Australia is tipped to receive a larger share of the $9.2 billion tourism industry surrounding China’s seven day national holiday “golden week”, due to the rising political tensions on the Korean peninsula.
The week starts on 1 October, with approximately 700 million Chinese nationals flying overseas during the eight day “golden week”.
Gary Sue Fong, director of bespoke investor advisory group iProsperity, said golden week in 2017 is expected to smash previous years’ records, and predicts Australia’s hotel sector will be pushed to the brink over the eight-day holiday break.
“Currently, Australia’s hotel occupancy rates are ranked among the highest in the world, with the hotel occupancy rates averaging 78 per cent across Australia throughout 2016,” he said.
“To keep up with ongoing demand, the domestic hotel sector needs to grow by a third to capitalise on the lucrative Chinese tourist market.
“The majority of Chinese tourists cite safety and security as the number one consideration when selecting a Golden Week destination.
“We’re witnessing strong demand across the country’s major leisure destinations,” he said.
According to ABS data, Australia saw a four-fold increase in the number of golden week tourists in the past decade.
Over the same period, Chinese tourists’ annual total expenditure surged 700 per cent, to $1.4 billion.
Chinese travel agency Ctrip forecasted a 70 per cent fall in the number of Chinese tourists to South Korea during Golden Week this year, as rising tensions on the Korean peninsula deter China’s six million travellers from popular destinations in South Korea and Japan.
Ctrip data also revealed 80 per cent of people using its platform opt for four and five star services when travelling abroad.
Fong said wealthy Chinese travellers are seeking luxury experiences in Australia, and that includes holiday accommodation.
“Supply is struggling to keep up with demand across Australia,” he said.
“Hotels in Cairns and Port Douglas, in particular, lead in terms of revenue growth, while the second strongest market, Sydney, is expecting double-digit revenue growth this year.”
In this financial year, there were currently 101,196 rooms across Australia’s major cities, with a 78.6 per cent occupancy rate.
According to the 2017 Dransfield Hotel Futures Report, this is forecasted to grow by 33 per cent, adding 33,303 new hotel rooms to the supply in Australia by 2025 to meet demand with a 81.6 per cent occupancy rate, and 4.4 per cent increase in RevPAR, $142.53 to $203.78.