At the start of last week the Australian Bureau of Statistics released its tourism figures for the month of November. Yet again the figures reveal that the Australian tourism boom is in full swing.
Although there was a slight drop in growth compared to the previous month, short-term visitor arrivals still grew 9.9% over the prior corresponding period.
This is without doubt great news for companies with exposure to the tourism industry and could provide them with strong organic growth. Three shares I expect to prosper are as follows:
Apollo Tourism & Leisure Ltd (ASX: ATL)
One of the key drivers of tourism growth in Australia has been the weaker Australia dollar. Whilst this is great for foreign tourists coming here, it does make overseas trips for Australians more expensive than previously. Because of this I expect domestic tourism could receive a boost. As a recreational vehicle rental business, I believe Apollo Tourism & Leisure could see demand for its fleet increase.
Mantra Group Ltd (ASX: MTR)
Mantra would have to be my favourite investment in the tourism industry. It has over 20,000 rooms under management spread out across key tourist hotspots. Demand for its rooms increased in FY 2016, leading to both occupancy levels and the average room rate charged increasing at a solid rate. There are concerns that global juggernaut Airbnb could pose a threat in the future, but management has dismissed these concerns. At 18x trailing earnings and providing a fully franked 4% dividend, Mantra could be a great a buy in my opinion.
Sydney Airport Holdings Ltd (ASX: SYD)
As the main gateway into Australia I believe Sydney Airport stands to benefit from the increasing number of arrivals into the country. In 2016 it welcomed 41.9 million passengers through its gates, up 5.6% from a year earlier. International passengers were the main driver of this growth, increasing 8.9% year on year thanks to strong arrival numbers from Japan, China, and India. I expect this trend to continue for several years, which should allow Sydney Airport to grow its earnings at a solid and predictable rate for some time to come.
