Tourism operators hope Chinese visitors will return in 2023 despite signs of ‘turbulent’ year for travel

Over the past three decades, millions of Chinese travellers have dined at Harry Sou’s restaurants

Over the past three decades, millions of Chinese travellers have dined at Harry Sou’s restaurants during trips of a lifetime to see the Great Barrier Reef and the Daintree rainforest.  

The COVID-19 pandemic shut down international travel – the lifeblood of Far North Queensland’s economy – almost overnight, forcing Mr Sou to close multiple eateries and drastically restructure his business.

While international travel has begun to slowly resume, Australia remains almost entirely closed off to China, its largest inbound market pre-pandemic, which has maintained strict quarantine requirements for inbound arrivals and is only beginning to ease its domestic COVID-19 restrictions with cases starting to surge.

Visitation from China is 95 per cent below pre-pandemic levels, with the latest visitor survey recording just 62,120 arrivals from the country in the year to September.

“Right now, we’re still a long way before we get back to where we were,” Mr Sou said.

Mark Olsen expects Chinese travellers to begin returning in 2023.(ABC News: Brendan Mounter)

“We had to totally change our business model. Luckily, we did have part of our business looking after the local [market] so we managed to keep that part going.

“I see the Japanese are coming back but I cannot see the Chinese market is going to come back in a very fast way.”

A ‘turbulent’ year ahead

Domestic travellers have helped prop up businesses over the past year, with the latest figures showing Australian holiday-makers spent a record $4 billion in Far North Queensland alone.

This surge has helped the region climb back to 80 per cent of its pre-pandemic tourism trade, even without almost all its international visitors.

But as more Australians start to head overseas, the industry expects domestic travel to “soften”.

“The signs of a turbulent 2023 are already really clear,” said Mark Olsen, CEO of Tourism Tropical North Queensland.

“We’ve got high jet-fuel prices, strong outbound visitation and relatively slow international inbound arrivals and economic headwinds, both in our international markets and here at home.”

On a bright blue day, you see an Asian woman in bright pink take a selfie in front of one of the Sydney Opera House sails.
Before the pandemic, China was Australia’s largest market for inbound international visitation.(Reuters: David Munoz)

Mr Olsen said Chinese travellers would “definitely” return in 2023, “but it’s not going to be back to the pre-pandemic levels until 2025, 2026”.

“And that’ll depend on aviation access, the costs of travel and the restrictions associated with travel,” he said.

In Victoria, the outdoor museum at Sovereign Hill in Ballarat traditionally drew about 9 or 10 per cent of its visitors from mainland China, equating to between 50,000 and 60,000 people a year.

Sovereign Hill CEO Sara Quon said the slow return of Chinese visitation might begin with “perhaps more independent travellers” than before the pandemic.

“We may see some time before the group tour operators that were in place pre-COVID get back in business and gear up the nature of the businesses that they were running,” she said.

Chinese tourist Zhang Huili in the main street of Sovereign Hill
About 10 per cent of Sovereign Hill’s visitors traditionally came from mainland China.(ABC Ballarat: Margaret Burin)

Travellers from China were particularly appreciated in the tropical north because they were not deterred from coming during the quieter wet season, which helped balance out seasonal trade.

In Victoria, there’s hope large numbers will be returning by the time Lunar New Year arrives in early 2024.

But a research paper published in the journal Tourism Economics this year argued signs of reduced growth in inbound travel from China were already evident before the pandemic.

They attributed that to deteriorating relations between the two countries.

The researchers analysed Australia’s 20 largest markets for inbound international visitation to identify where the country could market itself if Chinese visitation were to decline.

Large outdoor signage in English and Chinese on the Reef Hotel Casino in Cairns.
One of Mr Sou’s former restaurants, located in the Cairns casino foyer, catered extensively for Chinese tourists.(ABC Far North: Christopher Testa)

Selva Selvanathan from the Griffith Business School said Malaysia, Thailand, South Korea and Indonesia were among the most attractive options, along with Vietnam and India, which have large migrant populations in Australia.

“We found the Japanese tourism market had peaked already and also, if you look at the growth rate among the top 20 tourism markets, Japan has the lowest average growth rate over the last 50 years,” Professor Selvanathan said.

“To bring more tourists from Japan, I think the Australian tourism industry has to do a lot of work and it’s more expensive.

“However, I think India is one of the promising markets for Australia and also trade as well.”

Hope for a diplomatic thaw

India has been the fastest recovering international market, with visitation from the country back to 57 per cent of pre-COVID levels.

“Two summers in a row, we’ve had really strong visitation from Indian nationals living here in Australia and that word of mouth is really starting to come through and we’re hearing that through the travel trade,” Mr Olsen said.

Ms Quon said Australia was naturally diversifying its tourism markets by engaging with “those who’ve started to return strongly”.

“I think that’ll continue to evolve as a number of different nationalities start to return to Australia and more inbound flight capacity is available from different markets as well,” she said.

Penny Wong in face mask, coat and scarf stands in front of an ornate Chinese building.
Tourism businesses hope Penny Wong’s recent trip to China will signal a fresh start in relations.(AAP: Lukas Coch )

There is hope though that Australia’s bilateral relations with China will begin to improve after some frosty years, particularly after Foreign Minister Penny Wong’s trip to Beijing this week, the first by a minister since 2019.

Mr Sou, who was part of various industry delegations to market Far North Queensland in China in the 1990s, was hopeful “softer conversations” between the Australian and Chinese governments would help mend ties.

He has been watching movement between China, Hong Kong, Macau and other nearby nations for an indication of when China might open up more broadly.

“I don’t think [travel] policy will be dramatically changed until after Chinese New Year,” Mr Sou said.

He warned though that much work would need to be done to rebuild, even once restrictions were lifted, because “a lot of the industry colleagues we used to deal with are already out of business”.

“It will be a very different game when we go back in and try to market ourselves and get the visitors back,” Mr Sou said.