Hainan is Hainan: “China’s Hawaii” set to go its own way

By Brady Fox

Beijing has big plans for Hainan, as unveiled last week. Alongside ambitious investment and economic policies that aim to turn the country’s youngest province into a critical piece of its future, it was also announced that Hainan will allow 30 day visa-free visits for residents of 59 countries, including the United States. This gives us a moment to pause and reflect on Hainan’s place among top tourist destinations worldwide, and whether it can make the leap from domestic to international destination.

Hainan is often compared to Hawaii, known variously as “China’s Hawaii,” “The Hawaii of the East,” and other iterations. And certainly, the two share many traits; white beaches, a mild climate, and swarms of domestic tourists define the experience at each. But despite the many similarities, Hainan is unquestionably its own animal.

A photo shows an aerial view of the city of Sanya, Hainan province January 25, 2018. [Photo: dfic.cn]

For one, there’s the matter of scale: the Chinese government has set a goal of getting 80 million tourists (including 1.2 million international visitors) to the island by 2020. By comparison, Hawaii attracted just 8.6 million visitors in 2015, about 5 million of which were from the United States. The level of domestic tourism is remarkable, even when weighed by population. Hainan’s tourism revenues totaled USD $12.8 billion in 2018, just 25% behind Hawaii’s USD $16.8 billion. And as demand dictates prices, the extreme domestic appetite has thus far helped maintain Hainan as a destination largely for Chinese citizens - its longstanding popularity among Russians notwithstanding.

Hainan is also a centre for large-scale residential and business development the likes of which are found in few places outside of the Gulf States. While Hawaii boasts a quaint luxury, Hainan’s top destinations in particular are built to wow and impress. It is this penchant for spectacle that makes Hainan at times more comparable with Dubai than with Hawaii. One needs look no further than the Nanhai Pearl Island development to sum up Hainan’s unique brand of natural, Oriental, and just a little bit gaudy.

The question is how well this will translate to an international market. Hainan is largely developed for Chinese tastes. While millions of foreigners arrive to see Shanghai and Beijing every month, the residents of those cities are planning their own trips to Hainan to get away from it all. While Hainan boasts an impressive international airport, the majority of flights are coming from within China, and the experience has been shaped by catering to this specific crowd.

White beaches simply are not what many foreigners picture when they think of China, or what they aim to see when visiting there. International tourism in China is traditionally built on its incredible historical sites, but also increasingly exploration of its vibrant metropolitan centres. The Great Wall, The Forbidden City, The Bund and The Yellow Mountains make up the experience of many short term visitors to China. The question is, how will Hainan, 2 thousand kilometres south of Shanghai, fit into the existing travel ecosystem?

Hawaii, for example, has always benefited from its position in the middle of the Pacific and separation from major competitors. A destination of choice for North Americans on the west coast, its status has been boosted by the connections with California, with Hollywood, and the resulting preeminence in film and television. It has always been a major tourist destination for Japanese, too, as a safe, direct destination from Beijing. It is the birthplace and mecca of surfing.

For Hainan, things are more competitive. There are numerous gorgeous beach destinations throughout neighboring Southeast Asia. Vietnam, the Philippines, Indonesia and Malaysia are all just a stone’s throw away and have continued to boom in recent years. The elephant in the room, Thailand, is still the number one tourist destination in the entire Asia Pacific, still holding a narrow lead on the entirety of China.

There are a lot of things to like about Beijing’s approach. Unquestionably, one great win generated by loosening visa restrictions is to make Hainan more attractive for international conferences and events. Establishing a free port and encouraging businesses to set up headquarters in the province could transform Hainan into a regional centre and could push it to the forefront of China’s continuing economic liberalization. The government was also smart to pair its plans for Hainan’s future with restrictions on speculative investment.

Challenges abound, however, and Hainan has always had occasional issues with reputation. It was once considered a backward region, serving as a place of exile for disgraced or failed officials. Today, it struggles with a reputation for being overpriced, crowded, and a playground for noisy elite. For all its success as a domestic destination, the international market will be difficult to capture, and it may not be a natural complement to China’s current international tourism ecosystem.

Regardless, the Chinese government has shown ambition to match the island’s potential. The vision of a marriage between business and beauty has few international comparables. The term “China’s Hawaii” no longer seems appropriate. Hainan is Hainan, and the world will soon learn exactly what that means.

(Brady Fox is a Canadian expert on Asia Pacific affairs.)