International visitation to Australia from China has increased by an encouraging 17.1%, over the year to September 2005. 

According to Jones Lang LaSalle Hotels, the recently released Australian Bureau of Statistics (ABS) arrivals data for the September quarter 2005 reveals China is Australia's fastest growing source market.

Growth in the China source market has major implications for hotel and tourism investment in Australia.  "Catering for the specific needs of this market and other Asian markets should be one if not the primary focus for future tourism planning and development," said Mr Max Cooper, Senior Vice President, Jones Lang LaSalle Hotels.

The China market is often perceived as being tour group based, utilising only three star accommodations in capital cities and the Gold Coast.  "Although this has been largely the case to date, there is growing demand for the full suite of tourism accommodation product," said Mr Cooper.  The Amway Convention during January 2005 delivered over 13,000 principally Chinese delegates to Sydney's five star hotels; a major boost to the industry during a traditionally quiet trading period.

In 1995, the China inbound market was very small and represented less than 2.0% of total visitor nights spent in Australia.  "Within a decade, visitor nights spent in Australia by Chinese tourists increased almost tenfold and now comprises approximately 8.0% of the international visitor market," said Mr Cooper.

According to the Tourism Forecasting Committee (TFC), visitor nights from China are now on par with the Japanese market and are set to be the second largest source market behind the UK within three years.  Mr Cooper added, "By 2014, the TFC expects China to be our largest source market, accounting for approximately 13.0% of all hotel and other tourist accommodation room nights occupied by inbound tourists."

Australia was one of the first countries to be granted Approved Destination Status (ADS) by the Chinese Government in 1999.  The ADS system determines most outbound leisure travel from Mainland China and requires travel bookings through licensed agents.  The potential for tourism growth to Australia has been enhanced through the recent expansion of provinces able to travel out of China.  "This reportedly increased the size of the China market by 855 million people," said Mr Cooper. 

The ADS scheme has recently been strengthened by a range of reforms to ensure Chinese tourists are adequately catered for.  "Whilst the majority of tourism operators are delivering a quality tourism experience to Chinese visitors, the new reforms will protect these operators and tourists against the dishonest practices of a very few operators," said Mr Cooper. 

These issues have been addressed under the new arrangements whereby all existing ADS operators are required to re-apply for approval and applications are also invited from appropriately qualified Australian businesses wishing to enter the scheme.  Operators will need to comply with a new ADS Code of Business Standards and Ethics.

Tourism Australia and the China National Tourism Administration (CNTA) met recently in Beijing to reaffirm their commitment to the ‘Honest Travel' campaign for travel between China and Australia.

The growing number of travel routes and airline carriers between China and Australia will help further stimulate greater passenger volumes.  China Eastern Airlines, Qantas and Air China have all planned additional direct flights commencing in December 2005 or January 2006.

Mr Cooper says that by getting the balance of accommodation product right, it will provide Australia with a major injection to exports.  Getting it wrong will severely curtail medium to long-term tourism growth.  "Further growth is also likely to attract Mainland China investment and hotel operators to Australia," he said. 

In addition, hotel development opportunities are expected to become more feasible over the medium term particularly in the stronger performing markets of Sydney and Brisbane.  "Accor's new Sofitel development at Sydney Olympic Park indicates that the viability for full service hotels has improved sufficiently in select locations to make developments work," said Mr Cooper.  He added, "Other locations also represent a unique opportunity to capitalise on budget and middle tier markets."

State and Territory Governments may need to make available appropriate sites to bring about the larger hotel and tourism developments.  "In the past this has been done through leasing public owned land and buildings, which has helped recycle underutilised property while retaining public access," said Mr Cooper.

During the September quarter 2005, international arrivals to Australia increased by 4.8 % over the previous corresponding period. Year to date international arrivals were also up 7.3% over 2004 levels.