Chinese tourism boom Down Under is raising the value of Australian hotels

Brisbane

This week's Chinese New Year also launches the first-ever Australia-China Year of Tourism. The designation is apt: 2015 saw more than 1 million Chinese citizens visit the country, a surge of 22 percent over 2014’s total. What's more, those visitor numbers are expected to double to two million in the next decade, and Chinese investors are paying close attention to Australia's hotels and resorts.

Since 2009, Chinese visitor numbers have grown by more than 350 percent from 300,000 to 1.1 million, with China expected to become Australia’s leading inbound market by the end of the year. According to Tourism Australia, each Chinese visitor spends an average of $8,000 in the country—$3,000 more than the average spend for visitors from anywhere else. 

In 2016, Chinese visitors injected $8.3 billion into the Australian economy, and that number is expected to grow to $13 billion by 2020.

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Since 2014, China had become one of the largest investors in the Australian hotel and tourism market, with some top-tier property groups investing as much as $10 billion in travel-related assets. 

In Queensland alone, Chinese investors have acquired the resorts on Daydream and Lindeman islands, the Sheraton Mirage Port Douglas and Gold Coast hotels such as ­Palazzo Versace, the Hilton Surfers Paradise, Sofitel and Crowne Plaza.

As we noted earlier this month, Australian companies are teaming up with Chinese investors to create JVs behind new multi-billion-dollar integrated casino resorts. For example, Australian company ASF partnered with Chinese state-owned enterprises CCCC Guangzhou Dredging and China State Construction Engineering on a $2-billion project on the Gold Coast. The waterfront development will include "multiple" luxury hotels as well as restaurants, serviced residences and conference facilities.

The first nine months of 2016 saw about $1.7 billion of hotel transactions take place in Australia, including the $700-million Zhengtang Group investment into Sydney’s Ribbon development. High occupancy rates, a benign supply outlook and increased air capacity from key markets like China and India mean that hotels are likely to keep proving profitable. 

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