Australia and New Zealand facing difficulties in attracting Chinese tourists

Australia and New Zealand are competing to attract more Chinese tourists to their respective countries following plunging prices for their top export products – iron ore and milk powder respectively. With Chinese outbound tourists representing a large majority of the growth, tourism recently overtook coal as the second most important “export” for Australia, and it is expected to soon overtake dairy as the top earning product for New Zealand.

Matt Bekier, the chief executive of Australian casino operator Echo Entertainment was quoted by Reuters saying that “[Chinese tourism] is going to be the next mining boom”. Indeed, Tourism Australia has projected that spending by Chinese tourists in Australia will double from A$5.7 billion in 2014, to A$13 billion in 2020. Similar developments are under way in New Zealand, where revenue from Chinese outbound tourists has grown from just 2 percent in 2011 to representing a quarter of tourism revenues in 2015.

However, many critics and industry executives are sceptical that Chinese tourism to Australia and New Zealand will be successful in saving the two economies following the recent commodities downturn. They argue that Australia and New Zealand are in a “global arms race” for Chinese tourists, and may lose out to the competition unless tourism services and transport infrastructure are improved in a way that is attractive to prospective Chinese visitors. As Mr. Bekier argues, “we’re number one in terms of where they want to go, but we’re only number 15 in terms of where they actually go”, referring to Chinese tourism to Australia.

A report by IHG/Oxford Economics agrees with that assessment, and expects that Australia will not qualify in the top 10 markets for growth in Chinese visitors the coming decade. Or in other words, Australia and New Zealand risk missing out on the “next mining boom” unless they learn to adapt their tourism products and services to the needs and demands of Chinese tourists.

COTRI China Outbound Tourism Research Institute provides expert insights into the worldwide developments of China’s outbound tourism market. As Chinese outbound tourists are travelling to a large range of destinations, our publications cover a number of different regions. Important Chinese visitor activities are analysed, and detailed insights are presented.

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Source: Reuters

Photo: Geoff Stearns, flickr