Sanya, considered by many to be China’s answer to Hawaii, has a few things to boast about: a tropical island with winter temperatures that average 66 degrees Fareneheit, the Boao Forum (Asia’s version of Davos’ World Economic Forum), and host to a number of luxury events. Despite all of these attractions, there are still far too few tourists to fill the city’s hotels. The head of Sanya’s tourism association recently said that Sanya is expected to face a “huge correction” in its hotel market in the next two years as the supply of luxury accommodation triples by early 2013.
“The demand is still not there. And the [capacity of the] airport is almost saturated, so we are going to be all looking for the same business,” said Michel Goget, Ritz-Carlton Sanya’s general manager and chairman of the city’s Tourism Association. Last year, Sanya contained 7,000 luxury hotel rooms, but by the end of 2013, there will be 21,000. The average hotel occupancy rate in Sanya will decline 10 percentage points from last year’s 65 to 70 percent, according to Goget. “There’s going to be a huge correction between now and 2014 because there’s an oversupply,” he commented.
In December 2009, China unveiled a massive plan to develop the southern Hainan province into a major international tourist destination. Sanya is the second-largest city in Hainan. In December of 2011, both St. Regis Sanya and MGM Grand Sanya opened. The major hotel chains Marriott and Starwood Hotels & Resorts Worldwide also have a presence there.
The Ritz-Carlton Sanya, owned by parent company Marriott, remains optimistic about the future. Victor Clavell, Hong Kong-based vice president for the chain in the Asia-Pacific region, has said that the Ritz-Carlton Sanya is the brand’s most profitable hotel worldwide.
Goget said, “We have 300 million people in China, the size of America or Europe basically, that have the ability to buy for themselves a nice weekend. People come to Sanya today at the Ritz-Carlton like they’re buying a Louis Vuitton bag. They’re spending like $400 or $500 to spend a night in here and then go back to Shanghai or Beijing to be able to have bragging rights.”
photo credit: ritz-carlton sanya