China’s Sanya holiday hotspot closes duty-free malls and venues to curb COVID

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SHANGHAI, Aug 5 (Reuters) – Sanya, a top tropical holiday destination on southern China’s Hainan Island, began closing its duty-free malls on Friday in response to worsening the COVID-19 epidemic.

Since China closed its international borders in early 2020 to curb the spread of COVID-19, Hainan’s duty-free industry has exploded, becoming a vital channel for global brands from Gucci to Coach, La Mer to L’ Oréal to reach Chinese buyers.

But Sanya International Duty Free City in Haitang Bay, operated by China Duty Free Group (601888.SS) and Hainan’s largest offshore shopping mall, closed indefinitely on Friday to prevent the spread of COVID-19, said indicated a message on his Weibo account.

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The closure comes even though no cases of the current Hainan outbreak have yet been detected in Haitang Bay. While China’s case count is low compared to the rest of the world, Beijing is pursuing a “dynamic zero” policy that sees it adopting tough restrictions to stop any virus transmission.

Health officials in Hainan told a press conference on Friday that from Aug. 1 to 5, the cumulative number of local confirmed cases reported in the current outbreak was 191.

Entertainment venues, including many bars and cinemas and some tourist sites, have also closed to help stem the spread of the virus, although hotels remain open and many contacted by Reuters said they were operating as usual. habit.

This is the second time duty-free malls have been forced to close in Hainan in 2022, with the island also seeing closures in April following another outbreak.

“The outbreaks in March and April had a big impact on us,” said a Sanya International Duty Free City catering worker who goes by the name Dream.

She added that cases were back to 70-80% of last year’s levels before the last outbreak.

Last week, Hainan’s capital Haikou hosted the second China International Consumer Products Expo, where LVMH (LVMH.PA), Kering (PRTP.PA), Richemont (CFR.S), Tapestry and Burberry (BRBY.L ) were among the exhibiting global brands.

Last year, boosted by mainland consumer spending and political changes, the overseas sales value of duty-free items in Hainan reached about 49.5 billion yuan, or about 7.3 billion at the current exchange rate, up 80% year-on-year.

“Now in August the virus is back, it’s very difficult to do business,” Dream told Reuters.

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Reporting by Casey Hall; Editing by Alexander Smith

Our standards: The Thomson Reuters Trust Principles.

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