Monday, October 8, 2012

Chinese Big Spenders!?

The Cairns Post has gone into a hyperventilating countdown to the arrival of direct flights from China: Countdown hits 23 days until direct flights arrive from China to Cairns.

Most interesting were the comments on Chinese visitor expenditure related to the latest regional snapshot from TQ:
Despite the decreases in visitor numbers overall, expenditure increased in the Far North because of the higher-spending Chinese visitors.
Tourism Tropical North Queensland chief Rob Giason believes expenditure will grow further as the Chinese market spend longer stays in the region.
"As the market matures, the number of nights they spend here will go up and that means they’re eating out more, staying longer in hotels, and taking more tours," Mr Giason said.
"The expenditure of Chinese visitors seems to be far better than the perceptions, and direct flights mean we’ll have many opportunities to see that expenditure increase further."
The snapshot doesn't appear to have any actual numbers, or a reference, to higher-spending by Chinese visitors. However a quick search shows similar recent reports from the USA:
 The US Department of Commerce reported Chinese tourists spend an average of USD 5,271 per capita, the USA’s highest spending visitors.
That seems to mean the average Chinese visitor to the USA is spending about the equivalent of annual Chinese GDP per capita in USD ($5,445) based on recent World Bank data? The equivalent spending by each Australian visitor to the USA would be about $60,000 USD.

GDP rather than incomes may not be the most appropriate benchmark but was the most easily available.  Chinese GDP and income per capita are still well below those of the advanced economies. This data and commentary also appears incongruent with comments previously from Fred Ariel that the Chinese were profit-less volume compared to the "hi yield" Europeans?

My guess is that this expenditure reflects the huge Chinese population and that those able to afford international travel are more likely to be from the most affluent demographics than visitors from other countries. Chinese travellers still represent a much smaller proportion of their population than those other countries. Perhaps that expenditure will revert towards the mean with increasing tourism from the growing Chinese middle class?

Also interesting in that most recent tourism regional snapshot is the huge rise in VFR (visiting friends or relatives) in the past year, up 40%. However this follows a fall of 36% in the previous corresponding year to June 30, 2011. A consequence mostly of last years cyclones and floods I presume, but a fair slice of annual visitors with a significant economic impact.

Update: The International Visitor Survey  from Tourism Australia includes expenditre data which also indicates high spending by Chinese. This seems to mostly reflect longer stays for education but will leave that for another post.


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