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3 tourism shares that could provide market-beating returns

This morning the Australian Bureau of Statistics released its tourism figures for the month of November.

The great news for companies with exposure to the tourism boom is that more and more tourists are flocking to Australia.

According to the data, Australia welcomed 759,100 short term arrivals during November, up 7.2% from the corresponding period.

Once again the biggest driver of this growth was tourism from China. The number of Chinese tourists that visited Australia rose 13.9% on the prior corresponding period to 120,000.

Whilst this is a large number of visitors, it is still only a fraction of China’s tourist numbers.

In fact, thanks to the rising consumer class, CLSA estimated last year that total Chinese outbound tourism will reach 200 million a year globally by 2020.

As a result, I expect tourism into Australia will grow strongly for many years to come. Which could make the tourism sector a great area of the market to invest in.

With that in mind, here are three shares which I think could provide market-beating returns over the next few years thanks to the tourism boom:

Apollo Tourism & Leisure Ltd (ASX: ATL)

Australia is a big country and not all tourists want to sit by the pool all day. Those that want to get out and about to explore many of Australia’s tourist hotspots may opt for recreational vehicles. As a leading retailer and rental fleet operator of recreational vehicles, I expect Apollo will see demand for its vehicles increase strongly over the coming years.

Crown Resorts Ltd (ASX: CWN)

I think Crown could be one of the biggest winners from the Chinese tourism boom. Not only should Crown experience strong demand for its accommodation, but Chinese tourists’ penchant for gambling should mean a lot of traffic goes through their casino floors.

Event Hospitality and Entertainment Ltd (ASX: EVT)

Thanks to its accommodation brands Rydges, QT, and Thredbo Alpine Village, I believe the influx of tourists into Australia will put the company in a strong position to deliver above-average earnings growth in the long-term. I expect this to be driven by strong increases in average room rates and occupancy levels.

Lastly, here are three more shares I'm tipping to beat the market in 2018.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Crown Resorts Limited and Event Hospitality & Entertainment. 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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