After eight years of bumping along somewhere between 5.4 million and 6.0 million, growth in international visitor arrivals into Australia is gathering pace once again;

Over the two years to June 2014, arrivals have increased by almost 12% to 6.69 million while Tourism Research Australia is currently forecasting arrivals to reach 8.6 million by 2019/20.

In this article we examine how the composition of arrivals has changed over the past 10 years and what we can expect looking forward based on the current TRA forecasts.

New Zealand continues to be Australia’s single largest source market with 1.23 million arrivals in 2013/14. Its overall share has remained relatively stable over the past decade representing around 18.3% to 18.4% of total international arrivals. TRA expects New Zealand arrivals to grow to 1.4 million by 2019/20 to represent 16.2% of the forecast total as Asian inbound markets are anticipated to increase at a much faster pace.

The year ending June 2013 saw an historic development in arrival trends. For the first time ever, arrivals from China surpassed the United Kingdom to become the second largest source market.

Arrivals from China have surged from 217,000 a decade ago to 764,000 in 2013/14 with overall share more than doubling from 4.3% to 11.4%. TRA forecasts this trend to gather pace with Chinese arrivals expected to increase to 1.2 million in 2019/20, representing 14.4% of the forecast total.

Arrivals from the United Kingdom have contracted from 686,000 in 2003/04 to 649,000 in 2013/14 with this trend relegating it to be the third largest source market. Its overall share has declined from 13.6% to 9.7% over the past decade and based on TRA forecasts arrivals are expected to increase slightly to 842,000 by 2019/20 which would represent a share of around 9.8%.

United States arrivals have grown modestly to 532,000 in 2013/14 making it the fourth largest source market. This compares to 430,000 a decade earlier. These numbers represent an overall share of 8.0% and 8.5%, respectively. Furthermore the TRA expects arrivals from the US to have reached 660,000 with a share of 7.7% by 2019/20.

Singapore is currently Australia’s fifth largest source market with arrivals growing from 253,000 in 2003/04 to 387,000 in 2013/14. Overall share has increased from 5.0% to 5.8% and TRA expects arrivals from Singapore to grow to 503,000 by 2019/20 to account for 5.8% of the forecast total.

Arrivals from Japan have slumped from 688,000 in 2003/04 to 326,000 in 2013/14 with overall share declining from 13.6% to 4.9%. Over the corresponding period Japan has slipped from being the second largest source market to sixth. TRA forecasts suggest that arrivals from Japan will be at 369,000 by 2019/20 to represent around 4.3% of the forecast total.

The recent return to more robust arrival increases into Australia is welcome news after several years of benign growth arising from economic turmoil in historically important markets, a high Australian dollar and the global trend to more frequent but shorter international trips.

Hopefully this trend can gather pace to emulate at least some of the success of our Asian neighbours where the past ten years have seen arrivals into Indonesia increase by 200% to 8.8 million and by 250% into both Singapore and Thailand to reach 15.6 million and 26.5 million respectively.

For further information or to discuss our Hotel Advisory services please contact Troy Craig (+61 2 9220 8788), Monika Zochowski (+61 2 9220 8794), or any member of our Strategic Advisory team.

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