5 million up to June 2019, China overtook New Zealand, which contributed 1.4 million. The pace of change has been dramatic: ten years ago, the annual total of Chinese travellers in Australia was just 353,000. Chinese arrivals have grown by over one million or at a compound growth rate (CAGR) of 15% a year since 2009.

Australia’s traditional markets have improved in recent years, however. Tourist arrivals from New Zealand, the United States and the United Kingdom – which contribute about one third of Australia’s total arrivals – increased by a CAGR of 3.8% a year from 2014 to 2019. This compared favourably with an average rate of 1.7% a year from 2009 to 2014.

In absolute terms, Australia’s inbound tourist numbers from these three markets surged by more than half a million to almost three million from 2014 to 2019 – well above the increase of about 194,000 from 2009 to 2014.

A strategic export industry

The sheer scale of Australian tourism means its health is strategically important. Considered as an export industry, we are fortunate: it is well balanced in the sense that growth is spread across old and new markets.

But Australia’s tourist industry also faces challenges. With China now in top spot, should the tourism industry invest in a better understanding of what constitutes a great visitor experience from the Chinese perspective?