10 May Chinese tourism – a contribution all Australian businesses can celebrate
SPEAKERS FROM LEFT TO RIGHT: Janene Rees, Rees International; Andy Jiang, Consultant & Former GM Tourism Australia; Lin Zhang CTrip International; Edea Lu, Tourism Australia; Steven Zabeti Accru Felsers; Natalie Cope, Australia China Business Council; Nicholas Henderson, Asialink Business; Simon Henry, UWAI.com.
Accru Felsers, Australia China Business Council and Asialink Business joined together to bring our clients and members a special event celebrating the business opportunities flowing from Chinese millennial tourism. Held at the Australian National Maritime Museum and on board the beautifully restored James Craig tall ship, these stunning venues superbly showcased Sydney’s Harbour City. See photos of the State of the Nation: China’s travelling millennials event here.
Accru Felsers partner Steven Zabeti gave the opening address to over 150 attendees, highlighting the connection between Chinese tourism and the broader Australian economy. Andy Jiang, one of the expert panellists, advised businesses to “remove the barriers for millennials to promote your business” with a great example of Lone Pine Koala Sanctuary’s free high-speed wi-fi and mobile charging stations for on-the-spot blogging and unlimited Instagram photos!
The purchasing and promotional power of Chinese millennials is indeed something that all businesses can potentially benefit from. Steven Zabeti explains why.
Tourism’s contribution to the Australian economy
Australia’s economic engagement with China has been a principal source of prosperity and a contributing factor to Australia experiencing the developed world’s longest period of uninterrupted growth in the 26 years from 1991. Australia’s tourism industry continues to be one of the key pillars of our economy. The numbers speak for themselves:
- For the third year in a row, tourism grew faster than the national economy, and now accounts for ten percent of Australia’s total exports.
- Tourism is a multi-billion-dollar industry that provides direct employment for almost 600,000 Australians and contributes $55 Billion to Australia’s GDP.
The impact of this growth is far reaching and playing a key role in the economic growth of Australia’s regional centres.
Chinese tourists to Australia
2018 marks 45 years of Australian and Chinese diplomatic relations. Off the back of a successful China-Australia Year of Tourism in 2017, annual Chinese visitor numbers have hit new records making Chinese visitations the most valuable tourism market.
International visitor spend in Australia now surpasses $55 Billion, with Chinese tourists spending 1 in every 4 tourism dollars in Australia. Around 45% of Chinese tourists to Australia are upper middle class professionals. And almost 50% of Chinese tourists in Australia are millennials – aged 35 or under – a sizeable and influential market.
Australia’s increased accessibility for Chinese tourists
Australia is now highly accessible for more Chinese tourists. Visa reforms and the ‘Open Skies’ agreement has helped remove capacity constraints on Chinese airlines operating in Australia, boosting visitor numbers from second-tier cities by providing direct access to Australia. There are now seven carriers flying into Australia, an increase from four in 2014. Total capacity and utilisation have both increased.
Deeper connections to Australia function like free advertising
After coming to Australia, Chinese visitors develop a broader connection to our country often participating in Australian education, business, property, consumer goods and migration so their ultimate economic footprint is much wider than their spending on the trips themselves.
Chinese students often develop a lifetime connection with Australia, boosting tourism through visits by friends and relatives and domestic travel. This also helps them understand the Australian market and become more comfortable investing.
Chinese visitors tend to be favourably disposed to Australian brands, creating significant opportunities for Australian companies to promote their products and services. This effect is pronounced when a Chinese influencer profiles a particular product and effectively reaches China’s huge millennial demographic.
Bridestowe Bear – the power of Chinese millennial endorsement
Case examples like the celebrity endorsement of the Bridestowe Lavender Bear demonstrate the potential of Australian products being catapulted into the Chinese mainstream.
The lavender bear became a viral sensation when Chinese model Zhang Xinyu posted a photo of herself on social media with a lavender bear from Bridestowe Estate, boasting about its potential health benefits. Within a year, 65000 visitors had flocked to the Bridestowe Estate site and interest has remained strong since.
Bridestowe enjoyed overnight exponential growth thanks to influence marketers and ‘Key Opinion Leaders’, but this almost crippled the business because demand jumped from tens to hundreds of thousands of orders and every part of the supply chain had to be re-evaluated!
As more Chinese visitors continue to arrive, Australia will need to meet rising expectations.
For example, greater availability of information in Mandarin, hospitality touches specific to Chinese culture like the use of slippers in hotels, closing hours of restaurants which are earlier than Chinese visitors are accustomed to, and offering digital payment mechanisms widely used by Chinese millennials including WeChat Pay and AliPay.
Business and Chinese investors
When it comes to business, Chinese investors are sensitive to regulation. If there is uncertainty around future taxes on property, Chinese investors may hesitate. Hong Kong has already experienced decreasing demand from mainland Chinese investors on the back of tightening capital controls. We’re also seeing Chinese businesses following tourist demand into Australia to set up Chinese facing services on the basis of the economic flows created.
Accru Felsers – supporting Australian and Chinese business growth
As more businesses move to tap into these opportunities, it’s important to understand the Australian investment and taxation framework. At Accru, that is precisely what we have been doing for inbound investment over the last 75 years.
Thanks to our European origins, we have assisted many European businesses to come to Australia and grow into well-known brands. As our clients’ international business interests have shifted from West to East, so too have our services, and China has naturally become increasingly important to our clients for both manufacturing and exporting.
Digital marketing channels make reaching the Chinese market a reality, we’re seeing businesses go global at increasingly earlier stages of their lifecycle which provides massive growth. This growth creates financial and regulatory issues, like international tax and transfer pricing, Asia-Pacific business structuring and cashflow challenges that we are well equipped to deal with. This is where Accru Felsers can help. See our Accru website for our services assisting Chinese speaking businesses and please contact us if you would like to know more about how we can grow your business.