Migration at 9-year lows; Chinese tourism boom: Commsec's Savanth Sebastian
Jonathan ChancellorFebruary 6, 2021
GUEST OBSERVER
The China tourist boom continues to pay dividends.
The number of tourists to Australia from China and Hong Kong combined is now heading towards 1.4 million in the past year – and the gap is widening on the visitors from New Zealand.
In fact 52,000 more tourists visited our shores from Greater China than compared with NZ over the past year. A remarkable change when you consider that even up to three months prior annual tourists from NZ exceeded Greater China by almost 7,000.
And with China and Hong Kong tourist numbers continuing to grow at a 21 percent plus annual rate, there are more landmark results likely to be recorded over the next year. It is even more astonishing when you consider that just over four years ago Chinese tourist numbers were around half those of New Zealand.
And with China and Hong Kong tourist numbers continuing to grow at a 21 percent plus annual rate, there are more landmark results likely to be recorded over the next year. It is even more astonishing when you consider that just over four years ago Chinese tourist numbers were around half those of New Zealand.
Clearly our number one tourist group is has shifted and the new winners from the China boom are tourist operators and retailers rather than mining companies that benefitted in the first stage of the China boom.
Tourists from mainland China is fast closing in on 1.1 million in the past year, up 23 percent over the past year. While some may fret about the slowdown in the Chinese industrial sector, the more forward-thinking analysts are focussing on the boost to Australian retailers from increased spending by Chinese consumers and the growing number of Chinese tourists.
The rebalancing continues to be taking place across the economy. No doubt the weaker Aussie dollar is helping to alleviate some of the pressures for the weaker investment story. And from the Reserve Bank’s standpoint, policymakers will continue to monitor the transition, and debate if further stimulus is necessary to support growth.
What do the figures show?
Overseas arrivals & departures
Tourist arrivals rose by 0.2 percent in May. And departures rose by 1.5 percent. Arrivals are up 11.7 percent on the year with departures up 4.5 percent.
In May, tourists from greater China (China and Hong Kong) totalled 120,700 (mainland China 100,800, Hong Kong, 19,900), ahead of New Zealand (109,900). Greater China passed NZ for the first time in September 2015.
Over the past year a record 1,133,700 tourists came to Australia from China, up 22.7 per cent over the year. Tourists from China and Hong Kong rose to a record 1,366,500 over the past year, up 21 percent over the year. Tourists from New Zealand totalled 1,314,300 visitors over the past year, but were up just 3.9 percent.
Over the past year, net permanent and long-term arrivals to Australia totalled 263,920 – the lowest level in nine years (March 2007).
What is the importance of the economic data?
The Australian Bureau of Statistics releases data on overseas arrivals and departures is produced monthly and is an indicator of the health of the tourism sector. The figures are also useful in understanding spending trends and tracking migrant numbers – an indicator with widespread implications for employment, housing and spending.
What are the implications for interest rates and investors?
Looking forward, not only will the weaker Aussie dollar should drive further tourism inflows, but it should provide an additional degree of support to the domestic tourism sector. Over time, the cheaper currency should make it more attractive to travel within Australia rather than overseas. Tourism has potential to join housing as a key driver of the Australian economy over the coming year, especially if the Aussie dollar falls further.
In-bound migration is holding at the lowest levels in nine years, meaning that there is greater scope for unemployment to fall in the short-term before businesses have to start looking abroad for suitable staff.
The Reserve Bank is likely to debate the merits of another rate cut at the August Board meeting.
Savanth Sebastian is an economist for CommSec
Jonathan Chancellor
Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.
