Inbound arrivals to Australia: China Underpins Strong Growth

February 01, 2019

Author: Troy Craig, Managing Director, Hotels & Hospitality


In what has proven to be great news for the local tourism industry, growth in international visitor arrivals into Australia accelerated to post CAGR* of 7.8% per annum over the period from 2012 through to 2017 to reach 8.1 million arrivals. This momentum continued during YTD September 2018 with international arrivals witnessing a further increase of 5.6% year-on-year relative to YTD September 2017. These results represent a substantial improvement in international arrival growth which posted subpar growth of 1.1% CAGR over the period from 2005 to 2011.   In this article we examine how the composition of arrivals has changed over the past 10 years based on the data from Tourism Research Australia (TRA).

During 2017, Mainland China surpassed New Zealand as Australia’s top source market for the first time ever with a total of 1.25 million arrivals in comparison to 1.23 million arrivals from New Zealand. As a result, Mainland China’s share of total arrivals improved to 15.4% in comparison to 15.2% for New Zealand. Between 2012 and 2017, visitor arrivals from Mainland China grew by 16.4% per annum in contrast to 2.7% per annum growth rate achieved in arrivals from New Zealand. Over the YTD September 2018 period, arrivals from Mainland China continued to grow strongly, increasing by 6.8% compared to the corresponding period in 2017.

United States arrivals have grown strongly to 729,000 in 2017. This compares to 424,000 a decade earlier. These numbers represent an overall share of 9.0% and 8.2%, respectively making it the third largest source market in 2017 in comparison to being fourth largest during 2007.

Arrivals from the United Kingdom have grown, albeit slowly, from 654,000 in 2007 to 689,000 in 2017 with this trend relegating it to be the fourth largest source market. This translates to a CAGR of 0.5% between 2007 and 2017. Its overall share has declined from 12.7% to 8.5% over the past decade.

Japan is currently Australia’s fifth largest source market with arrivals declining from 526,000 in 2007 to 398,000 in 2017. Over the corresponding period Japan has slipped from being the third largest source market with a share of 10.2% to sixth with a share of 4.9%.

The return to more robust visitor arrival growth into Australia between 2012 and 2017 is welcome news after several years of limited growth. Looking forward, we expect that increased and focused marketing campaigns, ongoing tourism infrastructure improvements across the country and increased airlift particularly from long-haul markets will benefit the medium to long term prospects of Australian tourism industry.  Tourism Australia’s current forecasts anticipate international arrivals into Australia to reach 15.0 million by Financial Year 2026-27 with arrivals from Mainland China expected to continue on a strong growth trajectory, reaching 3.9 million in the same financial year.

Top 5 Source Markets to Australia