CTG charts plan to consolidate presence in Hainan

China Tourism Group, a travel services provider and tax-free product retailer, will add a number of duty-free stores, hotels and logistics facilities in Hainan province this year to seize opportunities in the post-COVID-19 era, said company officials on Thursday.

CTG, the parent company of well-known travel agencies and tax-free goods retailers including China International Travel Service Ltd, China Travel Service (Hong Kong) Ltd and China Duty Free Group, plans to complete work and related services for various brands at Terminal 2 of Haikou Meilan International Airport and open three duty-free stores in Sanya and Boao in 2020, said Li Gang, the group's vice-president.

In addition to building two high-end hotels in Sanya this year, the centrally-administrated State-owned enterprise CTG is currently building a 12.8 billion yuan ($1.81 billion) tax-free commercial complex in Haikou, Hainan's provincial capital. The company started to operate the second phase of the complex which includes foreign brand designer stores, a cinema, a children's park and restaurants in Sanya in January.

Many opportunities are also emerging from the provincial government's announcement last month that it would introduce more open visa-free entry policies and further simplify entry procedures for cruise ships and yachts, as well as the central government's plan to build the province into a high-quality pilot free trade zone by the end of 2020 and a free trade port by 2035, Li noted.

Zhou Lingjun, deputy general manager of CTG's Hainan regional headquarters, said the company's investment in a Hainan logistics center project will effectively support the growth of the China (Hainan) Pilot Free Trade Zone and the China (Hainan) Free Trade Port, as well as raise people's awareness of Hainan's mature duty-free shopping environment around the world.

The ongoing construction project of the logistics facility is located in the Haikou Comprehensive Bonded Zone. Zhou predicted this facility will become a modern logistics distribution and e-commerce sorting center for Hainan province after its completion.

After moving its headquarters from Beijing to Hainan in 2018, the group has integrated and adjusted its business layout and organizational structure in the tourism industry, ranging from travel services and investment to hotel operations in the past two years.

Supported by 43,000 employees, CTG had 120.4 billion yuan in assets, 584 subsidiaries, two cruise liners, over 170 hotels and more than 200 duty-free stores across the world at the end of 2019.

Zhou said the company will take multiple measures including establishing a holiday-themed consumer finance firm as well as promoting short-distance tours and tailored tourism to further meet consumer demand to mitigate the impact caused by the outbreak.

With the port of Sanya as a base, he said the group plans to highlight cruise services to help bolster both the cultural and tourism sector in Hainan this year.

Hainan attracted 1.42 million tourists from overseas in 2019, up 12.4 percent from a year earlier, while tourism revenue totaled 105 billion yuan. It also sold 13.49 billion yuan worth of tax-free products to people throughout the world in 2019, up 30 percent on a yearly basis, said Hainan's provincial tourism and cultural authorities.

Attracted by Hainan's growth potential and its convenient location close to the economies of the Association of Southeast Asian Nations, a total of 23 central SOEs－including China Merchants Group, China National Machinery Industry Corp and China Railway Group－invested 35 billion yuan across Hainan in 2019 to establish regional headquarters, plants, ports and research and development facilities, said officials from the State-owned Assets Supervision and Administration Commission.

Luo Zilian, head of the General Administration of the Customs Sanya branch, said Hainan has benefited from its visa-free access by tapping into the local tourism boom and the island province's greater connectivity. Customs will continue to upgrade its supervision over e-commerce activities to help consumers purchase more duty-free products.

Affected by the outbreak, Hainan's sales of duty-free products totaled 1.85 million items worth 1.28 billion yuan between Feb 19 and March 30, down 20 percent on a year-on-year basis, according to customs data.