Hainan's "2019" return: the number of tourists exceeded the number before the epidemic, and this sales figure is three times higher than the original

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Hainan’s “2019” is back. This year’s Spring Festival, Hainan’s number of tourists more than the epidemic before 2019, tourism revenue has also recovered nearly 70%. And Hainan’s “special” duty-free stores, but also finally wait for the expected crowd. A tourist told reporters that everyone is piling up to try the color number, ask the price, they were waiting to pay the queue to dissuade, “offline look directly online to buy, and then self-pick up. Data show that during the Spring Festival, the total sales of the province’s 12 duty-free stores on the outlying islands have tripled compared to the same period in 2019.

The high season passenger flow drove the recovery of the duty-free industry, and the sales of Hainan’s off-island duty-free stores during the Spring Festival achieved “open door”, collecting nearly 1.7 billion yuan in five days.

In an interview with Caixin, Yifu Fu, a senior researcher at Xingtu Financial Research Institute, said that, referring to the experience of other countries, the consumer market can rebound steadily after the epidemic is released for one to two quarters, and many cities in China have already passed the peak of the first wave of new crown infection, and the whole economy is expected to rebound comprehensively in the second quarter of this year. In addition, Hainan duty-free merchants are also making business innovations, including actively expanding online channels, optimizing the supply of duty-free goods, and creating offline immersive consumption scenes, which will help drive the growth of duty-free consumption from the supply side, superimposed on the bonus of Hainan’s free trade port policy, and the positive trend of Hainan duty-free consumption is expected to continue under the resonance of multiple factors.

In the Spring Festival of the year of the rabbit, “travel for the New Year” is very popular, tourists flock to many popular destinations in China, Hainan is also one of the options. According to the statistics of Hainan Tourism and Culture, Radio, Television and Sports Department, this year’s Spring Festival holiday, the province received a total of 6,393,600 tourists, an increase of 18.2%. The total tourism revenue was 9.298 billion yuan, an increase of 23.5% year-on-year.

And the 2019 Spring Festival Golden Week 7 days, the province’s tourism received 5,823,900 tourists, total tourism revenue of 14.375 billion yuan. This also means that the number of tourists in Hainan this Spring Festival has exceeded that of 2019 before the epidemic, while tourism revenue has recovered nearly 70%.

Flying Pig data shows that the number of orders for vacation goods during the Spring Festival in Hainan has increased by 24% year-on-year.

Haikou and Sanya, the two major concentrations of Hainan’s off-island duty-free store layout, also saw a large release of passenger traffic. Haikou Meilan International Airport, a subsidiary of Hainan Airport (600515.SH), saw the number of passengers exceed 80,000 on a single day for three consecutive days (Jan. 24-26) and carried 87,000 passengers on the 27th, ushering in the peak of flights during the Spring Festival Golden Week; Sanya Phoenix International Airport is expected to carry 2,738,000 passengers during this year’s Spring Festival, up 7.7% year-on-year.

The return of crowded enthusiasm, the long queues of buying scenes, all convey the enthusiasm of consumers shopping. A number of interviewees said that this year’s Spring Festival in Hainan everywhere crowded, “buy water to buy popcorn have to queue”.

During this year’s Spring Festival, Hainan’s off-island duty-free stores launched various consumer “gift packages” and fancy promotions to attract customers, while the high increase in the number of tourists further drove Hainan’s off-island duty-free consumption to heat up. According to the statistics provided by the Department of Commerce of Hainan Province, the total sales of the 12 off-island duty-free stores in the province were 1.685 billion yuan in the first five days of this year’s Spring Festival holiday (January 21 to 25), an increase of 20.03% compared with the first five days of the Spring Festival in 2022 and an increase of 325% compared with the first five days of the Spring Festival in 2019.

Among them, the total sales of 6 off-island duty-free stores in Haikou and 4 off-island duty-free stores in Sanya reached 470 million yuan and 1.158 billion yuan respectively, an increase of 641% and 253% compared with the five days before the Spring Festival 2019.

Mr. Che, who went to Hainan for “duty-free shopping” during the Spring Festival, told Cai Lian News Agency, “The site was super crowded and red-hot, with queues for payment and airport pickups, all in big bags.”

The first trading day of the year of the rabbit in Hong Kong on January 26, China CDFG (01880.HK) rose more than 8% by the close of trading, and continued to record a closing gain on the 27th, once touching HK$280 during the day, with the Hong Kong share price hitting a new record high.

It is understood that Hainan’s off-island duty-free sales accumulated over 130 billion yuan in five years, and strive to exceed 80 billion yuan in annual duty-free sales in 2023. Wangfujing International Duty Free Port, a subsidiary of Wangfujing (600859.SH), has been opened for trial business on January 18, just in time for the peak sales season, and may contribute incremental performance to Hainan’s duty-free industry.

Huatai Securities expects that the long-term suppressed demand for cross-district travel will be released centrally in 2023, and the peak season is expected to be extended this year, further driving the recovery of the duty-free boom on the outlying islands, which will also drive the valuation of leading enterprises upward.

It is worth noting that the Ministry of Culture and Tourism recently issued a notice deciding to resume, on a pilot basis, the operation of outbound group tours and “air ticket + hotel” business for Chinese citizens to relevant countries by travel agencies and online travel enterprises nationwide from February 6.

“The resumption of outbound tours is bound to impact Hainan’s duty-free market on the outlying islands.” Zhou Di, a whale platform expert, said a statistic shows that the increased cost of travel to Hainan during the Spring Festival may have exceeded the cost of going to Thailand, Singapore, Malaysia and other Southeast Asian regions. After the liberalization of outbound travel, after the choice may be more inclined to outbound travel. At this time Hainan outbound duty-free more to establish their own characteristics, the formation of shopping centers with special characteristics, making similar products in Hainan than other areas, to create Hainan brand.