Guangdong Province leads demand for travel to Hainan as offshore duty free spends soar, says ForwardKeys

CHINA. Bookings for travel to Hainan Island over the forthcoming Chinese New Year period are strongest in Guangdong Province, according to leading travel analytics company ForwardKeys. The latest data is based on issued tickets for the forthcoming holiday period.

Guangdong and Beijing lead bookings to Hainan for Chinese New Year, but travel restrictions have slowed momentum in the latter (click to enlarge)

However, fears over the spread of COVID-19 have hit bookings from some regions in recent weeks, said the analyst, with tickets issued in Beijing slowing in particular compared to a year ago. Around 1.6 million people living in the Daxing area have been ordered not to travel unless they have special permission and produce negative COVID-19 test results within three days before their trip.

ForwardKeys’ Xiamen-based China Market Expert Nan Dai said: “Looking at the ticketing history for Chinese travel to Hainan it is more evident that fewer people are buying tickets over the past few weeks, due to the recent regional outbreaks and strengthened government measures to discourage travel amongst the provinces.

But Dai added: “The Chinese government has more experience in dealing with the outbreak situation now and people have started to administer the vaccine. I believe when the Winter is gone, the outlook for Chinese domestic travel in Summer is still optimistic.”

Average transaction values have climbed since the widening of allowances and spending thresholds, noted ForwardKeys (click to enlarge)
Hainan’s status as the world’s travel retail hotspot – underlined by our story today about sales projections for 2021 – is reinforced by data about transactional spend from ForwardKeys’ Chinese Shopper Tracker. The analyst said that the average transaction value in offshore duty free reached US$589 in December compared to US$435 a year earlier.

The share of those spending more than US$1,000 also increased from 9.9% in December 2019 to 14.3% in December 2020, as allowances were increased and spending limits raised from 1 July.

“This confirms that not only are more duty free purchases being made in Hainan but also at a higher price point,” said Nan Dai.

In the past three months, Chinese Shopper Tracker data shows that beauty is still the leading category, broken down by skincare (20.7%), makeup (13.4%) and fragrances (8.6%). Other categories are taking advantage of the new allowances in Hainan, such as electronics (17.4% share) and spirits (8.4% share).

Hainan Island: Travel retail’s global hotspot

The Moodie Davitt Report will publish a Hainan Island Special Report with the China edition of The Magazine in February 2021. Written by Martin Moodie and Dermot Davitt, it will explore how the offshore duty free business in China has become critical to the world’s leading brands across many categories.

海南:旅游零售业的全球焦点

穆迪戴维特报告(Moodie Davitt Report)将于2021年2月随The Magazine的中文版发表《海南特别报道》。该篇由马丁·穆迪(Martin Moodie)和德莫特·戴维特(Dermot Davitt)撰写,将探讨中国的离岸免税业务是如何变得对跨类别的各大全球领先品牌至关重要。

报告将覆盖以下内容:

  • 评论与分析自2020年7月1日起,海南新离岸免税政策所引起的重大影响
  • 从美妆个护到时尚、钟表,从葡萄酒、烈酒到消费类电子产品的跨类别离岸免税额的潜力
  • 中免集团,中服免税店,DFS集团,Dufry, Hainan Development Holdings, 海南旅游投资发展公司,海南省国际经济发展局(Hainan IEDB),Wangfujing,拉加代尔旅游零售等集团的重要访谈和简介,尤其着眼于颇具潜力的海南免税店贸易港项目
  • 除海南外,我们还将考察中国国内市场的反弹情况,评估中国机场的前景,并希望终有一天能够恢复国际旅游通行,拥有来自内地,澳门和香港市场的领先旅游零售商的输入
  • 电商驱动力:评估旅游零售业的长期市场领导者Dufry与数字巨头阿里巴巴;以及CDFG和其他主要参与者,是否具备达成合作伙伴关系的潜力
  • 顶级旅行分析师ForwardKeys的专业意见
  • 在内容合作伙伴Globuy,iClick,Jing Daily,Jessica’s Secret和DutyFreeExpert的帮助下,分析有关中国消费者和免税市场的趋势

The report will feature:

  • Comment & analysis on the seismic impact of the new offshore duty free policy in Hainan since 1 July
  • The potential of new offshore duty free allowances across categories from beauty to fashion and watches and from wines & spirits to consumer electronics
  • Major interviews with and profiles of China Duty Free Group, CNSC, DFS Group, Dufry, Hainan Development Holdings, Hainan Tourism Investment Development Co, Hainan Provincial Bureau of International Economic Development (Hainan IEDB), Lagardère Travel Retail, Wangfujing and others, with a special focus on the ambitious Hainan Free Trade Port project
  • Beyond Hainan, we examine the rebound in the China domestic market, assess prospects for Chinese airports and hopes for an eventual return to international travel. With input from leading travel retailers in the Mainland, Macau and Hong Kong markets
  • The ecommerce drive: Assessing the potential of the partnership between travel retail’s long-time market leader Dufry and the digital powerhouse Alibaba; plus digital strategies at CDFG and other major players
  • Expert input from top travel analyst ForwardKeys
  • With contributions from our content partners Globuy, iClick, Jing Daily, Jessica’s Secret and DutyFreeExpert on trends among Chinese consumers and the duty free market

Contact Irene@MoodieDavittReport.com to partner with The Moodie Davitt Report for this special edition.

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