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Chinese hotel investors fuel Australia’s tourism boom

08/09/2016| 6:44:07 PM|

Affluent Chinese are building a vested interest in Australia’s tourism boom by buying up well known hotels thanks to a favourable exchange rate and growing middle class.

A new generation of affluent Chinese are not only flocking to Australia for holidays – some are building a vested interest in the country’s tourism boom by buying up some of its well known hotels.

Chinese money accounted for a third (by volume) of Australian hotel transactions last year with investors picking up some big names such as Hilton Sydney for AU$442 million, and in 2014, Sydney’s Sheraton on the Park for AU$463 million.

This investment in hotel opportunities mirrors a major influx of Chinese tourism dollars flowing into the country thanks to a favourable exchange rate and its growing middle class.

In 2015, Chinese visitors accounted for Australia’s second largest market for visitor arrivals and the largest market by total expenditure and visitor nights. Visitors from China spent a total AU$8.3 billion (US$6.2 billion) during their holidays, a number that is estimated to increase to AU$13 billion by 2020.

All of this is a far cry from the picture of Chinese tourism in Australia less than a decade ago. In 2009 visitors could only fly in from five Chinese cities, and there were few Chinese tourists to be seen in Australia. What changed the landscape entirely was the 8,000 Amway five-star-only incentive group that visited Sydney in 2011, bringing in over AU$40 million for New South Wales.

That visit prompted a strategic shift in mind-set, with hoteliers such as AccorHotels establishing China-focused initiatives to woo more spenders from the country and customising their service standards to meet Chinese cultural expectations.

Hotel groups began to see potential in securing long-term demand, in view of the Chinese preference for top quality accommodation.

Despite a cooling Chinese economy and Australian governments restricting Chinese money in some real estate sectors, funds from China continue to flow into Australian tourism destinations, with investors attracted by Australia’s economic stability and the record breaking performance of the hotel sector in cities such as Sydney and Melbourne.

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TAGS: Australia | China | outbound travel | investment
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