The yacht club of the third China International Consumer Products Expo is unveiled on April 11, 2023 in Haikou, South China's Hainan Province. Photo:Li Hao/GT

With flashing lights and dynamic music, the yacht club of the third China International Consumer Products Expo (CICPE) was unveiled Tuesday night in Haikou, South China's Hainan Province, with a total of 25 yacht-makers including Ferretti, Princess Yachts, and Azimut showcasing luxurious vessels that priced between 1 million yuan to over 100 million yuan. 

Next week, the Sanya international yacht and alcohol expo are scheduled to be launched in Hainan's Sanya, signaling that the tropical resort island's yacht industry has ushered in a "full-throttled" mode, which industry insiders said is the dual results of a robust demand recovery and Hainan's free trade port policies, in which yachts imports in Hainan enjoy zero tariffs.

"The vigor of Hainan's yacht as well as accompanying tourism industry is in fact a barometer gauging the high-end consumption of well-off Chinese consumers. When business activities and [tourism] rebound in China, demand for [yacht sightseeing and sailing services] will soar, driving rapid recovery of  the yacht industry chain in Hainan," Zhou Luming, president of the Hainan Yacht Travel Industry Association, told the Global Times on the sidelines of club's opening ceremony on Wednesday.

According to Zhou, Sanya received 56,000 yacht tourists during the Spring Festival holidays earlier this year, accounting for half of the 1.05-million tourists Hainan received last year. "This offers a glimpse into the speed at which the yacht industry is reviving rapidly in Hainan now," he noted.

In the first two months of 2023, Sanya received 291,600 yacht tourists, up 24.41 percent year-on-year, according to a report by the Sanya Daily. A total of 35,500 yacht sightseeing trips were made from January to February, which translated to over 600 yacht sailing trips everyday on average.

The yacht club of the third China International Consumer Products Expo is unveiled on April 11, 2023 in Haikou, South China's Hainan Province. Photo:Li Hao/GT

Demand for luxury boats

To date, there are 1,680 registered yachts in Hainan, and one third of them are for commercial use while the remaining luxury boats are privately owned, according to Zhou. According to a yacht industry development plan released by Hainan transportation authority, the number of registered yacht in Hainan is set to hit 2,446 by 2025, with the number of yacht tourists reaching 1.36 million. The industry scale should likely reach 10 billion yuan by 2025. 

Based on the current recovery trajectory, Zhou envisioned that in the next three years, the number of yachts registered in the island will top 5,000, far exceeding the plan set before.

Angel Zhou, general manager of Simpson Marine, a yacht agency for a variety of luxurious yacht maker, told the Global Times on the sidelines of the third CICPE that the free trade port policies offer Hainan a "head start" in developing a local yacht industry. 

This is the first year the company participated in the expo, eyeing to spot potential high net-worth customers. Last year, Simpson Marine sold nine yachts in Hainan, with total transactions reaching 30 million yuan.  

In 2021, Hainan implemented the zero-tariff policy on the import of vehicles and yachts, under which registered enterprises in Hainan engaged in transportation and tourism sectors are exempted from import duties when importing vehicles, aircraft, ships and yachts.

In July 2022, the local government also issued new regulations to promote the development of the yacht industry throughout the Hainan free trade port. Under the new regulations, overseas residents who work in Hainan and obtain a residence permit are also allowed to apply for yacht registration in Hainan, as part of the efforts to ramp up yacht sales. 

The yacht club of the third China International Consumer Products Expo is unveiled on April 11, 2023 in Haikou, South China's Hainan Province. Photo:Li Hao/GT

Incomparable advantage 

Industry insiders were upbeat on how Hainan will rise and gradually become the "yacht center of Asia-pacific" over the long term.

Across China, Hainan led other yacht bases in terms of the number of yachts, the number of yacht marinas and the number of industry employees. The tropical island has a perfect climate for yacht sailing in the four seasons, even in winter when tourists from North China swarming into Hainan for holidays, Zhou noted.

Young people's demand for new forms of recreation like surfing in recent years offer a boost to yacht tourism amid a faster-than-expected consumption upgrade, industry insiders said.

UBS expects China's household consumption growth to rise by 10-11 percent in nominal terms and 7.8 percent in real terms in 2023.

Nevertheless, Hainan does face growing competition as China's outbound tourism rebounds since early 2023, with many Southeast Asian countries in recent months opening arms to welcome more Chinese tourists. Zhou acknowledged that the explosive travel sector boom across Southeast Asia will divert traffic for high-end consumption from Hainan. 

"Southeast Asia has a mature yacht tourism industry chain, with more diversified, tailor-made and innovation travel products. This is where Hainan needs to speed up the sector's growth," Zhou said. 

Industry insiders suggest the local government scale up investment in developing associated industry chains including yacht manufacturing, maintenance and marina building. 

The island is currently in a full-throttle mode to establish a free trade port by the end of 2025, by adopting the world's most advanced economic and trade rules. 

"We know where Hainan is headed… Hainan's distinctive tourism resource, coupled with the gradual manifestation of the policy dividends from the free trade port, will ensure the island's yacht industry is embarking on a steady sailing," Zhou noted.