Will Chinese visitation ever recover post Covid?

The pandemic has halted international visitation in its tracks but questions remain whether Australia will ever see a return of its biggest overseas market, China, to pre-pandemic levels.

Prior to the pandemic the number of Chinese visitors seemed to have flattened, up only 6 per cent in 2019 compared to the previous year.

But since the borders closed there has been a deepening rift between China and Australia as geopolitical tensions rise.

The Chinese government has been vocal in its condemnation of Australia particularly over Canberra’s criticism of China’s handling of the coronavirus pandemic.

But when borders do open Australia will need every overseas visitor it can lure after a massive surge in hotel investment.

Speaking to the South China Morning Post, Max Cooper, from Savills Australia and New Zealand, said international travel “will remain a very important element for Australian tourism”.

“Likely there will be some shift in international travel patterns over the short to medium terms,” he said.

“Investors consider there will be a full recovery but the timing of that recovery will somewhat depend on the market.”

One ominous sign that China may not be so keen to return Down Under is the decline in Chinese investment in Australia’s hotel properties.

According to Real Capital Analytics, Mainland Chinese investors have been winding down their interest in Australian hotel properties, slipping from the second biggest investors in 2017 with US$179 million worth of deals to the third-largest investor group in the segment, spending US$26 million and US$48 million, respectively.

“We generally see the main markets fully recovering over a two to three year period,” said Cooper.

“Those markets that are less reliant on inbound business such as Adelaide and Canberra are currently fast tracking to full recovery.

“Sydney and Melbourne have been the most Covid-19 impacted cities in Australia and also have a higher proportion of international tourism which is likely to result in a slower recovery to pre Covid-19 trading levels.”