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‘CHINESE TOURISM’: THE NEXT BEST THING FOR AUSTRALIAN BUSINESSES

It all started with a scoop of lavender ice cream. In the summer of 2008, when social media was in its infancy, visitors’ snaps of Bridestowe Lavender Estate’s exotically purple treat went viral among the Chinese community. The Tasmanian farm’s new owner, Robert Ravens, saw an opportunity to maximise Bridestowe’s appeal to this lucrative market. 

“We worked very creatively with a lot of Chinese travel agencies and Chinese media to reposition our product,” he says. Where once Bridestowe “was a genteel place where Yardley gathered its premium fragrance”, Ravens wanted to reposition it into something more contemporary. The momentum continued, thanks in no small part to Bobbie the Bear – a purple, lavender-stuffed teddy that made use of the farm’s excess crop. Sales skyrocketed after a Hong Kong chef was photographed with Bobbie among the flowering lavender fields. 

The Australia China Business Council forecasts that total Chinese visitor numbers to Australia will reach 3.3 million a year by 2026, triple the million Chinese tourists who came Down Under in 2016. With China forming Australia’s fastest growing inbound tourism market, insights from operators such as Ravens are invaluable to others hoping to share in this Chinese gold rush. “People are buying authenticity,” says Ravens, who has a Chinese-language version of his website but steers clear of Chinese signs at his farm. 

Chinese tourism around the world is experiencing a boom: the numbers of tourists are increasing and the types of tourism diversifying. But Australia will need a more culturally sensitive approach than the catchy advertising of old to capitalize on this emerging market.

How Chinese tourism is changing

recent Goldman Sachs report on the Chinese tourist boom finds that Chinese outbound tourism has risen from only 10 million in 2000 to over 120 million travellers in 2015. This is expected to growth to 220 million by 2025 (although this includes visits to Macau and Hong Kong).

Expenditure by tourists will grow from US$290 billion to $450 billion in 2025. At present only 4% of Chinese own a passport, predicted to grow to 12% within the next 10 years.

Chinese millennials, a young generation that is well-educated, speaks English and is highly connected through the internet, has attracted interest from the tourism industry. Chinese tourists use digital media to plan for their travel but they use different types compared to Australian tourists. Over 90% of Chinese internet users engage in social media, WeChat and SinaWeibo. Weibo, for example, is used daily by over 50 million bloggers.

Australia cashing in

Australia needs to ensure that the “tourism experience” is what Chinese people want. Some other destinations offer better deals, such as the no-visa policy that the Maldives and Fiji have introduced. Open borders encourage more travel.The tourism industry in partnership with government is busy addressing this. Tourism operators are also adjusting their experiences specifically for the Chinese market, to improve the food and dining experiences and to offer more in Mandarin and other Chinese languages.

Going further, there is the potential to attract more Chinese brands to Australia, including Chinese-owned hotel chains that offer very different experiences from traditional Western hotels, Chinese clothing brands, and entertainment experiences that are popular in China. This will improve the satisfaction of Chinese tourists.

But it’s not all a one-way street. To share the benefits of Chinese tourism it should be linked to other investment. Often Chinese visitors will holiday in Australia and on their trip, look for information about an investment property or business or perhaps investigate schools or universities as places for their children to attend.

Australia can also benefit in terms of protecting its natural environment. One of the main attractions for Chinese tourists is the clean and green environment and native animals.

Chinese visitors could be actively engaged in nature conservation activities. As Chinese travellers become more independent, Australia has opportunities to entice a proportion of them “off the beaten track” to engage with local culture and the environment as well as contributing to economic activities outside the main tourist centres.

Now is the time to plan for how the vast Chinese market can generate the greatest overall value to Australia. This could be by targeting young millennials, luxury travellers, environmental or cultural special interest markets, or any other sub-group that generates benefits beyond the sheer numbers. Planning means we can target market segments to maximise the return for Australia.

Why the shift in consumer behaviour?

This shift in behaviour most likely reflects the transition to millennials (15-35-year-olds) as they become the dominant source of incremental consumer spending; and as baby boomers retire and are therefore more likely to travel and dine out.

Despite their low-income average, China’s millennials desire international brands, lifestyle and health and wellness products; and they are willing to undertake material search costs to maximise their disposable incomes. This has contributed to strong growth of online retail within this cohort.

Social media has also facilitated the rise of ‘conspicuous leisure’, with platforms such as Facebook, Instagram and Snapchat inspiring the observation and creation of lifestyle image posts that highlight an active and adventurous lifestyle as a global citizen.

The future of Chinese consumption

Australia’s tourism, education and property sectors will continue to benefit from Chinese expenditure, a trend that we expect will last for decades to come. The continual shift in spending from baby boomers to millennials will only progress with time, as will the relentless rise of social media, thus cultivating the trend for consumer spending on non-material expenses and changing the landscape for investors globally.