Hainan: China's Hawaii Rises

Posted: 20 Aug 2011 | 6:00 am

The mere mention of the word "Hawaii" conjures up thoughts of gentle tropical breezes and the soft sounds of swaying coconut trees.

Throw in a magical sunset over-looking the beach and a few brightly colored fruity cocktails complete with miniature umbrellas. hula girls, surfboards and puka shells, and you have a dream island destination that many associate with tropical paradise, Hawaiian-style.

They've even remade the television series Hawaii Five-0 to keep the brand alive for generations to come.

And we know island brands sell. Just ask Tahiti, Bali or Phuket.

Now here comes a new island brand from Asia's factory of all things in huge quantities, one that has become known as "The Hawaii of China" - Hainan Island.

In China everything is done on a grand scale, and entrepreneurial vision and over-achievement are the present day ethos. More is better, so let's try even more.

Looking at the market data gathered by hospitality industry firm Lodging Economics, if Hainan was considered a free-standing country, their current hotel development pipeline is only exceeded by the US, Brazil, India, UK and the Chinese mainland.

Today there are 60 new hotels and over 25,000 new hotel rooms in the Hainan development cycle. The prime area of Sanya has 35 projects and over 17,000 units underway.

The question most asked by industry players is: Is this a looming monster or will it only attract domestic tourists?

While there is considerably less interest in the housing market right now, Sanya does have a relatively healthy number of visitors from Russia and South Korea. So it isn't just a one-trick pony.

Though residential and property sales have yet to take on the scale that's expected to follow a thriving tourism boom, even the most naive observer can look forward and see that condo hotels and villa resorts are imminent.

While you can argue that the world is getting smaller and long-haul tourism is rampant, regional travel is a major growth engine and the short-haul market is where all the action is.

Is Hainan a threat to Phuket, or to Vietnam, Cambodia, and the Philippines? Will the Chinese be content to simply stay local, or is the allure of going abroad too much to resist?

For most of Asia, travel choices are determined by the laws of supply and demand and personal choice. But in China internal controls over movement inside and outside the country continue to be a wild card which is simply impossible to guess.

Wiping the dust off my crystal ball, I have to say the tourism development in Hainan will spur an entirely new sector of investment property.

Yes, as in Hawaii or Australia, Bali or Phuket, the mass condos will come with all the rest, be it the good, the bad or the fringe.

Of course, many economists say China is a "bubble in the making". This does not bode well for the shores of Phuket, given its growing reliance on the mass markets of tourists from China. If there is a blip, everyone will suffer.

While Hainan is not Hawaii, it's indicative of the growth of destination island tourism where the big, bright and new continue to dominate the headlines.

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