4 ways to profit from the Chinese tourism boom

So far in 2016 international tourist visitor numbers into Australia have continued their impressive rise according to data released by Tourism Australia this month.

In May total international tourist arrivals increased 11.4% year-on-year to 542,000. This brought the year-to-date figure to a solid 3.3 million visitors, equating to an 11.2% increase from the prior corresponding period.

The incredible rise of Chinese tourism is clear to see in these results. Year-to-date China has now overtaken New Zealand as the country providing the most visitors into Australia.

These increasing levels of tourism will no doubt be a big benefit to the Australian economy. The following four shares are ones which I believe are positioned to profit from this rise.

Crown Resorts Ltd (ASX: CWN)

The hotel and casino operator could be one of the big winners from the tourism boom in my opinion. I think the company’s key Melbourne and Perth casinos have positioned it perfectly to capture growth in Chinese tourism. In the future this is only going to get stronger thanks to its six-star Barangaroo casino and hotel development recently gaining approval. Crown Resorts’ shares are changing hands at 22x trailing earnings, which makes them reasonable value in my opinion.

Mantra Group Ltd (ASX: MTR)

I believe the leading Australian accommodation and hotel operator is well positioned to attract a significant proportion of inbound tourists. Mantra currently has over 20,500 rooms under management in 125 properties predominantly across key locations in Australia. Mantra was recently given a buy rating with a $4.00 price target from US broker Moelis & Company. I feel this could make it a bargain buy right now.

Sealink Travel Group Ltd (ASX: SLK)

SeaLink Travel provides ferry services in key tourist hotspots such as Sydney Harbour and Kangaroo Island. I feel a weaker Australian dollar and increasing tourism puts this growing company in a great position to profit. Trading at 20x trailing earnings it could be a reasonable option for growth investors in my opinion.

Sydney Airport Holdings Ltd (ASX: SYD)

As the main gateway into Australia, Sydney Airport is likely to profit from increasing numbers of tourists flocking through its terminals. Year-to-date things are looking very promising with the company reporting an almost 10% lift in international passenger traffic as of the end of May. At 53x trailing earnings its shares are not cheap, but I believe its growth prospects justify this.

Lastly, if you own one of these three rotten ASX shares I would highly recommend considering swapping it out for one of the above shares. I believe each of the three shares could potentially be harming your portfolio right now.

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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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