Chinese tourism to Australia has grown at an astonishing 13% compound rate in the decade between 2002 and 2012, but could be set to explode in the next few years.
According to research by NAOS Asset Management, Asian countries like Korea, Japan and Taiwan only saw a tourism boom once GDP per capita exceeded US$8,000 to US$9,000. And China's GDP per capita is expected to reach that mark rapidly.
Chinese visitors to Australia now rank second only behind New Zealand, having overtaken the United Kingdom in December 2012. As more Chinese tourists come to Australia, they are also expected to spend more, proving a boon to our domestic tour and attraction operators.
Four companies that look set to benefit immensely include Sydney Airport Holdings Ltd (ASX: SYD), Ardent Leisure Group (ASX: AAD), Village Roadshow Ltd (ASX: VRL) and Amalgamated Holdings Limited (ASX: AHD), according to NAOS.
We can add another company in there as well – Sealink Travel Group Ltd (ASX: SLK), which operates the one and only ferry to Kangaroo Island in South Australia, as well as Captain Cook Cruises on Sydney Harbour.
Why Sydney Airport will benefit should be fairly obvious – more visitors means more aircraft arriving, which equates to higher revenues, not to mention the dollars visitors will spend once in the airport.
Ardent Leisure operates leisure and entertainment businesses including two theme parks on Queensland's Gold Coast, marinas, bowling alleys, and health clubs. The Gold Coast is a major destination for Chinese tour groups.
Village Roadshow also operates two theme parks on the Gold Coast as well as Wet'n'Wild in Sydney and movie theatres, while Amalgamated Holdings operates movie theatres, several hotels and resort and Thredbo Alpine Resort.
As an added bonus for investors, all five pay decent dividend yields, currently above 3%. If you're looking for a higher, fully franked dividend yield, you can't go past this stock flying under the radar…
