2014 and china/not 1980's and japan

"Chinese tourists, lured by beaches and theme parks, are also buying real estate."

The Australian
February 21, 2014

"Nicholas Liu came to the Gold Coast just over a decade ago from Beijing when Chinese tourism to Australia was in its early days. He liked the area so much he decided to stay and three years ago set up his own company, Australian Premium Holidays."

Now with China’s rising wealth, the falling Australian dollar and increasing number of flights from China to Queensland, he is riding the boom in tourists from his homeland.

China is now the most lucrative source of foreign tourist revenue for Australia, bringing in $4.5 billion in the year to last March. And the Gold Coast with its combination of sun, sandy beaches, theme parks, wildlife, good food and relaxed culture, and a handy casino, is one of the fastest-growing destinations in the country.

In the 12 months to the end of September, the number of tourists from China to the Gold Coast jumped by more than 36 per cent to more than 202,000 - double the growth rate for the whole of Australia, according to figures supplied by Tourism Research Australia.

Chinese tourists are now the largest single source of overseas visitors to the Gold Coast, Australia’s sixth-largest city, their increasing interest helping to turn around the region’s tourism business. The rapid growth saw total visitors from mainland China to the region bypass those from New Zealand, which now supplies 181,000 tourists a year, and easily outstrip the falling market from Japan of only 56,000 a year. The increase in numbers translated into an extra 195,000 visitor nights over the year from China alone.

“The market has become stronger because most Chinese clients are willing to go overseas for travel,” says Liu, who worked in the travel industry in China for a decade before moving to Australia in 2003 with a Chinese travel agent.

“Australia is a really popular destination for the Chinese market due to its Western culture, and Barrier Reef, some unique animals and the [Sydney] Opera House. They love the Gold Coast as most of the tourists live in the hinterland of China and they love the ocean and the beach. The Gold Coast has lovely beaches, good weather, friendly local people and it is suitable for Chinese visitors.”

A combination of a marketing push and increased flights by airlines such as Malaysia-based AirAsia X, Singapore-based Scoot to the Gold Coast and China Southern Airlines into Brisbane has helped boost the numbers.

“We’re on a roll now,” says Martin Winter, chief executive of Gold Coast Tourism. “It was pretty rough when the GFC hit domestic tourism, then the strong Aussie dollar hit our international business and we had severe weather events in our peak summer seasons in 2011 and 2012. But in the past two years, we’ve turned the business around and our overall international visitor arrivals and international visitor spend are both up 9 per cent in 2013.”

With visitors from China now more than four times the number who were coming in 2003, when Liu moved to Australia, Gold Coast Tourism is prioritising its international marketing activities to focus on China and Southeast Asia. The organisation set up its own office in Shanghai in 2009 and operates throughout China, leveraging the efforts of Tourism Australia and Tourism Queensland.

The VisitGoldCoast China page on Weibo (a hybrid Facebook/Twitter site) has attracted well over half a million “Gold Coast followers” in just over six months. In June, more than 300 of China’s top travel agents who specialise in selling Australia will converge on the Gold Coast for the first “Corroboree Greater China”, hosted by Tourism Australia.

“The beautiful Gold Coast ticks all the boxes for what Chinese visitors are looking for in an Australian holiday,” says Queensland’s Minister for Tourism, Major Events, Small Business and the Commonwealth Games, Jann Stuckey. She described the Corroboree as a “tremendous forum for tourism businesses to build relationships with Chinese travel agents and convert the growing demand for our tourism experiences into bookings.”

The Gold Coast is also benefiting from the move by Guangzhou-based China Southern Airlines to introduce daily flights to Brisbane from last November. The airline, one of the largest in the world, began flying into Brisbane in November 2010 with a service of three times a week.

“We see great potential for the Gold Coast from our additional services using new Airbus A330-200s,” says the airline’s regional general manager Australia/New Zealand, Henry He.

“Although we fly into Brisbane, a very large percentage of our passengers will be on tours featuring the [Gold] Coast. We expect to carry more than 59,000 Chinese tourists into Brisbane this year. These will be not only from Guangdong Province, but from our feeder network covering 150 cities in China. The potential is enormous,” says He.

The Gold Coast also received several charter flights during the all-important Chinese New Year holiday period last month and earlier this month, mainly out of southern China.

Winter points out that the increase in tourism from Asia is broader than just China. “We’ve enjoyed double-digit growth from most Asian markets over the past couple of years, especially since AirAsia X started flying from Kuala Lumpur into the Gold Coast Airport in November 2007 and Scoot, a Singapore Airlines-backed carrier commenced flights over a year ago.”

AirAsia X’s head of international marketing, Stuart Myerscough, says the airline has carried more than 300,000 Asian visitors to the Gold Coast since it started, contributing more than

$800 million to the city’s economy. The Malaysia-based airline is also another source of visitors from mainland China, and these numbers are expected to increase. “China is home to a burgeoning middle class who are hungry for travel and our Fly-Thru service makes it easy for Chinese and other Asian visitors to access the Gold Coast via KL,” says Myerscough. “Currently we serve 12 cities in China plus Hong Kong and Macau and we are looking to expand our network further into China.”

AirAsia X has marketing teams in China who work with Tourism Queensland and Gold Coast Tourism to promote the city, using print and digital media, including Weibo. Similar marketing strategies are being implemented by Scoot, whose feeder network into Singapore includes four Chinese cities as well as Thailand, Taiwan, South Korea and Japan.

Chief executive of Scoot, New Zealand-born Campbell Wilson, says the Singapore-based low-cost airline carried close to 49,000 international visitors to Australia in its first year of operation. While more than 70 per cent were Singaporeans, he says “the potential is clearly there to carry more tourists feeding through from our network, especially in China, as it expands”.

The former Singapore Airlines executive estimated that Scoot contributed more than $100m to Queensland in visitor expenditure in its first year of operation, a figure expected to increase given the airline’s decision to boost flight frequency into Coolangatta from five to six a week over the summer peak season.

The Gold Coast, which once wooed exchange-rate-rich Japanese tourists, has also adapted to the new source of supply. Nicholas Liu says much has changed since he first visited the area back in 1998, when he saw no Chinese signs. “Now you can see Chinese signs everywhere - in the airports and the restaurants and the theme parks. It is very helpful for Chinese tourists,” he says.

His business relies on relationships with more than 20 wholesale agents in China but he sees potential for more online sales to individual travellers, families and investors, who will like what they see, particularly the Gold Coast lifestyle. In his view, “there’s a need to offer better tour products and better service to meet the needs and expectations of a rising and more affluent middle class ... Chinese people will become more demanding as the market matures from group travel to FIT [foreign individual travel].”

He believes this trend to the FIT market - individuals including families, who typically stay longer and spend more than groups - has the potential to generate all-important word-of-mouth recommendations among the increasingly affluent and adventurous Chinese.

But is the Gold Coast up to the challenge? Will it meet these expectations sufficiently to have the desired long-term effect? Or, after a few bountiful years, will the Chinese move on to other, sexier destinations, leaving tour operators such as Liu with an unsustainable business model? Questions have been asked whether the Gold Coast Airport will be adequate to handle the expected increase in traffic. Currently there is a small Customs, immigration and quarantine area, but this would need to be expanded if there were a substantial increase in overseas arrivals. However, the main problem is the lack of an instrument landing system that would allow all-weather operations at Australia’s sixth-largest airport in passenger traffic. At the moment, some incoming flights have to be diverted to Brisbane in bad weather, causing enormous disruption. Other shortcomings are the absence of air bridges or even covered stairways. These are now basic facilities in regional airports around Asia, and tourists arriving in Australia for the first time may find a welcome in the pouring rain less than impressive.

Chief executive of the Gold Coast Airport Paul Donovan says the airport is exploring its options to expand the international arrival and departure areas, with the aim of having the project complete and operational in readiness for the 2018 Commonwealth Games.

Donovan says the airport has employed three Chinese liaison officers who speak fluent Mandarin and have an understanding of Cantonese to assist visitors from China.

“These staff members help passengers with interpreting questions from immigration, Customs and quarantine staff and explain the Tourist Refund Scheme rules to departing international passengers,” he says. “They also provide information on transport options, tourist attractions and assist tour leaders and airline staff at check-in.”

As well as recreational tourism, there’s another small but important segment of the international market that Gold Coast business interests are focusing on. It’s sometimes called “look-see tourism”, describing foreign nationals who arrive for a holiday, often with families in tow and with clear intentions to check out the southeast Queensland region for prospective immigration, education and investment purposes. The Chinese are now very active in this area, particularly in property.

Real estate agents Julia Kuo and Sam Guo are business partners working through the Ray White franchise system. Kuo, originally from Taiwan, and Guo, from Chengdu, are among a growing number of realtors specialising in the Chinese market as well as selling to other prospective Asian investors. Their outstanding success rate as measured by property sales has become an industry talking point. Their sales topped a healthy $58.4m in the 12 months to last November, an impressive figure given the size of the Gold Coast market and that it is from just two agents working together.

“When we started in this business five years ago, we saw the potential for the Asian market, and particularly the mainland Chinese, looking for safe family investments and good education for their children,” Guo says. “They tend to think long term and aren’t too worried about short-term ups and downs in property values. Moreover, the Gold Coast lifestyle has a definite appeal, especially if you come from a crowded industrial environment.”

Kuo tells the story of a Chinese woman who saw a Gold Coast property on a website, rang her from China and made an offer $200,000 above the reserve price. The sale was concluded the next day.

Gold Coast Mayor Tom Tate is excited. “I’m on a mission to entice Chinese tourists and investors to the Gold Coast,” he says. “The key point I would make to potential Chinese visitors and investors is this - the Gold Coast is open for business and we welcome foreign investment and participation in long-term infrastructure projects. There is the political will to facilitate foreign investment and provide certainty for those who partner with the city.”

A further planned “comfort point” for Chinese tourists to the Gold Coast is the establishment of Chinatown precinct in Southport. “This development is about forging greater friendship with our Asian neighbours and continuing the cultural exchange between our countries,” says Tate. He predicts the Chinatown precinct will “bring a sense of home and community to our Asian residents and international students”.

As always, there are potential downsides to relying on a single market for growth. In the case of China, optimistic forecasts may be tempered by new Chinese government laws prohibiting the sale of so called “shopping tours”, which have so far been popular with group tourists.

Traditionally these products have been sold very cheaply, usually at a loss, with the revenue to the operator being made up by shopping commissions from “exclusive outlets”. If this practice is abolished, it will undoubtedly hit visitor numbers in the short term although, conversely, per capita visitor spending may go up.

John Chan, international marketing manager of Gold Coast Tourism, believes that after some initial impact the growth trend will rebound and continue unabated even if this practice is abolished. Chan also points out that under the new Chinese administration in Beijing, there has also been a crackdown on “study tours” and other practices such as trade show attendances by officials, which could slow this sector, at least for a time. But along with Nicholas Liu, Chan sees more potential, long term, in the higher spending family and individual sector.

In short, there’s every reason to believe that for the foreseeable future, the Gold Coast will be one of the major beneficiaries of outbound Chinese tourism which its own government expects to increase by up to 20 per cent this year. The very name “Gold Coast” in Mandarin has all the positive attributes any destination could wish for.


http://www.theaustralian.com.au/business/the-deal-magazine/chinese-tourists-lured-by-beaches-and-theme-parks-are-also-buying-real-estate/story-e6frgabx-1226832598939