Australia loses out as Chinese tourists flock to Southeast Asia

By Reuters February 22, 2024 | 06:25 pm PT

Chinese tourists take photos in front of the Sydney Opera House in Sydney, Australia, in 2016. Photo by AFP

As Chinese tourism booms to visa-free countries in Southeast Asia, Australia is losing out, with more cost-conscious mainland travelers also choosing cheaper destinations closer to home, according to tour operators and industry data.

Once a magnet for Chinese holiday-makers, Australia's tourism industry is getting squeezed by visa demands at a time when Singapore, Thailand and Malaysia have waived such requirements and as mainland consumers tighten their belts.

Johnny Nee, Director at Easy Going Travel Services Pty Ltd in Perth, Western Australia, said his business only recovered to 40% of pre-Covid levels over Lunar New Year earlier this month even as Singapore, Thailand and Malaysia saw visitor numbers and spending exceed pre-Covid levels.

"Given China's economic outlook is not so certain and Chinese tourists are rather price conscious, this means they would prefer somewhere that is easier to get to and the traveling experience ... is not too bad either," said Nee, whose company also provides group tours for Chinese.

Costs for travelers, including some flights and accommodation, had risen 20% over pre-Covid levels, he added.

"The visa-free policies from Thailand and Singapore are quite appealing and I personally do think it has helped divert some Chinese tourists away from Australia."

A sluggish economy, property sector debt crisis and volatile financial markets have weighed on Chinese consumer demand, which in turn has crimped how much they splurge in countries that have traditionally banked on Chinese spending to boost tourism.

Chinese holiday-makers made up around 26% of visitors over the Lunar New Year period to Australia, compared with more than 50% in pre-Covid 2019, the Australian Tourism Export Council (ATEC) said.

Inbound tour operators were reporting turnover is less than 50% of 2019 revenues, it added.

"The Chinese holiday travel segment, which makes a significant contribution to the Australian economy, has been slow to shake off the effects of the pandemic," ATEC managing director Peter Shelley said.