Where are the Chinese?

Overseas Arrivals and Departures data from ABS last week. Apart from a few tweeters and bloggers recent trends in Chinese short term arrivals have drawn little interest. The kind of growth numbers we have seen in the past have sort of evaporated in recent months: Is the Chinese tourism boom to Australia coming to an end?

It’s worth looking at the ABS original raw data in comparison with the seasonal and trend measures:

China arrivals october 2018

Seasonal adjustment on the Chinese data is huge. Note that this isn’t just related to the Chinese New Year period on monthly data but also to July which also correlates with education purpose of visit.

The scale range there doesn’t quite display the growth slowdown. The slightly negative original monthly data for October is the first such month outside the monthly lunar new year fluctuations for quite a while. Flat periods have happened before most particularly the regulatory change around Chinese tour packages a few years ago.

What prompted this post was the release yesterday from Auckland Airport which seems to indicate a rather abrupt slowdown in Chinese arrivals over the ditch:

October:  -3.4%; Financial year to date: +2.1%; Rolling annual growth: +8.2%

This looks like something to watch to me.

 

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Population projections

The Queensland Government Statistician’s Office has updated population projections for local governments areas and statistical regions from SA4 to SA2 level. There are a few posts and comments on this floating around and Pete has the basic numbers for the region at Conus: Cairns projected growth

At SA4 level Nick Behrens tweeted a regional SA4 comparison graph. There are a few issues with regional comparisons between urban areas and SA4 but what I would look at in the weirdly organised QGSO collection of reports and files is this one:

population countdown

This graph is numbers of people and not percentage growth. I can’t find any information for download that relates specifically to this graph in the convoluted QGSO web nightmare but haven’t looked too hard.

There are two questions that stand out for me here:

  1. Net Overseas Migration estimates compounded appear to be less disparate between regions as a percentage than recent history would suggest but detailed numbers would be good.
  2. Intrastate migration is negative in areas without lifestyle proximity to Brisbane except Townsville. I would like to know the assumptions behind that.

 

There will inevitably be another response some time from Bill Cummings on this topic. While he typically raises a few good points his approach related to long term historical averages is also questionable: Cairns – Leading Population Growth in Northern Australia

Previous post: Population & Migration

 

 

 

Sydney Airport: the bounce that was

The October report from Sydney Airport today was somewhat different from Cairns Airport:

Sydney Airport CEO Geoff Culbert said, “We had more than 3.9 million passengers travelling through the airport during October. This has been the busiest month for 2018, with growth of 3.2 per cent compared to October 2017.
“International passenger traffic in October increased 6.0% compared to the prior corresponding period. Domestic passenger traffic also performed well growing 1.6%. This strong October result was driven by both seat capacity growth and stable load factors.
“Sydney’s fastest growing foreign nationalities included Japanese (13.0%), American (12.3%) and Indian (10.1%) visitors. Australian outbound international passenger growth also performed well increasing 8.6% for the month, with many Australians choosing to travel overseas during the September/October school holiday period.”

Now these are very different airports with a different mix of passengers. However, if anything this may indicate the recent underperformance gap at Cairns has not closed or may even have widened further.

Sydney provides this information because it is a listed public company. Cairns Airport has provided timely information superior to any other airport apart from Sydney that I am aware of in Australia. However given the relative significance to Cairns and issues around a controversial privatisation maybe it should. Cairns Airport has provided no commentary on monthly performance for two months now which is the first time I can recall .

The ABS Overseas Arrivals & Departures data was out yesterday with a few interesting things to look at.

Update: Sydney also provides excellent timely monthly data on international visitor traffic.

Sydney October

Cairns Airport: the bounce that wasn’t

Any anticipation of a bounce in October related to changes in school holiday timing were disappointed with another Friday dump of negative data. International +0.1%, domestic -1.2%, total -1.0% ex transits and transfers. I guess a less negative result could sort of a positive.

Airport Oct18

 

Should be some numbers and commentary from Sydney Airport next week to provide some comparison and general market context.

Previous posts: Cairns Airport: Friday dump; Cruising just above stall speed

Cruising just above stall speed

BITRE comparative airport data for the year to August 2018:

BITRE August 1

Cairns drops two places down the ladder at 1.4% ever so slightly behind Newcastle and Gold Coast.

Proserpine remains an outlier and should accelerate from here back towards the field even before Whitsunday shark scares. See last months post: What goes around

Huge winners for the month of August YoY though were Sunshine Coast +20.9%; Ballina +18.5%; Mackay +15.2% compared to the previous year. Nowhere else was although Tasmania is noted again with both Hobart and Launceston among the higher single digit performers for the month. In winter.

There are some differences between the BITRE data and Cairns Airport statistics but this comparative graph of annual passenger growth should be a concern:

BITRE August 2

Hopefully there will be some positive effect from increased accommodation capacity at the higher end of the market and any external shocks are avoided. Also that current crane activity rolls over into new projects.

Update on Experience

Experience Co held its AGM last week. The only thing usually to note from these events is the update since the FY2018 end.

FY19 1st QUARTER UPDATE
Experience Co Limited advise the following update for the period 1 July 2018 to 30 September 2018:
Passenger numbers: • Skydive (Australia and New Zealand) passengers are down 1.4% on same period last year (LFL) • Other Adventure passengers are up 1.6% on same period last year (LFL)
Based on the passenger numbers for the 1st quarter, together with the passenger bookings and processing during October to date, the business is tracking in line with management expectations and accordingly reaffirm FY19 guidance.

What to look at here is “Other Adventure passengers”. This is almost entirely the suite of Cairns tour businesses*. I’m not sure I would call 1.6% passenger growth on the previous peak season quarter an outstanding result. I think I would call it modest. As some businesses were acquired within the year I am assuming these are comparable numbers.

Experience Co has been an interesting ride for investors since the acquisitions into FNQ and the name change. Investors would now be down more than 50%:

Experience Update

I have repeatedly warned with every post that Experience Co is followed as an insight into an important sector of Cairns tourism and not investment advice. The lower share price will though constrain scope for further acquisitions.

* FNQ Cairns businesses: Raging Thunder; Reef Magic; Big Cat; GBR Helicopters; Tropical Journeys

No Nova News

News on the Nova development has gone quiet in the last few months. There was a media report of a meeting with construction tenderers at the beginning of August with “a couple of months” to appoint a builder.

I prefer to look at the regulatory disclosures from World Class Global to the Singapore Exchange which was released today for the September quarter.

Nova Q3

That equates to another four Nova unit sales for the quarter. Again there has been no comment on commencement of construction.

Weekend diversion: how would you know?

In the era of fake news and the identity politics tribal roll back of scientific credibility in public policy I sometimes return to an excerpt from Cranks Quarks and the Cosmos by Jeremy Bernstein in 1997.

From time to time I entertain myself with the following fantasy: The year is 1905. I am a professor of physics at the University of Bern. For many years, I have been teaching, probably from the same set of notes, respectable courses based on what is for me the familiar and comfortable physics of the nineteenth century. I teach the mechanics of Newton, the relatively modern theories of electricity and magnetism of James Clerk Maxwell, along with good solid nineteenth-century thermodynamics. I believe that atoms exist although I am troubled occasionally by the question that, around the turn of the century, Ernst Mach asked Ludwig Boltzmann: “Have you seen one?” All in all, it is a good, comfortable life. Then, with no warning at all, a series of physics papers begins arriving in the mail. They carry the return address of the Swiss National Patent Office in Bern. The covering letter identifies their author as a patent examiner-a technical expert “third class”-of whom I have never heard. He does not even have a doctoral title. Upon browsing through the papers, I discover that this doctorless unknown is claiming-using totally unfamiliar kinds of reasoning-that essentially all of the physics I have been teaching is wrong. Not just wrong in a few minor details, but fundamentally wrong. What would my reaction be? What should it have been? In short, how could I then have known that the author of these papers-the twenty-six-year-old Albert Einsteinwas not a crank?

Look it up. A horse can only be led to water …….