Tuesday, August 12, 2014

Can Chinese tourists fill the mining hole?

A post at Macrobusiness who are sceptical: Can Chinese tourists save Australia?

A good read with some themes previously covered here also on exchange rates and tourism deficits, and which refers to a probably paywalled post at BusinessSpectator The Australian by Alan Kohler:
More importantly, Chinese tourists stay the longest and spend by far the most: $5.1 billion in the year to March, according to Tourism Australia data, or $7343 each — double what the Kiwis spend…
That is possibly correct but perhaps not relevant to future trends. When I looked at this previously, not just here but in the U.S.A,  the Chinese longer stay and spend was skewed by education, family travel, and perhaps less reputable sources. As they say in investment projections past performance should not be assumed as an indicator of future performance. As growth in Chinese tourism moves to the middle class expect this perhaps to revert towards the mean?

2 comments:

  1. There is huge misunderstanding about China and the growth that they're seeing - and the sustainability of this growth. The average wage in the big cities is only $8100. With so much of Chinese living expenses still in the planned Communist economy (housing, food, electricity, etc) their disposable income in a quantum less than that of unplanned economies. We're still not attracting the Chinese middle class - the vast majority of visitors to Australia are upper income entrepreneurs and those working "outside" the main Chinese economy (foreign companies).

    It is absurd to think that the Chinese economy will produce the kinds of tourist numbers that a project like Aquis will need to survive.

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  2. I think the Aquis assumptions are 3-4 nights average stay? Although the average Australian stay for any visitor at Aquis can only be longer than that. Assumptions can only be based on visitors being skewed well above the average Chinese while progressively reverting to the mean over time. I think.

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