6 stocks to play the tourism boom with

Financial journalist and commentator on 3AW and Sky Business
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Australia is in the middle of a tourism boom, particularly on the inbound side. According to the Australian Bureau of Statistics (ABS), tourist arrivals rose by 4% in December. While 4% does not sound like a boom, it’s the composition of the figure that shows why the Australian tourism industry is celebrating.

Changing market

Almost 9 million tourists came to Australia in 2017, led by a record 1,382,800 tourists coming from China, a number that rose by 13.3%. China is now the largest source of tourists to Australia, ahead of New Zealand. Visitors from New Zealand totalled 1,355,300 over the past year, but that number increased by just 1.3%. The booming Chinese middle-class has discovered Australia in a big way, and it has money to spend: according to the Tourism & Transport Forum Australia, not only are the Chinese Australia’s biggest source market, they are “far and away the highest spending” of all nationalities visiting Australia, spending $10 billion here a year. Tourists from China spend, on average, more than tourists from any other nation when they holiday in Australia.

And what’s exciting Australian tourism circles even more is that the other potential elephant for Australian tourism, the burgeoning Indian middle class, is just starting to be seen in meaningful numbers. The ABS says tourists from India totalled 302,900 visitors over the past year – up 16.5% on the year, and a record high. As broker CommSec puts it: “China’s and India’s growing and more affluent middle class are attracted to Australia’s clean and unique environment, high-quality restaurants and hotels, fresh food, safe cities, museums, art galleries and warm weather.”

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