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Master of Mice

OVER THE last few years, Sanya, located in the southernmost Chinese province of Hainan, has been the focus of a massive growth experiment. The city has experienced immense change rarely seen even around China. The sheer numbers are impressive; Sanya is currently second in the world to Dubai for the highest concentration of international hotels under construction, and also second to Shanghai for highest average cost per square meter of new residential housing in China.

This small Chinese beach town of 685,000 people is going head-to-head with major international tourism and investment destinations. Partnerships between private businesses and government stand to generate billions of renminbi each year and will be key to transforming this former coconut village into a top travel destination.

Open up the beaches

Sanya’s reputation as a tropical paradise retreat was formed over the last decade with the development of several international hotels providing high-end services in Yalong Bay. Located roughly 30 minutes from the city centre, this classic Sanya beach has been fortunate to retain its pristine beaches despite immense change. The local authorities have initiated regulations to ensure that waste is not dumped in the sea and that the environment is well protected.

Travelers will find a range of activities, including: windsurfing, kite surfing, surfing, jet skiing, snorkeling, scuba diving, and offshore fishing, to name a few. The 17 golf courses within an hour’s drive from Yalong Bay also attract tourists from mainland China, Singapore, Korea and Hong Kong. Those with an interest in riding the waves can seek out the Sanya Yalong Bay Yacht Club that is partnered with the St. Regis Hotel. This is yet another example of more activities popping up along the coast.

The quality of Sanya’s beaches is a draw in a country that has earned a reputation for polluted natural scenery. “Sanya’s Yalong Bay has some of the nicest beaches here, which are also protected from storms,” says Thierry Douet, general manager of the Pullman Sanya Yalong Bay Resort and Spa. “This is a place not only for Chinese New Year [holidays], but is growing in options for fun for the rest of the year,” says Douet. He adds that beaches in Sanya are well-maintained and tend to be free from pollution and garbage.

A new expressway from the airport has shortened travel time to the new and upcoming beach destination, Haitang Bay. Reserved sole for high end properties, Haitang Bay is set to become home to international luxury brands that include Kempinski, Conrad and DoubleTree, Shangri-La, Renaissance, Westin and others.

Nicolas Solari, general manager of the soon-to-be opened 5-star luxury hotel, Haitang Bay Gloria #9, has seen Sanya’s development first-hand through his experiences establishing high-end establishments in the city since 1999. The Gloria #9, for example, will raise the bar for hospitality facilities by hosting the only driving range in Haitang Bay and is also home to a yacht club, says Solari. He points out that the journey from the hotel to the golf course is faster by yacht than by car. Additional high-end services at the Gloria include 16 pools and hot springs with government-certified water. As five-star establishments continue to open in Sanya and tourism grows, demand will increase for unique luxury amenities such as boating facilities, golf infrastructure, hot springs and medical tourism packages. (The nearby 301 Hospital has a VIP ward that offers guests various treatments and packages for high net-worth individuals.)

Another recently opened luxury establishment is the Kempinski Hotel Haitang Bay, which seeks to add a European perspective to the mix of hotels in Sanya. “As Europe’s oldest luxury hotel group, we are committed to providing our guests with memorable journeys inspired by exquisite European flair,” says Tina Qin, PR manager for Kempinski. In addition to golf and spa services, the property boasts 1,200 metre-long sea-water river that connects the various parts of the grounds through gondola boat rides and runs through the hotel’s Yuen Court restaurant. Where the on-site river runs in to the sea is the Lighthouse, an area exclusively used for guests to unwind along the beach and enjoy unobstructed views of sunsets.

Haitang Bay has developed in to an exclusively high-end tourism area, with visitors expecting amenities and experiences of international standard. “Many frequent travelers to Sanya are delighted to have many more high-end facilities to choose from. Because of the convenience of the highway, visitors to Sanya are able to move further north from [the city] and still enjoy what Sanya has to offer,” says Terry Ko, managing director of the Sheraton Shenzhou Peninsula Resort. Other global brands with plans to open in the region are Luxury Collection Royal Begonia, Conrad & DoubleTree, Shangri-la, Renaissance and Westin.

Taking on the international stage

One of the segments of the hospitality industry in Sanya that has seen tremendous growth and an increase in scale is meetings, incentives, conferences, and exhibitions (MICE). As part of a hotel’s plan to increase overall occupancy, these events diversify the business cycle during low seasons. Occupancy rates vary wildly between winter and summer. A key to harnessing the events market is to provide a list of options that organisers can choose from. A natural advantage of planning MICE ventures in Sanya is that events can generally be held in a variety of settings: on beaches, in ballrooms, on lawns, or even out at sea. Organisers can employ full creativity to structure events and services to clients’ needs.

Entertainment events have found their home at Sanya’s Yalong Bay, such as the MGM Grand Sanya to be a comparable setting to western leisure centres. “When attracting events, we offer the ‘3Es’ – energy, excitement and entertainment. We provide a unique entertainment experience that has the vibrancy of Las Vegas – for which MGM is known for – and take the entertainment, dining, and nightlife feeling beyond anything found in Sanya today,” says Vivian Qiao, director of Marketing Communications. In keeping with the Las Vegas theme, the hotel has partnered with Trends Health magazine to host a high-profile pool party similar to the opulence of Vegas-style cocktails, music and services for VIP-class guests. The Chinese film, “Holding Love,” was shot against the tropical backdrop of MGM Sanya and also held a conference on site. The MGM is also the venue for the upcoming Asia Academcy of Music and Science Awards. The hotel has also hosted events for luxury automobile brands, small-to-medium enterprises, the high-end exhibition Hainan Rendezvous as well as corporate MICE events for well-known MNCs such as Coca-Cola.

A growing list of companies and industries have begun to stage important meetings and conferences in Sanya, fuelling the MICE industry in the city. Only a few years ago, the number of annual events held in Sanya was miniscule. However, with each passing year a broad range of events are held representing an ever increasing list of industries, sports, and planning seminars. The varied list of companies and industries attracted to Sanya to stage their important meetings is ever-growing. There are computer service, anti-corruption, engineering, and innovation management seminars slated for this year. An example of a corporate learning event was Bentley China’s visit to the Ritz-Carlton Sanya to conduct a professional training event.

Teambuilding events for companies from all over China take place more frequently in Sanya now, possibly due to the natural environment and setting that provides an escape from the landlocked and polluted cities on the mainland. For example, teambuilding organisers will send groups on rafting in the waters at Wuzhishan or arrange diving trips at Wuzhizhou Island. Sanya attracts an assortment of companies and offer a variety of options to match their needs.

International events have also placed Sanya on the traveler’s map. The Women’s 2012 FIVB Beach Volleyball SWATCH World Tour was held in Olympic Bay Sanya Open from 24 to 29 April. Spectators watched 67 teams representing 28 countries compete for prize money along Sanya Bay. More publicity and successful events held each year will allow Sanya to compete with other Asian beach destinations.

The flow of ideas and shared planning between government and business will further enhance Sanya’s development. An example of this is the 3rd Annual Integrated Resorts Conference that will take place in late November. The event will help to develop additional tourism offerings and set the layout of new facilities scheduled to open in coming years, raising Sanya’s profile in the MICE and tourism sectors.

To assist in the planned growth for MICE in Sanya, in November, the government founded the Sanya City Convention and Exhibition Industry Association. The purpose of this organisation is, according to Deputy Mayor Gu Jingqi, to improve “the industry’s development from being loosely organised and small-scale to one that is professional and systemised”. Working together with business, it will help to transform Sanya into an international tourism destination.

A new opulent playground

Just over a decade ago, most of Sanya’s beaches were untouched by development. Then hotels moved in en masse. Today, a new entrant on the shoreline is yacht clubs. Yachting, a global hobby for the well-off, has boomed here. The VISUN Yacht Club at Times Coast between Sanya Bay and Dadonghai, near Sanya City, was one of the first to settle in. Now, there are also yacht club berths open or under construction at Phoenix Island, Xiaodonghai, Yalong Bay, and Haitang Bay. Business and local governments are moving in full force to diversify their investment portfolio into this new market.

Having gained a reputation as a resort, Sanya is fast becoming the de facto yacht town for southern China. “Five years ago there were no yachts. There were some (people) in the north that would bring them down. Now, there are more and more bought locally. In the last few years, some people have started to buy super yachts,” according to Godfrey Swyvart, General Manager of Serenity Marina, who has observed the changes firsthand. The customer base is by and large from mainland China, wealthy and looking for status symbol possessions. The drive for luxury boats has fuelled marina facilities like Serenity marina, a yacht club with 330 berths with the capacity to fit boats that range from 10 to 40 metres. The club hosted its April 2012 opening with a stopover of the 2011-2012 Volvo Ocean Race.

The most prominent showcase of wealth in Sanya is the Hainan Rendezvous. The third annual event took place in April, exhibiting luxury brands from around the globe. Major sponsors included Chopard, Pernod Ricard, Mandarin Oriental Sanya, UBS and BMW. Among the displays were 21 of the world’s most advanced private jets, a 130-boat fleet that included luxury models such as the 49-metre Lohengrin from Trinity and 44-metre Helix from Feadship. The Bugatti Veyron, touted as the world’s fastest car, was one of the dozens of elite automobiles on display at the show. In total, over 200 ultra-lifestyle companies exhibited their brands to prospective buyers.

Sanya’s coastal location has also attracted the cruise industry. The cruise ship terminal located near the port at Phoenix Island was completed in mid-2011. Beginning in November 2011, three cruise lines- Star Cruises, Costa Cruises and Holland America- have made seasonal stops in Sanya during the winter montsh. While providing an all-inclusive cruise experience is new undertaking for the tourism industry in Sanya, it also opens up a new avenue of entertainment. The most frequent and shorter Star Cruise to Vietnam is a favorite. It offers a short 492 km overnight jaunt to Halong Bay, Vietnam. With visas on arrival, this is a popular new addition to available travel options. Most ships also offer casino-style gambling when vessels are passing through international waters.

The recent expansion of the hospitality industry in Sanya over the last few years has been all encompassing. Originally touted to become an “international tourist destination” by the central government in 2009, a full range of high-roller services new to the region have emerged.

Rising living standards

One of the key elements of Sanya’s change over the past few years has been setting up of family-friendly facilities that allow foreign the facilities opening up which allow families to settle for part or full time of the year. In the past, several hotel brands were hindered in their hiring of foreign staff and managers because suitable infrastructure was not available to expatriates with families. Foreign managers or chefs looking to bring their families to the island could not enroll their children in proper international schools.

But with the opening of the Canadian International School, international students in Sanya can now attend western-style educational programmes. The rapid success of this school has already demanded an expansion to a state-of-the-art learning facility currently being built. Opening in September next year, this 32,000 sq. m. school with 54,000 sq. m. of landwill house an international school, a local school and a kindergarten. This facility, located in the Xiaodonghai area, can accommodate 2,000 students, house 600 and include a gymnasium, swimming pool and 400-metre track.

Development across local industries will continue to attract more foreign residents. “Many of the parents of our students work in the hospitality industry and we have a diverse student body arriving from various parts of China and the world,” says Real Hryhirchuk, principal of CIS-Sanya. “We are seeing development in many areas that will help to bring more tourists and international visitors and residents”, he adds. New additions to the neighborhood will also include a new hospital, water park and ice rink. Additionally, Hewlett Packard is building a large research and development facility that will bring more talent from across China and the globe to Sanya, Hryhirchuk says.

The continuing influx of seasonal Mainland Chinese and expatriate workers is slowly giving rise to an increase in service amenities. The many new villa compounds and apartment blocks dotting the tropical landscape are adding pressure for more cosmopolitan shopping options. While downtown Sanya is still quite basic, the upscale malls are not far away and opening fast. Haitang Bay has already opened a cinema, but will see an international shopping centre open in August 2014, while an immense underground mall will be built under Luhuitou Square and link to the popular Duty-Free Shop. China’s largest Duty-Free shopping is also under construction. The pace of change is necessary to attract and keep talent and provide a more livable atmosphere for residents.

Troubles in paradise

Managers frequently cite staffing as a main concern. At Sanya’s fast pace of development, a shortage of labour is to be expected. However, without a well-developed service industry, the local islanders are not sufficiently trained for global standards of luxury service. Work ethic continues to lag behind the ‘service first’ mentality that is a staple of international hotel chains. Moreover, an island work mentality is encouraged by the fact that many businesses and government offices are closed for 3 hours during each working day. “Good facilities are not enough to fulfill customer needs anymore. Guests are looking for the hotels that can provide them both facilities and exceptional service,” says Michel Goget, general manager of Ritz-Carlton, Sanya.

This has exacerbated the shortage of qualified labor caused by continued property openings in greater Sanya. Since the local labor pool is insufficient, the other options are to recruit nationally or poach from competitors’ staff. According to training managers interviewed, this is a serious problem.  Instilling corporate identity and level of service takes dedication and time. Training new recruits that jump ship for what is often a small increase in salary impedes business from standardizing high-level service and sets back staffing progress. With approximately 15,000 new four-star or above hotel rooms coming on to the market in Sanya County by the end of 2013, hospitality establishments must find a way to build a more mature and experienced labour pool.

Forecasting sunny skies

Though some progress has been made to increase leisure options for tourists, some have said that there is still a ways to go before Sanya fits the bill as a true international tourist destination. Many of the visitor attractions around the city might be suitable for a less demanding tourist group member, but the current lack of entertainment alternatives outside the main hotel strips can leave tourists feeling lackluster about the city surroundings.

Aside from the newly introduced activities that were mentioned earlier in the article, top-class venues aimed at drawing fun-seekers are not yet available. There are currently no casinos for high-rollers or family-friendly centres such as amusement parks and zoos. Until a more varied list of entertainment services is available, it will be completely up to the hotels to provide tourist incentives.

Sanya is moving toward a place among top leisure destinations of the world. By issuing the flexible visa-on-arrival policy for travelers from 21 countries and granting maximum 15-day stays, the government has shown continual support for tourism and MICE expansion. As the labour pool matures and grows, hospitality standards will also attract visitors. By branding itself as the premier south China resort and supporting its tourism industry, Sanya will surely live up to its reputation as the “Hawaii of China.”

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