Hainan Free Trade Port to become international tourism center

Continued efforts to promote the building of the Hainan Free Trade Port as an international tourism center, with a focus on improving the international competitiveness of its offshore duty-free sales, will help the tropical island attract more tourists, experts said. After China optimized its Covid-19 policy and resumed cross-border travel in January after nearly three years of suspension, Chinese consumers have shown a growing demand for traveling abroad. “With China optimizing its entry measures, Chinese passengers' confidence to travel is rising and many overseas destinations have introduced favorable measures to attract Chinese tourists,” said Chen Yin, President of the China Tourism Group and a Member of the 14th National Committee of the Chinese People’s Political Consultative Conference (CPPCC). “In this context, the building of Hainan as an international tourism consumption center may face some challenges in the future. We suggest that Hainan continue to strengthen the attractiveness of its offshore duty-free shopping by expanding its scale, launching more brands, expanding online sales channels, and upgrading services,” Chen said.

Since the opening of the first duty-free shopping store in Hainan's Sanya in 2011, the total sales revenue of duty-free products in the province exceeded CNY100 billion, and the average annual growth rate reached 44.6%, according to the local government. After the implementation of off-shore duty-free shopping policies in Hainan, detailed rules have been adjusted eight times, making duty-free shopping a golden ticket for Hainan.

Meanwhile, Chen proposed that to support further development of offshore duty-free shopping, more domestic brands should be encouraged to establish a presence at off-shore duty-free stores and further consolidate the leading position of China’s duty-free enterprises globally, which will help further strengthen Hainan’s attractiveness as a consumer market. Chen also suggested that to further drive inbound travel and leisure consumption to Hainan, the government may accelerate the trial opening of the “Seventh Freedom of the Air” for passenger and freight transportation in the province. The Freedoms of the Air are a set of commercial aviation rights that grant a country’s airlines rights to land in another country.

Major duty-free operators have continued to increase their investments in Hainan. Late last year, China Duty Free Group, an affiliate of the China Tourism Group, opened a new shopping complex in Haikou, the provincial capital of Hainan. Chen suggested the launch of more high-end hotels in the island province and further improving the construction of urban rail transit systems. He proposed to give full play to the Haikou International Duty Free Shopping Complex and to create a new growth model that combines tourism, art performances, sporting events, duty-free shopping and leisure consumption.

At the same time, the Hainan FTP is set to continue to play a crucial role in China’s luxury goods market, with sizable sales in offshore duty-free luxury products, the China Daily reports.