The Xinhua News Agency (Xinhuanet) reports that Haikou Customs has confirmed sales revenues equivalent to circa $842m from the Hainan Province duty free programme in 2015, with the two competing operations serving around 1.64m customers with over 6.49m products last year.

 

This huge business also looks set for a major boost this year, following the Chinese Ministry of Finance’s decision to approve the doubling of the special duty free allowance to CY16,000 ($2,432). This is available for mainland nationals visiting the holiday resort of Hainan Province.

 

This was also been reconfirmed by Wang Huiping, Deputy Director of the Hainan Provincial Finance Bureau last Friday (29 January) and it formally comes into force tomorrow (Monday 1 February) although it has been anticipated for several months.

 

This allowance increase will apply to both Hainan Island duty free operations in Haikou and Sanya. The latter is operated by the China Duty Free Group and it now claims it is the biggest off-airport duty free store in the world.

 

 

Meanwhile, Hainan Duty Free has worked with DFS for many years and had hoped to open a huge project at Mission Hills on Hainan Island, but this has since stalled with DFS stepping back from the project and continuing to support the existing operations – including the airport duty free shops.

 

Both these off airport operations will also be permitted to create online stores for the first time to allow visitors to order their duty free goods and collect them at the airport on departure. According to comments attributed to Wang, the previous restrictions on local resident allowances are also being removed.

 

Last April, Haikou Customs reported that duty free sales through Hainan’s two duty free operations had generated more than CNY13.4bn ($2.2bn) since the special duty free programme began back in 2011.

 

The initial opening followed the direct decree from China’s State Council [the Chinese cabinet office-Ed] that special allowances should be permitted to help build Hainan into a world-class tourist destination by 2020.

 

 

As China’s largest ‘tropical island’, Hainan is popularly known as the ‘Hawaii of Asia’. It attracted 53.36m tourists in 2015, an increase of 11.4% over 2014, according to the state-owned ‘Visit Hainan’ promotion agency and the Hainan Tourism Commission.

 

In a statement, HTC Director Sun Ying also confirmed that tourist spending last year totalled CY57.2bn ($8.9bn), corresponding to a 13% rise on 2014. He also added that the authorities have effectively cracked down on some tourism companies who were caught taking advantage of tourists. Nine agencies apparently had their licenses revoked in 2015, receiving total fines amounting to CY6.83m ($1m).

 

Meanwhile, the China International Travel Service Co., Ltd (which owns China Duty Free) and the local Sanya authorities have signed a strategic cooperation agreement to boost business by building a lake island which will include a large F&B area, plus cultural and entertainment attractions.

 

[The Xinhua News Agency Xinhuanet is the Mainland Chinese Government’s official news agency, which advertises its mission to ‘Publicise China and Report the World’].