MENU

Why these tourism stocks are set for another strong year ahead

Stocks that have ridden the boom in Chinese tourism are well placed to see their share price outperforming in 2018 as the number of visitors from our most important trading partner continues to soar.

Chinese arrivals through our airports has jumped by 24.8% to 3.2 million for the 12 months to January 2018, according to the latest data from the Bureau of Infrastructure Transport and Regional Economics (BITRE) that was reported in the Australian Financial Review.

I think the Chinese tourism boom will continue over the medium term at least as there is still plenty of room for growth even in the face of global trade tensions.

This is great news for the likes of Sydney Airport Holdings Pty Ltd (ASX: SYD) and Qantas Airways Limited (ASX: QAN) given their large exposure to this thematic.

While Chinese tourists are increasingly using airports in other Australia cities, Sydney is still a top arrival and departure point for these tourists.

Meanwhile, Qantas has a 16.4% hold on the international passenger market into Australia, according to BITRE. This makes it the market leader by a country mile with Jetstar (also owned by Qantas) in second place with a 9.1% share. In contrast, archrival Singapore Airlines has an 8.1% share.

But the interesting statistic that caught my eye was the total number of Chinese arrivals. While it has grown by the biggest clip compared to visitors from other countries, it only accounts for 8% of the total.

The number of visitors from much smaller countries like New Zealand is 7.1 million and Singapore is 5.4 million.

This suggests that Chinese tourists can continue growing at robust double-digits for quite a while yet, especially given that Chinese nationals consistently rate Australia among the top destinations to visit. This is unlikely to change with a Sino-American trade war unless that cripples the Chinese economy (which I think is unlikely).

I was at the Victorian town of Healesville (a tourism destination for the animal sanctuary) over the weekend and boy has it changed. It’s no longer the sleepy place I remembered and I strongly suspect it may be benefiting from this very thematic.

The Chinese tourism boom could also bring much-needed relief to other tourism-related stocks that have been under significant pressure lately. This includes theme park operator Ardent Leisure Group (ASX: AAD) and casino group Crown Resorts Ltd (ASX: CWN).

There is another boom that has only just started, according to the experts at the Motley Fool. They are very bullish on the outlook for this niche sector and have produced a free report to highlight the opportunity to share with investors.

Click on the link below to get your free copy and to find out what stocks are best leveraged to this upcoming boom.

Don’t Buy A SINGLE Stock Until You Read This

While conflict overseas is all media talking-heads seem to mention these days, the billionaire founder of Tesla is losing sleep over what he sees as a far bigger threat.

Elon Musk Warns: This has “vastly more risk than North Korea”

If you missed your opportunity to get in on Google, Microsoft, or Amazon in their early days, don't let it happen again. This emerging technology trend could offer a second chance for anyone who wishes they took part in these millionaire-maker stocks.

Click here to discover more!

Motley Fool contributor Brendon Lau 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.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…

Including:

The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!