Hainan ‘eyeing further DF reforms’ as tourism surges

China Duty Free Group’s (CDFG) Haitang Bay International Shopping Complex generated $42m (+6%) during the last Golden Week of Chinese New Year in 2017.

Inbound tourism to China’s Hainan Province increased by 50% to 1.1m in 2017 as the island looks to further relax restrictions on duty free sales, reports the state-run Hainan Provincial TouriBsm Development Commission.

Growth of +21% in total tourism revenue to RMB81.19bn ($12.8bn) outpaced growth in total tourist numbers (+12%) to reach 67.5m year-on-year, reveals the provincial tourism development commission’s official Sunshine Hainan Network and Visit Hainan portal.

Meanwhile, foreign exchange income rose by a remarkable 95% year-on-year to total $681m dollars.

Addressing attendees at a conference earlier this week, Hainan Tourism Commission Director Sun Ying revealed Hainan has targeted 74m tourists this year, including 1.33m inbound tourists (+22.6%).

FURTHER ALLOWANCE REFORMS?

Alongside a raft of investment, reform and development initiatives such as developing the inbound tourism market, publicising visa-free policies and multi-modal transportation, Hainan will reportedly focus on six tasks in 2018.

These are said to include plans to promote further relaxations on restrictions of duty free sales, increase the current duty free ceiling, and unify duty free shopping policies for island tourists.

If the Commission’s aims materialise, this would represent a huge boost for the duty free business in Hainan and its two competing operations in Haikou and Sanya, the latter operated by China Duty Free Group.

As reported, the Chinese Ministry of Finance moved to double the special duty free allowance in 2016 to RMB16,000 ($2,432) for mainland visitors.

In an important development, China mainland’s official state-run Xinhua News Agency (xinhuanet) today reported that Hainan’s provincial finance bureau on Thursday confirmed sales for offshore duty free shops totalling approximately RMB30.59bn (US$4.7bn) for the province’s duty free programme since its launch in 2011.

The report adds that the two competing Hainan Island duty free shop operations in Haikou and Sanya received more than 9.7m customers with a per capita consumption of RMB3,133 ($495).

By LUKE BARRAS-HILL | Friday, 26 January 2018 12:04