Hoteliers capitalizing on rising demand for tourism spending in Hainan
Starwood Hotels & Resorts, Marriott International, Kerzner International and even Hard Rock Hotels are rushing to get a foothold on the island, which is about the size of Maryland and whose lodging demand numbers are bucking China’s overall lackluster results.
By the end of the year, the island’s first two hotels under Starwood’s Westin upper-upscale badge are slated to open: the Westin Sanya Haitang Bay Resort, which will have 448 rooms as well as four restaurants and lounges and five swimming pools, and the Westin Haikou. A third Westin is scheduled to open on Lingshui’s Qingshui Bay just northeast of Sanya by mid-2014. Those properties follow on the Royal Begonia, Starwood’s first Luxury Collection property on the island, which opened in Sanya in September 2012.
The hoteliers are betting on a Sanya market that continues to buck the trend of falling revenue numbers in what is widely believed to be an overbuilt China lodging industry. During the second quarter, Sanya was the only one of China’s 10 largest markets to not have a year-over-year occupancy decline, according to research firm HVS.
And those numbers look even better for luxury operators: Second-quarter revenue per available room (RevPAR) at Sanya’s five-star hotels surged 19% from a year earlier.
Hainan has recently received extensive infrastructure improvements, and the island benefits from its warm weather and scenery, attributes that lure mainland Chinese with disposable income.
"The natural beauty, tropical climate, attractively priced real estate, unspoiled and undeveloped land presents opportunities, and there has been a willingness of farmers to sell their land," said Elizabeth Winkle, managing director for STR Global.
Winkle estimated that about 90% of Hainan’s visitors are from the mainland, though there is an upswing in tourism from Taiwan, Hong Kong, Russia and a smattering of English-speaking countries.
That’s luring other lodging operators to bet big on Hainan.
In October, Kerzner International announced plans for its first Atlantis resort in China. The 1,300-room Atlantis Sanya Hainan, scheduled to open in 2016, will total more than 150 acres and include a water park and marine exhibits.
Meanwhile, Hard Rock International last year announced plans for a resort in Haikou, scheduled to open in 2015, that will include 250 rooms and cover more than eight acres.
Nearby, Marriott International, which opened the Ritz-Carlton Sanya in 2007, is planning both a Ritz-Carlton hotel and a Renaissance property for the massive Mission Hills Haikou golf resort in 2015.
"Hainan has been a place of interest for many years and has long been a popular domestic destination," Winkle said. "I’m not surprised."
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