More pain for regional hotels as Chinese tourists prefer city over country: RBA

Regional hotel operators must find ways of enticing Chinese visitors to coast and country resorts or risk another decade of struggle, according to the RBA’s December quarter bulletin.

The RBA forecasts that growth in Chinese visitors alone is expected to contribute about one-third of the growth in Australia’s tourism export earnings until 2020.

Between 2001 and 2011, Chinese visitor numbers have grown by 13.4% annually, contributing 16.4% to annual revenue while Indian arrivals have increased by 12.3% annually, contributing 7.7% to tourism revenue. In comparison, visitors numbers from the US and UK have not grown over the last decade.

According to the Tourism Forecasting Committee, the share of spending by international visitors in total tourism expenditure in Australia is forecast to continue to rise over the next decade, driven principally by strong arrivals from Asia.

“This poses a challenge for the tourism industry in leisure and regional areas, which have at least to date had limited exposure to the growing segments of the inbound tourism market compared with Australia’s capital cities,” says the RBA.

According to the central bank, overseas visitors prefer to stay in capital cities (and capital city hotels) due “the importance of capital cities as major international gateways to Australia”. 

“Capital cities have benefited from a rising share of overseas visitor expenditure as spending by international visitors in regional areas has declined somewhat in recent years in real terms.” 

“This trend is consistent with the strong growth in Chinese visitors – who demonstrate a strong propensity for travel to capital cities – and the decline in Japanese tourists that has had a more pronounced effect on overall tourism demand in some regional destinations.

“For instance, in 2010-11, Sydney and Melbourne were the most popular destinations for Chinese visitors (as measured by visitor nights), whereas Japanese visitors have demonstrated a relatively stronger preference for travel to Queensland’s beach destinations, notably the Gold Coast and Tropical North Queensland (TNQ),” says the RBA. 

According to the August Midwood Report, Queensland regional and leisure areas heavily dependent on overseas tourists suffered big drops in revenue when comparing the March quarter of 2011 with the March quarter of 2010.

Accommodation takings for Whitsunday Island resorts were down 16% compared with the same time last year, while takings on Great Barrier Reef islands and adjacent mainland areas (including the likes of Port Douglas) were down 21% over this time frame.

 

 

 

 

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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