Hainan's spring festival duty-free spending hits 2.49 billion yuan in 8 days

Hainan spending surge: Spending during the Spring festival on Hainan, China's duty-free island, soared to high levels, hitting a record-breaking 2.49 billion yuan ($346.2 million) in eight days, according to data from Haikou Customs. This marked a substantial 60 per cent increase compared to the previous year, with over 297,000 shoppers splurging an average of 8,358 yuan each on duty-free goods from February 10 to 17.

The surge in spending highlights the island's growing popularity as a duty-free shopping destination, especially since 2020 when China raised duty-free purchase limits in Hainan to 100,000 yuan. Consequently, overall duty-free spending has tripled, surpassing $6.1 billion in 2023 from $2 billion in 2019. Anticipated to continue growing, Hainan is set to become entirely duty-free by 2025.

Despite the reopening of Chinese borders, many travellers still flock to Hainan due to ongoing flight restrictions, visa hurdles, and the high expenses associated with international travel. This has kept the appeal of duty-free shopping on the island strong.

Hainan tourism boom

During the Lunar New Year holiday, tourism spending in Hainan stood out amidst a broader trend of restrained expenditure amongst domestic Chinese tourists, who spent less per trip compared to pre-pandemic levels in 2019. Overall, domestic tourism spending surged by 47.3 per cent to 632.7 billion yuan ($87.96 billion) compared to the same holiday period in 2023.

The number of domestic trips also spiked by 34.3 per cent, totalling 474 million, with railways and air travel witnessing significant passenger volumes. Despite the increase in trips, average spending per trip remained lower than in 2019, suggesting a degree of caution in consumer behaviour.

Hainan's allure as a duty-free haven has intensified in recent years, particularly with pandemic-related travel restrictions limiting alternatives like duty-free shopping in Korea or Hong Kong. Luxury brands have capitalised on this trend, with major players establishing their own duty-free stores on the island, further enhancing its appeal to domestic consumers.

(With Reuters Inputs)