The number of Chinese outbound tourists is expected to reach 140 million this year from 128 million in 2015. In 1995, the number was less than 10 million, he told FSA.
Chinese tourists have money to spend on travel itself, and on goods and services at their destinations, meaning that the new wave of tourism has been a huge boon for the businesses able to adapt and capitalise on it.
Retail, mall operators and owners have been able to profit from surging tourist trade at the best positioned retail properties, he said.
The Philippines and Australia are probably the two biggest beneficiaries from China’s outbound tourists.
“Obviously, the retail sector [in the region] is going to benefit most from the Chinese tourism story. We have increased our exposure to some shopping mall names in the Philippines and the Sydney airport.”
Airport operators and other travel infrastructure businesses that serve Asia’s most popular tourist destinations continue to witness substantial growth in passenger numbers.
GDP slowdown impact
Pidcock believes that China’s economic slowdown will not have a significant impact on the growth in Chinese outbound tourist numbers.
“I do think it is a structural growth story and we will see double-digit growth in Chinese outbound tourist numbers for many years to come, even if the GDP growth rates slow to 3- 4% per year. Obviously, if there is a sharp recession and if there is a sharp decline in the currency, it may be a sharper slowdown in tourism numbers. But the long-term outlook remains very good,” he said.
One reason is that the proportion of outbound travellers within the domestic population remains incredibly low in comparison with other markets. The number of overseas trips per citizen per year still averages just 0.09 in China, versus 0.3 trips in the US and 1.2 trips in the UK, he said.
Citing recent analysis from CLSA, he said Chinese tourism expenditure is likely to grow at 20% annually for the next five years, supported by rising disposable incomes, relaxed visa policies and rapidly expanding flight networks.