Hainan can make more of its appeal

Island needs administrative reform to ensure its natural resource advantages become a competitive edge in the international tourism market

In December the implementation plan to turn Hainan into a world-class tourism destination was officially released, outlining specific targets and measures to upgrade the island province into an internationalized center for tourists and consumers.

Currently, the major challenge facing the transformation of Hainan into a center of international tourism is the shortage of internationalized products and services that cater to the demands of visitors.

In the third quarter of 2018, according to the tourism department of Hainan, the per capita daily spending of overnight visitors to the island was just 814.85 yuan ($118.95). Of that figure, the spending for basic items such as transportation, accommodation and catering accounted for 70 percent, while shopping, entertainment, tailor-made services and rental services only accounted for 22 percent.

Therefore, to build the province into a center of international tourism, the focus should be on innovating institutional mechanisms, optimizing the developmental environment and expanding the tourism consumption market. The island should actively explore new ways to develop a consumption-driven economy, and seek to establish itself as an international tourism destination boasting unique features. Against the backdrop of domestic consumption upgrading, people now favor lifestyle tourism featuring memorable experiences, healthcare, culture and sports.

The implementation plan issued in December listed a number of major tasks to build Hainan into an international tourism destination. These include expanding the space for the development of tourism consumption, introducing innovative modes of tourism consumption, improving the quality of tourism services and creating a tourist-friendly environment, among other things.

Given this, Hainan should foster new ways to stimulate visitor spending.

First, the province should accelerate moves to adjust its duty-free shopping policy to meet the needs of tourists. Thanks to the tax exemption policy implemented over the past seven years, total sales volume has reached 37.59 billion yuan in the region, but there is the potential for that figure to go higher.

The newly-released plan offers Hainan a more favorable tax-free shopping policy. For example, the annual tax-free shopping quota will be raised to 30,000 yuan, without restrictions on the number of purchases for offshore travelers. The new policy will play an important role in addressing the tourism shopping demands of middle-and high-income groups, and be conducive to expanding domestic consumption and attracting overseas visitors.

Second, healthcare is an important part of people's growing needs for a better life. With the upgrading of domestic consumption, the rise in the country's aging population and the fast pace of urbanization, Hainan should further focus on the establishment of an inclusive health industry, turning healthcare and medical tourism into a trump card for the island. This could serve as a mode for the development of the health service industry and the expansion of healthcare tourism across the nation.

For instance, the implementation plan regulates that in the Hainan Boao Lecheng International Medical Tourism Pilot Zone, a list of medicines (vaccines excluded) for clinical use can be imported upon the approval of the Hainan provincial government. Also, some medical equipment and instruments will be included on the duty-free product list, such as hearing aids, visual training machines and household respiratory support equipment.

Third, Hainan should also pay more attention to tourism from cruises, and prioritize it as a pioneer industry in the Pan-South China Sea tourism and economic cooperation circle. The implementation plan also proposes the expansion of cruise tourism and the development of yacht tourism.

To this end, Hainan should strive to develop the Sanya cruise port, encourage cross-border cruise tourism and cooperate with world-renowned cruise companies to integrate Hainan into global routes, and to create a tourism exchange platform on the 21st Century Maritime Silk Road.

Thanks to its unique geography, abundant natural tourism resources and healthy ecological environment, Hainan boasts favorable conditions for the establishment of an international tourism and consumption center. In 2017, Hainan's total tourism revenue was 81.2 billion yuan ($11.87 billion), only 11.7 percent of Yunnan's, 11.4 percent of Guizhou's, and 6.8 percent of Guangdong's. It's clear that Hainan's tourism potential is far from being unlocked.

Transforming its resource advantages into a competitive edge is the most important task in transforming the island into an international tourism and consumption center. It is also the primary problem to be solved in Hainan's journey to becoming the best possible free trade pilot zone.

The implementation plan also proposes building a "tourism mechanism innovation pilot zone" on the island. The key to achieving that task lies in reforming administrative divisions and administrative systems in accordance with the idea of "one city, one island", cutting through all of the red tape, and unifying land use, infrastructure, industrial layout, environmental protection, urban and rural development policies. In this way, Hainan can create a mode to achieve a comprehensive tourism plan that benefits the entire island.

The author is president of the China Institute for Reform and Development. The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.