CHINA. Hainan’s offshore duty free sector outperformed the tourism market by some distance last year, according to latest official statistics. The province received 64.55 million visitors in 2020, some -22.2% down on 2019, driven by the impact of the COVID-19 pandemic, particularly early in the year. Visitors from the Mainland declined by -18.6% to around 54.4 million, while numbers from Hong Kong, China fell by -79% to 2.72 million.
The number of overnight visitors to Haikou fell -23.3% and to Sanya by -24.1%,
Despite the reduction in arrivals, sales at Hainan’s offshore duty free shops (including tax-paid items) rose by +127% year-on-year in 2020 to around CNY32.74 billion (US$5.05 billion). The contrast between visitor numbers and sales underlines the dramatic success of Hainan’s enhanced offshore duty free shopping policy launched on 1 July, which tripled the annual allowance to CNY100,000 (currently US$15,470), expanded the number of categories (and cosmetics skus) and removed the previous CNY8,000 (US$1,235) single-purchase limit.
2021 has started well too. As reported, for the crucial seven-day period February 11 to 17 Spring Festival holiday period, total sales from the nine licensed stores 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.
Hainan received over 4.5 million visitors during the Chinese New Year holidays. The local hospitality industry’s revenue exceeded CNY5.8 billion (US$900 million) for the period. Hotel occupancy rates in Sanya hit 61% for the period while those in Haitang Bay – home to the CDF Mall within the Sanya International Duty Free Shopping City – reached 72% and Yalong Bay 74%.
Sanya’s tourism revenues exceeded CNY2.76 billion (approximately US$427 million) during the February 11-17 period, an increase of 141% year-on-year. Sanya Phoenix International Airport served about 338,000 passengers during the holiday week, with a daily average of around 48,000. The peak traffic occurred on 17 February with 63,000 passengers. Most flights came from Beijing, Shanghai, Guangzhou, Shenzhen, Chengdu and Chongqing.
The capital Haikou received over 1.17 million tourists during the holidays, up +607.87% on the COVID-hit 2020 equivalent. According to official figures over 1 million people visited Haikou’s key attractions, including its three downtown duty free stores. Tourism income for the holiday period increased by +432% to CNY1.29 billion (about US$200 million).
Note: Look out for our special Hainan-focused edition of The Moodie Davitt Magazine, out this week.
