Are we gambling too heavily on a Chinese tourism boom?

Australia's tourism industry is busy wooing wealthy Chinese tourists, but other potentially lucrative markets are being ignored.

You’ve probably seen the signs: an increasing number of tour buses on the streets, notices in Mandarin strewn throughout our airports and the whispers of the foreign language in hotel lobbies across the country.

Australia is gearing up to capitalise on its next boom industry, Chinese tourism. And it’s set to be a huge windfall for the country.

As part of its Tourism 2020 plan released mid-2013, Tourism Australia estimated that the Chinese tourism market could be worth up to $9 billion by 2020. By May this year that had been upwardly revised to $13bn.

They have good cause to be enthusiastic: HSBC estimates that by 2020 up to 20 per cent of short-term arrivals in Australia every month will be from China, and Chinese tourists will on average spend almost double the amount per night than other visitors.

China is a huge talking point for Australia’s tourism industry, but one aspect that’s not being discussed is the idea of overexposure. Is our tourism sector transforming into an industry that is too reliant on Chinese tourism?

Australia has made this mistake in the past: back in the 1980s, Australia positioned itself to capitalise on a strong influx of high-spending Japanese tourists. When the Japanese housing bubble burst and the yen collapsed, our prior lack of attention to other markets cost us dearly.

The good news is that since this collapse Australia has worked to build quite a diverse tourism intake. But with the focus increasingly on China, we're at risk now of repeating our past mistake.

Perhaps the most underestimated tourist market is New Zealand. The number of Kiwi’s hitting our shores has exploded over the past couple of years. 

Despite this, New Zealand is only expected to be worth at most $4.2bn to Australia in tourism dollars by 2020 -- less than a third of China’s forecast spend.

Tourism Australia’s market research on New Zealand visitors hints at why this may be the case. Kiwis typically spend less time and less money in Australia than tourists from other major destinations. 

Still, Australian tourism expert and associate dean of the School of Hotel and Tourism Management at the Hong Kong Polytechnic University, Brian King, warns that New Zealand’s economic impact may be undervalued, largely due to a general underestimation of the amount tourist visiting friends and family spend during their trip.

We may be underestimating other markets as well.

According to LaTrobe university tourism and education researcher Sue Beeton, India was the "flavour of the month" in Australian tourism circles a couple of years ago. Now, it’s estimated it will be worth up to $2.3bn to Australia’s tourism sector by 2020 -- less than New Zealand.

King also contends that the number of Japanese tourists coming to Australia will rise. Estimatess suggest Japanese tourism will be worth $3.3bn by 2020.

Despite the huge potential of these markets, it’s unlikely they will get much of a mention in our ongoing tourism debate. Like most of the discourse about China, we seem fixated on this one country and its potential benefits. Are we so focused on China’s future that we risk missing out on other opportunities?

Got a question? Let us know in the comments below or contact the reporter @HarrisonPolites on Twitter.

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