Analysis of Price Polarization in High-End Hotels and the Rise of the Mid-Tier Market Under Hainan Free Trade Port's Full Island Customs Clearance Policy

Based on the latest market research and policy data analysis, I have prepared this in-depth analysis report.

On December 18, 2025, the Hainan Free Trade Port officially launched its full island customs clearance operation, a landmark project in the construction of the Hainan Free Trade Port [1]. The core connotation of the customs clearance operation is the establishment of a special customs supervision zone system featuring “opening up at the ‘first line’, controlling at the ‘second line’, and free circulation within the island”:

The customs clearance policy and the existing offshore duty-free policy are compatible. Tourists still enjoy an annual duty-free shopping quota of RMB 100,000 per person, with new categories such as pet supplies and portable musical instruments added, and popular goods implementing the “buy now, take now” convenience measure [1].

Policy benefits have quickly transmitted to the tourism market:

• Search Surge
  : As of December 18, 2025, the search popularity of Haikou and Sanya ranked among the top five popular cities in China [1]
• Booking Explosion
  : After the customs clearance date was confirmed, ticket bookings to Hainan during the non-tourist peak season increased by 163% year-on-year
• Growth in International Passenger Flow
  : During the Western Christmas and New Year holidays, bookings for international flights to Haikou increased by over 40% year-on-year
• Surge in Hotel Occupancy
  : During the first weekend after customs clearance (December 20-21), popular room types of resort hotels in Sanya, Haikou and other places were sold out [1]

During the 2026 New Year’s Day holiday, Hainan’s hotel market showed the characteristics of consumption stratification where different segments operate independently without interference [3]:

Take Mandarin Oriental Sanya Coral Bay as an example:

• Weekday Price: RMB 2,153 per night
• Spring Festival Period: RMB 4,664 per night
• Price Increase: Approximately 133%

Some royal suites priced over RMB 100,000 per night are already showing fully booked for certain dates, confirming the strong consumption power of high-end customer groups [3].

Demand Side                                Supply Side
┌─────────────────────────────────────────┐
│  1. Severe Supply-Demand Imbalance       │  1. Premium Supply Concentrated in Sanya
│     - 9-day extended Spring Festival holiday│     - Scarce top-tier ocean view resources
│     - Dual demand for winter escape + duty-free shopping │     - Concentration of international hotel brands
│                                         │
│  2. Low Price Sensitivity of High-Net-Worth Groups │  2. Peak Season Service Premium
│     - Insensitive to prices, pursuing ultimate experiences │     - Rising labor costs
│     - Consumption with social attributes (showcasing hotels, luxury) │     - Temporary supply cannot expand
│                                         │
│  3. Influx of Foreign Visitors           │  3. Scarcity of Experience Economy
│     - Driven by China-Russia visa-free policy (effective September 2025) │     - Scarcity of theme park + hotel packages
│     - 67.53% of Russian tourists choose high-star hotels [3] │
│                                         │
│  4. Driven by Duty-Free Shopping         │  4. Catalyzed by Customs Clearance Policy
│     - Need to rest nearby after shopping │     - Bullish expectations, holding back supply to raise prices
│     - Hotels near duty-free shops "benefit from proximity" │     - Aggressive pricing strategies of branded hotels
└─────────────────────────────────────────┘

During the New Year’s Day holiday, Hainan’s duty-free sales increased by 129% year-on-year, reaching RMB 712 million [3]. Hotels near duty-free malls have become the biggest beneficiaries:

The average occupancy rate of Atlantis Sanya during the New Year’s Day holiday exceeded 97% [3], fully demonstrating the strong appeal of the “duty-free shopping + resort hotel” linkage model.

In 2024, Hainan’s hotel market encountered a cold spell, with mid-tier hotels once trapped in a difficult situation, seeing their prices halved and operating conditions bleak [3]. However, after the implementation of the customs clearance policy, the mid-tier market has rebounded strongly:

Data from Meituan shows: During the 2026 New Year’s Day holiday,

bookings for four-star hotels in Hainan increased by 61% year-on-year

, far exceeding the overall accommodation growth rate [3]

┌────────────────────────────────────────────────────────────┐
│                    Logic of the Rise of the Mid-Tier Market │
├────────────────────────────────────────────────────────────┤
│                                                            │
│  Logic 1: Return to Rational Consumption                   │
│  ├── Skyrocketing prices of high-end hotels (+133%) exceed budget │
│  ├── Total cost of flights + accommodation + shopping is too high │
│  └── Rise of "alternative" mindset: Achieve more with less │
│                                                            │
│  Logic 2: Structural Changes in Customer Groups             │
│  ├── Middle-class families become the main force: Pursue quality but do not blindly compare │
│  ├── Rise of round-the-island self-driving: Wanning, Lingshui become new hot spots │
│  └── Consumption concept of post-90s/post-00s: Experience > Showing off │
│                                                            │
│  Logic 3: Improved Supply-Side Matching                     │
│  ├── Product upgrade of four-star hotels                    │
│  ├── Improved standardization of homestays/inns             │
│  └── Hotels within 10 minutes' drive from duty-free malls "benefit effortlessly" [3] │
│                                                            │
└────────────────────────────────────────────────────────────┘

Main consumer groups sensitive to prices are showing obvious “alternative migration”:

Big data from Qunar shows that the self-driving tourism popularity of Haikou and Sanya ranks TOP 2 in China, with year-on-year growth of 81% and 96% respectively [3]. Ruoyi Haitang Bay Store, which is only 10 minutes’ drive from the duty-free mall, has been fully booked every day from the customs clearance date to New Year’s Day.

• High-End Market
  : Price polarization, top luxury hotels in short supply, ordinary high-end hotels under pressure
• Mid-Tier Market
  : Acts as a “stabilizer”, leading growth with the strongest resilience
• Mass Market
  : Stable budget accommodation, self-driving tourism boosts homestays

According to industry data, the average RevPAR of domestic high-end hotels fell by 5.5% in 2025, with the most significant drop in Sanya, reaching 17.4% [4]. Although the customs clearance policy has brought a short-term recovery, structural adjustments are still ongoing.

Driven by the China-Russia visa-free policy, Sanya’s beaches are now “filled with Russians”, with over half staying for more than 7 days, and 67.53% choosing high-star hotels [3]. The influx of international customers has further pushed up the occupancy rates of top high-end and mid-tier hotels.

Based on current data and market trends, Hainan’s hotel market is expected to show the following characteristics in the 2026 Spring Festival:

Hainan will build a tourism spatial pattern of “one body, two loops, three poles, seven clusters”, relying on the 988-kilometer round-the-island tourism highway to guide tourists from focusing on Sanya and Haikou to in-depth island-wide tourism [1]. This will change the geographical distribution pattern of the hotel industry.

After customs clearance, the cost of imported high-end amusement equipment and performance equipment will be reduced, which will promote the popularization of experience projects such as yacht cruises and low-altitude sightseeing. Combined products of “vacation + health care + technology experience” will become a new trend [1].

Hainan will gradually become a tourism “bridge” connecting Southeast Asia, Japan, South Korea, Europe, the United States and mainland China, and international tourism groups and high-end service institutions will accelerate their entry [1].

1. Avoid Peak Travel Periods
   : Stay away from the price peak around the Spring Festival
2. Geographic Arbitrage
   : Choose areas around Sanya such as Lingshui and Wanning
3. Off-Island Alternatives
   : Consider “alternative” destinations such as Beihai and Xiamen
4. Book in Advance
   : Lock in mid-tier hotel prices to avoid temporary premiums

1. Experience Upgrade
   : Focus on combined products of “vacation + health care + duty-free shopping”
2. Lock in Advance
   : Popular room types in top luxury hotels need to be booked several weeks in advance
3. Follow Policy Updates
   : Seize opportunities for new categories of duty-free shopping after customs clearance

[1] 21st Century Business Herald - “Hainan Tourism is Set to Boom Under Full Island Customs Clearance” (https://www.21jingji.com/article/20251224/herald/fe6775bf20a38a2e51f53dc9052ec52c.html)

[2] National Information Center - “CCTV News | Guide to Duty-Free Shopping and Employment in Hainan After Full Island Customs Clearance” (https://www.ndrc.gov.cn/wsdwhfz/202512/t20251225_1402620.html)

[3] The Paper - “Hainan’s Hotel Market is Stable This Spring Festival” (https://m.thepaper.cn/newsDetail_forward_32366594)

[4] China.org.cn - “Hainan’s Hotel Industry Has Entered the ‘Era of Stratification’, New Pattern of Coexistence of High-End and Budget Options” (https://news.china.com/socialgd/10000169/20260106/49140769.html)