Why China’s Hainan island is the elephant-in-the-room

Why China’s Hainan island is the elephant-in-the-room

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Is Hainan island the elephant-in-the-room among coastal tourism destinations in Asia? In others words is it so big that you can’t ignore?

If you’ve been following the news feed, the first half of 2013 were a series of announcements out of Hainan that should be considered seriously. Alone, these announcements are not convincing until you see how the rest of Asia compares against Hainan. If you’ve had time to digest the recent post Comparing Asia’s Tourism Coastlines you’ll begin to see why there’s a lot more substance behind the words. Its not just what’s being said but also the impact of the large population base and second largest economy focused on a limited tourism coastline.

High Level Announcements

In April 2013 when Chinese President Xi Jinping visited Hainan he said: “Accelerating the development of Hainan as an international tourism island is a key decision made by central authorities . . .”. He further added that Hainan island, “As China’s biggest special economic zone that was approved by China’s top legislature in 1988, the island province enjoys late-comer advantage and has great development potential”. Read more about what President Xi said here about Hainan.

Alongside President Xi’s statement on Hainan Executive Deputy Governor Tan Li of Hainan province also stated that: “In 2009, the island province was put on the list of national strategies for development as an International Tourist Destination. In the past three years, the province has been No 1 in growth of fixed-assets investment, averaging more than 32 percent annually. Much of the investment went to construction of infrastructure – hotels, high-end commercial estates and tourism facilities – all expected to further improve the conditions of its tourism industry.”. Read more about what Deputy Governer Tan to say here.

Chinese Media Support

The tourism media has also followed in line by voting Sanya (Hainan’s main city) the most popular tourist city for 2012.

Domestic Tourism Demand

On the tourism demand side the Chinese island is also the top coastal choice for young Chinese graduates on vacation as well as the 140 million strong post 90s generation. It’s also the country’s most preferred MICE destination.

Significant  Domestic Arrivals

According to the World Travel & Tourism Council report ‘Hainan Tourism Development Potential 2011-2025′ the island had 25 million domestic visitor arrivals in 2010. That’s approximately equivalent to the international arrivals into Malaysia for 2011. Likewise What’s on Sanya reports that from January to July of 2012 there was close to 18 million domestic arrivals.

Planning and Infrastructure

To support the development of the island there have been several planning and infrastructure related news. These include the expansion of the sewage treatment network in Sanya, regulations for coastal development, new planning adopted for the Haipo district in Sanya.

Compare this against Phuket and Bali, the other two large destinations in Southeast Asia, where there has been continued problems with waste water management and very poor land and coastal development controls you get a sense of who is more serious about coastal tourism development.

Development of the Cruise and Yacht Industry

It comes across that there’s also a lot of effort going into the development of the cruise and yacht industry. Some recent news:

Parallels with USA-Hawaii

The development of Hawaii is undoubtedly linked to the USA. As China further develops as an economic power will we see parallels between China-Hainan and USA-Hawaii? In other words will Hainan gain even more prominence as a domestic and international destination? The land mass of Hainan at 34,000 square kilometers is not too different from the Hawaiian islands at 28,000 square kilometers. Phuket and Bali are small in comparison. For a country with over a billion population I won’t be surprised that Hainan can turn into a massive destination.

Implications for the rest of Southeast Asia

China’s emergence is positive for Asia tourism overall. However, its undeniable that the presence of Hainan reduces outflow of visitors to other coastal destinations in Asia. The 20 plus million domestic tourist visiting Hainan annually means they did not visit Vietnam’s or Malaysia’s coastline.

Additionally, even though Hainan is still predominantly a domestic destination, at some point in future its going to have regional ambitions and starts targeting international tourist. When it does, will people that previously settled for, say, Phuket seek out Sanya instead?

The short term good news for its regional competitors are that aside from hotels Hainan still does not have the all encompassing attractiveness of its neighbors. According to Rene Shillings: “The island (Hainan) has focused to one-sided on just building the resorts but lack a lot of other tourism infrastructure . . . what Hainan also lacks is an identity. As a destination in China, it can not compare with the typical tourist must-see-must-do locations like Beijing, Xian, Shanghai. As a resort location, it offers pretty much the same product as too many others; 5* hotels, sun & sandy beaches. Good for a getaway holiday but after that it is: Hainan; been there, done that, bought the T-shirt.”

Time will tell whether Hainan develops into a multi-experience destination with its own distinct coastal identity. But one thing you can’t deny – its big and its got the central government behind it.

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