Increased risk that Chinese tourism will slow

In 2015 we saw a 22% increase in the number of Chinese tourist arrivals to Australia (to just over 1 million arrivals for the year, up 50% since 2011. With the Chinese economy seemingly finding a bottom, concerns over a depreciation of their currency fading, house prices rising and the impact of anti-corruption measures starting to fade, Goldman Sachs stated a month ago – that they believe there is increased risk that Chinese tourist numbers will start to slow. Given Chinese tourists spend 5x more on gambling per visit than the average tourist, they feel this impact would be most heavily felt across the domestic casinos. Qantas's recent comments suggested demand for domestic flights had softened considerably in recent months, and we expect this will likely have flowed through to weaker activity across a number of tourism-related firms that are now cycling higher comps. More detail on this theme see pg 14 of 'The Coppo Report'