Australia’s inbound tourism industry remains cautious as the recovery of Chinese visitor numbers continues to lag, with Lunar New Year travel showing mixed results. While some operators report stronger demand from independent travellers and premium groups, traditional group travel under the Approved Destination Scheme (ADS) remains sluggish, raising concerns over long-term sustainability.
Data from Tourism Research Australia (TRA) reveals that despite Australia’s second-largest inbound market, China’s visitor recovery has stalled at just 56% of pre-pandemic levels in FY2023-24. Total spending by Chinese visitors currently stands at $7.4 billion—down 23% from pre-COVID figures—despite steady year-on-year growth. Forecasts now predict that full recovery will not be realized until at least 2027, underscoring the need for sustained government intervention.
The Changing Face of Chinese Travel: A Shift to Independent Travelers
Industry insights indicate an apparent transformation in how Chinese tourists engage with the Australian market. Free Independent Travelers (FITs) and smaller high-value groups show stronger demand, while larger ADS-driven tour groups struggle to regain momentum. This shift highlights the growing preference among Chinese travellers for flexible, personalized experiences rather than rigid, large-scale itineraries.
“Given the market remains well below pre-pandemic levels, revitalizing the ADS is critical to driving a stronger and more sustainable pipeline of Chinese visitors to Australia,” said Peter Shelley, Managing Director of the Australian Tourism Export Council (ATEC). “A modernized ADS could better align with the changing travel preferences of Chinese tourists, ensuring Australia remains competitive as the market recovers.”
Government Intervention Needed to Revive Group Travel
The ADS, originally designed to facilitate group travel from China under approved tour operators, is now seen as outdated in its current form. Industry leaders argue that a comprehensive overhaul is necessary to reflect new travel trends and make Australia a more attractive destination for returning Chinese visitors.
“While we are seeing stronger growth from FITs and smaller high-value groups, large-scale group travel, particularly through the ADS, is not recovering at the same rate. That’s why it’s imperative to evolve the ADS framework to align with market needs and ensure it remains an effective tool for attracting Chinese visitors,” Shelley added.
ATEC has urged the government to prioritize investment in the Chinese tourism market to accelerate recovery through its 2025 pre-budget submission. The key recommendations include:
- Revitalizing the ADS: Reforming the scheme to cater to modern traveller expectations, introducing trade missions, and expanding regional itineraries.
- Inbound Tour Operator (ITO) Grants: Co-funded grants help rebuild global distribution networks and restore international trade partnerships.
- Regional and Small Business Support: Implementing targeted trade opportunities to strengthen tourism offerings beyond significant cities.
- Tourism Australia Funding: Ensuring continued financial backing to enhance promotional efforts in high-growth markets like China.
The Race Against Regional Competitors
Australia faces increasing competition from other global destinations aggressively courting Chinese tourists. Countries such as Thailand, Japan, and the United Arab Emirates have implemented innovative policies, including visa relaxations and tailored marketing campaigns, to capture the recovering Chinese outbound market.
Industry stakeholders warn that Australia risks losing its appeal among Chinese travellers without swift government action. The urgency to modernize the ADS aligns with broader efforts to ensure Australia remains a top-tier travel destination in the Asia-Pacific region.
“Government support continues to be essential in regenerating travel from China. As one of the least recovered markets, China’s return to growth depends on ensuring Australia remains competitive and attractive. Evolving the ADS visa offering will play a key role in achieving that goal,” Shelley emphasized.
Looking Ahead: A Critical Juncture for Chinese Tourism in Australia
With Lunar New Year traditionally serving as a barometer for Chinese travel demand, this year’s mixed performance underscores the pressing need for reform. While FITs and premium travellers drive momentum, the lack of recovery in group tourism highlights structural challenges that cannot be ignored.
As the government prepares for the 2025 budget, tourism leaders continue to advocate for comprehensive policy changes to reinvigorate Chinese visitor flows. Without decisive action, Australia risks further delays in regaining its share of one of the world’s most lucrative outbound travel markets.
The road to full recovery remains long, but with strategic investments and a modernized approach to Chinese tourism, Australia can reclaim its position as a preferred destination for one of the world’s most significant travel segments.
Conclusion As competition intensifies across the Asia-Pacific region, Australia must act swiftly to ensure it remains an attractive and accessible destination for Chinese travellers. By modernizing the ADS and prioritizing targeted industry support, the government can help reignite China’s tourism contribution to the economy. The time for action is now—Australia’s position in the global tourism market depends on it.
Written by: Charmaine Lu