How you could profit from the Australian tourism boom

On Friday the Australian Bureau of Statistics released its tourism data for the month of May. Once again the data revealed that the Australian tourism boom continues unabated.

According to the release, Australia welcomed 727,600 short term arrivals into the country during the month, an increase of 7.7% from May 2016.

New Zealand was once again the biggest contributor to Australia tourism, providing 112,300 short term arrivals during May.

But China wasn’t far behind and is closing in fast on New Zealand. Approximately 106,700 short term arrivals hit Australian shores from mainland China during the month. This was an increase of 7.5% from the prior corresponding period.

There was also a notable uptick in tourism from the United States. Australia welcomed approximately 65,800 visitors from the United States in May, up a massive 14.3% on a year earlier.

Three shares which I believe will be amongst the biggest winners from this increase in short term arrivals are listed below:

Mantra Group Ltd (ASX: MTR)

As one of Australia’s leading accommodation providers, I believe Mantra is in a great position to profit from the tourism boom. With visitor numbers growing fast, I expect demand for hotel rooms to increase greatly. I expect this to allow Mantra to enjoy both higher occupancy levels and higher room rates.

Star Entertainment Group Ltd (ASX: SGR)

Much like Mantra, I expect Star Entertainment to experience a sizeable lift in demand for its hotel rooms over the next few years. Furthermore, as Chinese tourism is a key driver of the tourism boom, I suspect its casinos could also be given a boost.

Sealink Travel Group Ltd (ASX: SLK)

As a provider of ferry services in locations that are popular with tourists such as Sydney Harbour and Kangaroo Island, I believe SeaLink is in a strong position to profit from the tourism boom. This isn’t the only tailwind the company is experiencing either. With oil prices falling and showing little sign of improving greatly, I feel SeaLink could see its costs fall and margins expand.

Another reason I like Mantra, Star, and SeaLink is that they all provide investors with reasonably generous dividends. Whilst their yields aren't as great as this hot dividend stock, they are competitive.

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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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