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What happens if the Chinese government bans Chinese visitors to Australia?

December 5, 2020 Aviation No Comments

With so much going on with the big stick waving and sabre rattling between the Chinese and Australian government over wheat, barley coal and now wine, has anyone really given a great deal of thought to the impact of China banning visitors to Australia and withdrawing from the Approved Destination Status which allows Chinese tourists to travel to Australia, organised by outbound tour operators and approved by Australian and Chinese government authorities?

Back in 1999, Australia was one of the first western countries to be granted ADS status and since then millions of Chinese tourists have visited  Australia under ADS, with according to Austrade, the objectives of the scheme are to restore integrity, competition and fair trading to the Chinese inbound group market and to empower Chinese tourists with knowledge and choice so they can exercise their consumer power in the market.

Austrade also says that the success of the ADS scheme has also helped to strengthen the Australia-China tourism relationship, but it has gone rather sour in recent years and months, with some predicting that China could withdraw from the ADS, with disastrous consequences.

Back in 2006, Australia and China agreed to “a commitment to fostering the growth of sustainable and quality tourism”  through the signing of a five-year memorandum of understanding (MOU) between the Australian Government and the China National Tourism Administration on the ADS scheme in August 2006 and the MOU was renewed by the two governments in April 2016 during Australia Week in China.

In the meantime, I found these very good charts by Camper Champ which rather sum up what a terrible disaster China withdrawing from the ADS would be for Australia.

Over 899,000 Chinese tourists visited Australia for the year ending June 2020, although visitors from mainland China were down 37% when compared with the 1.4 million visitors of the previous year.

Prior to 2020, China had been the leading source of visitors to Australia for two years in a row, with the dramatic decrease attributed to the COVID travel ban placed on Chinese visitors in February and the ongoing coronavirus restrictions, but it gives a small taste of what the withdrawal by China from the ADS would look like, but much worse.

Chinese Tourists spent a total of $ 8.4 billion during trips to Australia for the year ending June 2020, although spending was also down 29.4% when compared with the $11.9 billion of the previous year, although, due to a larger spend on education, Chinese visitors have historically been the highest spenders during visits to Australia.

With the majority of growth in Chinese visitors in the last decade it has been driven to a significant degree by a steady increase in the number of Chinese students in Australia, with in 2017/18, China became the top source of international visitors to Australia, overtaking New Zealand.

The potential for further growth is still significant since, as of 2019, only 13% of Chinese residents owned passports, compared to 70% of New Zealand residents.

So, the Chinese visitor growth to Australia slowdown in 2019, has been attributed to: a slowing of the Chinese economy; the ongoing Australia-China trade dispute already having an impact; and a growing number of attractive alternative educational options for Chinese students, including New Zealand, UK and Canada.

February is the peak period for Chinese visitors to Australia with the full impact on visitors to Australia in 2020 not yet known, with China’s contribution to tourism expenditure in Australia $11.9 billion in 2018/19, more than 26% of all expenditures from international tourists in 2018/19 — three times more than the next-largest Australian tourism spenders, the Americans!

So, what do Chinese tourists spend on in Australia, with when airfares are excluded, Chinese visitors spend the most per day in Australia, with above-average spending on education and shopping and slightly below-average spending on tours and transport.

What is very interesting is that Australia currently does not feature in the top 10 international destinations for the Chinese, yet earns its maximum tourism revenue from the Chinese.

We shall have to wait and see and at the same time hope that Australia’s struggling tourism industry will not be hit another massive blow, and this time from the north!

An edited report by John Alwyn-Jones

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