CHINA. Hainan’s offshore duty free sales soared during the crucial Chinese New Year Spring Festival holiday period, according to statistics provided by the Hainan Provincial Department of Commerce and provided to The Moodie Davitt Report by Hainan Daily.
For the seven-day period February 11 to 17, total sales exceeded CNY1.5 billion (US$231.9 million), of which duty free items accounted for around CNY1.4 billion (US$216.5 million) – an approximate doubling of revenues from the equivalent holiday period in 2019 (pre-COVID). Duty paid items accounted for the balance.
Heavy marketing and promotional activities – including significant discounting – from the nine offshore duty free retail operations helped drive the result. So did the recently introduced postal delivery scheme which allows shoppers to have their goods mailed back to the Mainland instead of having to carry them.
According to Hainan Daily, China Post mailed a total of 1,046 duty-free items for the days from 11 to 16 February.
The results underline the tremendous momentum underpinning Hainan’s offshore duty free sector. Some analysts had picked a slowdown in sales due to the recent COVID-19 outbreaks in northern China and resultant travel restrictions placed on certain areas.
However, flights to both Sanya and Haikou surged from 1 February as locally transmitted case numbers fell away almost totally, according to leading travel analyst ForwardKeys.
Our special correspondent in Sanya, whose pictures are featured above, noted at the weekend: “It seems busier than I personally have ever seen it. Although local folks are saying travellers may be down -30-40%, I am guardedly optimistic that… retail sales in Hainan travel retail will hit records [this CNY].” His view was emphatically confirmed by the latest results.
NOTE: Look out for our blockbuster special Hainan edition of The Moodie Davitt Report Magazine next week post the Chinese New Year holidays.
ForwardKeys Analyst, Antoine Vialle told The Moodie Davitt Report on 17 February: “The forward ticketing situation is at 50% of 2019’s levels (compared to tickets issued at the same time in 2019). With many last-minute bookings being made, I expect the situation to keep improving. The average lead time has dropped from 35 days in 2019 to 27 days this year, with tickets issued within four days of departure increasing a whopping +186.7% compared to 2019. Tickets issued within two weeks of departure accounted for 57% of all CNY bookings as of 9 February.”
He added: “Sanya and Haikou have nearly exactly the same share and YoY variation. Sanya is at -67.9%, with a 48.0% share vs Haikou at -66.6%, a 47.8% share.”
