Sydney - Australia and New Zealand risk losing a global arms race for big-spending Chinese holidaymakers, jeopardising hopes that tourism will fill the economic hole left by the commodities downturn – unless they improve their services and infrastructure.
While both countries are enjoying record numbers of tourists from China, industry executives warn that they need to improve their Chinese language skills and offer better high-end hotels and transport infrastructure.
“We’re number one in terms of where they want to go, but we’re only number 15 in terms of where they actually go,” Matt Bekier, the chief executive of casino operator Echo Entertainment, told a US Chamber of Commerce lunch in Sydney earlier this month.
Bekier likened the competition for market share to “an arms race” in which $1.3-trillion (about R17.7-trillion) in tourism infrastructure was being developed around the world.
“Countries are making it easy for people to visit, not just once, but multiple times. That’s what we have to compete against. We can’t just sit back and say, ‘Well, our beaches are better’.”
The experience of the family of Enni Guan, a student in Australia, illustrated Bekier’s concerns.
Stopped and asked for her views as she was leading her visiting parents and grandmother along a Sydney harbour walk to the famous Opera House, she said her relatives would not have made the trip from Guangzhou if they had not had her to guide them.
“My parents go out only when I can accompany them,” Guan, 23, said, citing the lack of signage in Chinese.
A rapid increase in the number of Chinese visitors has been welcomed by Australia and New Zealand as they deal with the plunge in prices for their top export earners – iron ore in Australia and milk powder in New Zealand.
Australia’s resource-based economy is struggling with the demise of a once-in-a-lifetime mining investment boom, with growth below expectations and almost zero in the last quarter.
Driven by Chinese arrivals, tourism overtook coal as Australia’s second-largest export earner last year, raking in A$102 billion (R988bn), while in New Zealand it is poised to leapfrog dairy as the top earner.
“This is going to be the next mining boom,” said Bekier, whose Echo Entertainment company, along with rival Crown Resorts, is pinning the success of multibillion-dollar new developments in Sydney and Brisbane on high-rolling Chinese gamblers.
When it announced its third consecutive cut in interest rates earlier this month, New Zealand’s central bank noted that tourism was one of the few supportive sectors in the economy.
“New Zealand has become a hot destination,” said Stephen Lester, manager of Ngai Tahu Tourism, where Chinese tourists account for a quarter of revenues. “Just in terms of money in the door, (China’s) important.”
Tourism Australia expects spending by Chinese tourists to more than double from A$5.7bn last year to A$13bn by 2020. But some believe these estimates are hugely optimistic, given Australia’s lack of readiness.
IHG/Oxford Economics predicts that Australia will not rank in the top 10 markets for forecast growth in Chinese visitor numbers in the next decade. North of Sydney, the Great Barrier Reef in Queensland is one of Australia’s biggest tourism drawcards. Even here, many resorts have not been upgraded since the 1980s.
The state government is so worried it has appealed to foreign investors to take advantage of the weak Aussie dollar to snap up some cheap tourism assets.
Guan said: “I upgrade my phone for new features, similarly Australia needs an upgrade. In China everything is new and flashy, Australia is old.”
Reuters