Every time I take a plane from my local airport, Hong Kong International, it seems to be busier and busier.
The total number of Chinese travelers heading out of the country last year was 128 million, up 10% year on year. So far in 2016, destinations such as the Philippines and Malaysia are seeing the number of arrivals increase by as much as 50%.
This has not been a good thing for Hong Kong. It was the first destination that mainland Chinese tourists targeted. But now there's a "been there, done that" mentality. Retailers here have been hammered, and rents have plummeted, as the mainland consumers sought farther afield.
It is stocks in Australia, Thailand, South Korea and Japan that will benefit. There are now more than 1.0 million Chinese travelers visiting Australia each year, and it's the space on the airplanes, not the urge to travel, that is restraining more than that number from visiting. They spent almost A$10 billion ($7.5 billion) last year, and the figure is only likely to rise with the number of visitors.
In Japan, the number of Chinese inbound arrivals doubled in 2015 to 5 million, up from 2.4 million in 2014. The Hong Kong-base brokerage CLSA envisions that will increase by 2020 to 11.4 million.
South Korea is a very attractive market to Chinese tourists because it is close by, considered "safe" from a terrorism and personal security point of view and is cheaper than destinations in Europe.
Thailand is even cheaper. The number of Chinese tourists heading to Thailand has grown at an annualized rate of 47.7% over the past five years, while other sources of tourists have increased only 7.6%.
Samsonite (HK:1910) and Ctrip (CTRP) are two ways to play these trends. Samsonite has a 10% share of the world's luggage market. That is a highly fragmented environment, so there is plenty of room for expansion, brokerage firm CLSA believes.
The brokerage says that Ctrip is "the best outbound travel play in China." It has partnered with both Priceline (PCLN) and Expedia (EXPE), owns the agency Eztravel in Taiwan, has a cruise joint venture and also owns Wing On Travel in Hong Kong.
CLSA believes that by 2020 we will see 200 million outbound Chinese travelers. It has a list of 21 companies that it believes will benefit, including the casino operators Genting from Singapore, Crown from Australia and Las Vegas Sands (LVS). Infrastructure companies such as Japan Airport and Sydney Airport. will also clearly benefit.
It's only likely those operators will be hearing more and more customers, and staffers, saying "Xie xie."