The Tempting Australian Tourism Industry

Australia is the world’s seventh biggest tourism market and a prime spot for business investment. Tourism is a significant component of the Australian economy and besides providing exquisite tourist options, the sector generates jobs and delivers investment and growth in communities throughout the country.

Australia benefits from its location- it is part of the globe’s strongest tourism zone and biggest aviation marketplace. A sector rightly considered to be one of the key strengths and set for supercharged growth, Australian tourism has depicted a growth trajectory over the years.

What to Look Out for In Australia?

Appealing natural assets, a safe environment, and the feasible services provided by low cost airlines- are all catalysts to provide Australia with a competitive edge in Asia and beyond. Moreover, the vibrant tourism industry is not restricted to the fancy cosmopolitan Aussie cities, but icons and bucket-listed spots across the regional realm.

The popular Australian destinations include:

• The coastal cities of Sydney (Opera House, Bondi Beach, Harbour Bridge), Brisbane and Melbourne;
• Regional Queensland (Fraser Island, Daintree Rainforest);
• The Gold Coast;
• The Great Barrier Reef (the world's largest coral reef);
• The Tasmanian wilderness and Cradle Mountain

What Do the Statistics Reveal?

According to the Australian Bureau of Statistics (ABS), in August 2019, the overseas visitor arrivals to Australia was up by 0.9% since July, to 812,600 trips. Following suit, the Australian resident returns from overseas was up 0.7% since July, to 955,800 trips.

The Department of Infrastructure and Regional Development stated that in May 2019, 61 transnational airlines operated scheduled services to and from the country (international scheduled passenger traffic reached 42.07 million).

New Zealand, Singapore, Malaysia, Indonesia, China, the Middle East and the USA are amongst the top visiting countries.

Australia is in its 28th year of consecutive annual economic growth and the growth rate is projected to be the highest among major advanced economies over the next 5 years. This is bolstered by the strong institutions, a unique services sector and the ability to respond to global changes. Consequently, the aviation industry (airline capacity) would increase by 50 per cent (by 2020).

How Do the Tourism Related Stocks Perform On The ASX?

The robust influx of visitors in Australia is likely to grow demand for accommodation and besides inbound tourism, the number of Australians taking trips beyond borders will increase airline traffic. This leaves a hoard of attractive companies benefitting, and their shares are the hot picks on the ASX:

• Sydney Airport (ASX: SYD) is the main gateway into and out of Australia, and in September 2019, its international passenger performance was up by 1.9% (compared to pcp) and growth was reportedly holding steady at 1.4% (YTD). Indian arrivals recorded their second consecutive month of double-digit growth (up by 11.2% on pcp). SYD has generated a YTD return of 34.14%.

• Webjet Limited (ASX:WEB), ANZ’s #1 online travel agency is another important stock with a YTD return of 9.25%. Its B2B division, WebBeds (TTV $2.2 billion in FY19) is the world’s 2nd largest and fastest-growing accommodation supplier to the travel industry and caters to Europe, APAC and AMEA. Interestingly, by FY19, in just 2.5 years of trading WebBeds APAC created $232 million TTV organically and by FY23, the APAC TTV is expected to be over $1 billion.

• The Star Entertainment Group Limited (ASX:SGR), is part of this bandwagon due to its game-changing Queen’s Wharf Brisbane Project moving at pace. Regarded as Australia’s most unique integrated resort with an extraordinary blend of contemporary and heritage buildings, the Project is handled by the Company and its partners- Chow Tai Fook and Far East Consortium. The 3.6 billion-dollar investment promises to create a world-class precinct for local, interstate and international visitors. Completion is expected in 2022, though the first completed public spaces – Mangrove Walk and Waterline Park will be unveiled soon.

As the country’s new tourism slogan says- Come Live Our Philausophy, Australia is a unique spot which needs to be experienced to be fully understood- life, people, moments and places.

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