A division of China International Travel Service Tourism Corporation of China will invest 12.9 billion yuan (about $ 1.87 billion) in the construction of a duty-free cluster in Hainan Province, China Central Television reported on Thursday.
CITS Investment and Development plans to build a duty free cluster on 693,000 square meters.
The volume of investment in the project will amount to 5, 9 billion yuan (about $ 858, 81 billion).
The first stage of the project will see residential houses being built, the second phase will include office centers, a five-star hotel, and also shopping streets – the amount of financing stand at about 7 billion yuan (about $ 1.02 billion).
In September 2018, the company moved its headquarters from Beijing to Haikou, the provincial capital. In turn, the authorities allocated a 51% stake to the conglomerate in the management company Hainan Duty-Free Goods.
The pilot program for the development of a chain of duty-free stores on Hainan was launched by the Chinese government in 2011. Visitors can make purchases without paying duties of up to 30, 000 yuan (about $ 4.36 thousand) per year.
In the first half of 2019, revenue from duty-free shops on Hainan increased by 26.5% to 6.6 billion yuan (about $ 960.7 million). In 2012- 2018, the average annual growth rate of this indicator in Hainan reportedly stood at 28%, while on average in China it reached about 11%. At the end of 2018, the sales at duty-free stores in Hainan reached 10.1 billion yuan (about $ 1.47 billion), which is 26% of national revenue.