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3 ways you can profit from the tourism boom

Earlier this month the Australian Bureau of Statistics released its tourism data for the month of January.

That data revealed that the Australia welcomed 753,700 international visitors to its shores during the month, an increase of 5.7% on the prior corresponding period.

While Chinese tourism has been one of the biggest drivers of this growth, it is worth noting that Australia’s share of the entire Chinese outbound tourism market is still only very small.

I believe this is an indication that the Australian tourism boom could last for many more years.

In light of this, I think having exposure to the boom could be a great idea for investors. Here are three ways you could do it:

Apollo Tourism & Leisure Ltd (ASX: ATL)

Australia is a big country and not all tourists want to sit by the pool or at the roulette table 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. Yesterday the company reported pro forma half-year net profit before tax of $17.2 million, up 63.2% on the prior corresponding period.

Crown Resorts Ltd (ASX: CWN)

For the tourists that do want to lounge around the pool, hit up the shops, or put money on red at the roulette table, Crown Resorts has everything they need. I believe that demand for its hotel rooms will rise strongly over the next few years as the tourism boom accelerates. This should put the resort operator in a strong position to profit from higher occupancy levels and average room rates.

Sydney Airport Holdings Pty Ltd (ASX: SYD)

As the main gateway to Australia, I believe Sydney Airport will be a big winner from the tourism boom. I expect this will allow the company to continue growing earnings and its dividend at a solid rate for the foreseeable future. One key risk, though, is rising bond yields. Sydney Airport’s shares are often used as a bond proxy. So with bond yields widening, there is a danger that its shares could come under pressure over the coming 12 months.

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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 Sydney Airport Holdings Limited. 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 Scott Phillips.

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