Sky’s the limit
It’s not just the mining sector that is benefiting from our blossoming relationship with China. Nick Gardner investigates the impact of the Asian Century on tourism in Australia.
Australia’s tourism industry is enjoying unprecedented visitor growth from the region, with Chinese visitor numbers up by almost 20 per cent in the past year, to 542,000. China is now the largest overseas contributor to our tourism sector, with an economic value of $3.8 billion, higher than the total value of visitors from both the UK and the US. And by 2020 it is expected that Chinese tourists will contribute between $7 billion and $9 billion a year to the local economy, but only if Australia delivers on China’s high expectations. If they are let down when they are here, negative wordof- mouth could deter a large proportion of potential tourists and allow rival destinations to increase their market share.
So far, however, so good.
“Visitor numbers have been growing steadily since Australia and New Zealand became the first two ‘Approved Destinations’ on China’s overseas travel list, and Australia is listed among the ‘must see’ destinations of China’s travelling classes,” says Leo Seaton of Tourism Australia (TA).
Visitors are spread across all age ranges but according to a 2011 report by the Department of Resources, Energy and Tourism, 31 per cent of visitors were aged between 15-29 years, and that group alone contributed 70 per cent of the total economic benefit to Australia, spending an average of $13,00 each. However, this age bracket is dominated by people visiting for education purposes, spending far longer here than typical holidaymakers.
The next age bracket – 30-44 – spent an average of just over $3000 each and, along with the 45- to 59-year-olds (spending $2590 each), represent the two segments that are most valuable for tourism purposes. It is here that TA is targeting its marketing dollars.
In its China 2020 Strategic Plan, TA identified numerous key areas which it has prioritised for targeting over the coming years to maximise the number of Asian visitors. Crucially it has focused on the need for more targeted marketing activities in China, honing in on the burgeoning middleclass and affluent couples, in addition to the lucrative business market, which TA believes it can attract to Australia for more conferences and business trips.
It has also pointed to greater airline capacity and route availability, and TA has already boasted deals with international carriers such as China Southern, Air China, China Eastern, Cathay Pacific, Qantas and, more recently, Jetstar, which have opened up more routes and expanded flight numbers between China and Australia.
This has been backed up by more marketing on the ground. “[TA] already has a presence in 13 cities but we intend to expand that to ‘secondary cities’ in coming years where we see real growth opportunities,” says Seaton. “We’ve established a network of 5000 dedicated Aussie specialist travel agents in those 13 cities all expertly trained to sell Australia to the Chinese population.”
Australia’s lagging position
But while recent visitor numbers show that this strategy is relatively successful, it is definitely not all good news and Australia has a fight on its hands to capture the growing Asian tourism market. Despite the strong increase in visitors, Australia is lagging behind the growth of other destinations.
The most recent figures show that more than one million Chinese travelled to the US, up 36 per cent on the previous year – a far bigger increase than for Australia. And while smaller numbers are travelling to the UK and Canada, those destinations are enjoying greater visitor growth, at 32 per cent and 24 per cent respectively.
This represents a big challenge for Australia. How do we continue to attract a large share of travelling Chinese against such appealing global destinations? It’s especially tough, says Tony Griffin, Senior Lecturer in Tourism Management at UTS, given that Asian visitors, and the Chinese in particular, are not great fans of beaches or the bush.
“The Chinese are quite conservative in where they will travel. It’s not a problem getting them to capital cities and iconic destinations such as the Great Barrier Reef, but a group of Chinese travel agents recently concluded that there was nothing north of Newcastle to capture the imagination because it was all beaches and national parks,” he says.
Indeed, China and India have the lowest share of visitor nights spent outside the Sydney, Melbourne, Brisbane/Gold Coast and Perth regions of the 23 source markets reported in Tourism Research Australia data. Only one night in 10 by Chinese leisure visitors and one night in eight by Indian leisure visitors is spent outside these key gateway cities.
“It seems that if you’re going to get them to national parks and nature-based activities it needs to be heavily tamed,” says Griffin. “One successful example is in the Blue Mountains – next to the National Park you have some man-made attractions with a good scenic railway and a cable car into the valley. That kind of thing works well with the Chinese.”
Griffin says better infrastructure and more coach tours around regional Australia would also help.
However, while Chinese consumers rate Australia as a highly desirable destination, the report by the Department of Tourism concedes there have been instances where “visitor expectations have not been met”. These include experiences on group travel trips and also shopping. Another common reported problem is a lack of Mandarin-speaking guides.
The Department of Resources, Energy and Tourism recently announced a plan to invest $600,000 in a ‘Welcoming Chinese Visitors’ Strategic Tourism Investment Grant, intended to fund training and support for businesses looking to improve their readiness for Chinese customers.
However, Adele Labine-Romain of the Tourism and Transport Forum , says that a key to improving the Asian/Chinese experience are more Mandarin-speaking workers who can not only welcome the guests in their own tongue but can help educate their co-workers about Chinese culture, and how to make Chinese visitors feel genuinely welcome.
“We have suggested that the working holiday visa scheme be extended to China because this would be invaluable in improving our ability to cater to the Chinese market,” says Labine-Romain. “Getting more workers of Asian backgrounds to educate our own tourism workers about Asian cultures could be a real benefit apart from their ability to make visitors from their own countries feel more at home during their stay. Australia doesn’t have a great reputation for customer service and if Asian visitors don’t feel that they have been treated well enough they will vote with their feet.”
Longer term, however, Dr David Beirman, Senior Lecturer, School of Leisure, Sport and Tourism at UTS, says that more Australians need to visit China to foster a process of “cross-pollination” which will encourage more Chinese to come to Australia. “Just like trade, tourism is a two-way street,” he says.
“It will be difficult to get the Australian Government to back this publicly because outbound tourism is already doing so well, and all governments prefer to focus on getting as many inbound tourists as possible. But the more that China and other Asian countries are exposed to Australian tourists, the more likely it is that Asian people will become more curious about visiting Australia."
“In addition, the relationships that Tourism Australia is fostering with China’s major carriers – China Southern and China Eastern – means that they will be actively promoting China to Australian tourists in order to ensure their planes that land in Australia are full on the return trip to China. And although it seems like Australians going overseas is ‘evil’ because it means money going overseas, in the long term, it will pay dividends through higher Chinese visitor numbers.”
Story by Nick Gardner