Voluntary Report -- public distribution

**Date:** 6/28/2007

**GAIN Report Number:** CH7608

CH7608

**China, Peoples Republic of**

**Market Development Reports**

**Sanya: China\'s Tropical Paradise**

**2007**

**Approved by:**

![](media/image1.wmf)Joani Dong

US ATO Consulate Guangzhou

**Prepared by:**

May LIU

**Report Highlights:**

Sanya\'s tourism benefited from growth of China\'s economy and
governmental support. It is often touted as \"China\'s Hawaii\" for its
tropical climate, fine, sandy beaches and year-round sunshine, but not
for cuisine. Sanya\'s visitors mostly consist of Chinese from other
cities, not foreigners with western tastes and pocketbook to match, as
in Phuket, Thailand, another tropical paradise. To understand the
market, post interviewed senior restaurant execs, hotel managers and
local government officals. Overall, many believe promoting American
foods at this time might be premature with the possible exception of
beef(when officially available), wines and selected U.S. fruits for gift
giving at five star hotels. Some guardedly believe that western foods
and therefore U.S. products could have prospects within five to eight
years, given increasing build-up in existing tourist areas as well as
construction of Haitang Bay, a new five star resort area 20 km west of
Sanya.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Guangzhou \[CH3\]

\[CH\]

**Sanya Overview**

Located in the South China Sea between Guangdong province and Vietnam,
is the island of Hainan. Sanya lies in the south and occupies 740.7
square miles and a coastline of 130.5 miles. By the end of 2005, Sanya's
official population reached 524,000 with GDP per capita of US\$1,192.
Sanya boasts marine, mineral and water resources. As a result, Sanya
benefits from central and local government initiatives aimed at
developing the island\'s vast potential for tourism. Sanya's tropical
climate helps boost production of vegetables, fruits and other tropical
crops such as flowers and seeds. Sanya's climate is conducive for
cultivation of its marine industry. The products are mainly sold to
mainland cities and exported to Hong Kong, Japan, Korea and Taiwan.
Sanya has what it takes to make it a tourist draw---warm weather, long
white beaches, but it is still in its infancy when it comes to importing
U.S. food products. ![](media/image2.png){width="1.9791666666666667in"
height="1.6388888888888888in"}

Tourism has been an important source of revenue for Sanya in recent
years. For example, in 2005, tourism generated US\$ 0.6 billion, up 30
percent from 2004. In addition, Sanya's hotels officially welcomed 4.1
million overnight tourists (including 230,000 foreigners) in 2005.
During the first ten months in 2006, up to the day of our interviews
with the Sanya Tourism Bureau, the growth in the tourism sector was over
12 percent compared with the previous year.

It's not surprising, then, that in the past five years, the Sanya
government invested more than US\$1.96 billion in building
tourism-related infrastructure including roads, a modern sewage system,
international cruise ship passenger docks, sight-seeing areas, hotels
and resorts. In addition, the city government promotes its traditional
culture of Li, Miao and Hui as a tourist
draw.![](media/image3.png){width="1.88125in"
height="1.4527777777777777in"}![](media/image4.png){width="1.8805555555555555in"
height="1.3597222222222223in"}

A major government project is the new *Sanya Phoenix* *International
Airport* built to international standards to accommodate large aircraft
such as Boeing 747s. A second phase of the airport project is underway.
Upon completion, this airport will handle up to 6 million passengers a
year.

The Sanya government promotes an *Exit-Entry Group arrival visa policy*
to lure more international tourists. For those tour groups consisting of
a minimum of five people who come from countries such as Japan,
Singapore, Malaysia, Thailand, Korea, the Philippines, Indonesia,
Germany, Great Britain, France, Austria, Italy, Russia, Switzerland,
Sweden, Spain, Holland, the United States, Canada, Australia, New
Zealand and are holding valid passports, they can simply apply for a
tourist visa upon arrival at Sanya airport. This visa is also valid for
visiting other cities in China after the visitors' Sanya tour.

The growing travel industry fuels Sanya's tourism. Already there are
direct flights to Sanya from Hong Kong and chartered flights from St.
Petersburg and Moscow. Russian Continental Airlines increased chartered
flights between Moscow and Sanya from three to seven per month, thereby
increasing the number of guests flying directly from Russia to Sanya.
*China Southern Airlines* has opened daily flights between Urumuqi (in
western China) and Sanya, thereby increasing visitors from central Asia.
From May to October of 2007, the British *MyTravel Airways* will begin
flying from Manchester or Gatwick directly to Sanya. Flights will be on
a bi-weekly schedule. Last year Shanghai-based *Spring International
Travel Service* opened an office in Sanya for Spring Airlines and plans
to add 15 planes by 2010. They expect to increase current aviation
business revenue in Hainan to as much as US\$75 million in 2007. The
world's top passenger liner, Italian Costa Crociere S.P.A., in November
2006 initiated a fixed seaway to Sanya. The liner will visit Sanya at
least 6 times a month. Costa Allegra will cruise on the scheduled line
of " Hong Kong -- Sanya -- HaLong Bay -- Hong Kong". China Ocean Deluxe
Cruises is also developing deluxe cruise travel services in Hainan. They
first launched their ship, *Mona Lisa*, in 2006 and will launch another
ship by the end of 2007. This will allow them to cruise among Sanya, the
Philippines, Hong Kong, Thailand, Malaysia, and
Brunei.![](media/image5.png){width="2.8in"
height="2.0340277777777778in"}

**Sanya at a glance -- 2005**

  ------------- ---------------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ----- -----
  Area:         740.7 square                                                                          
                miles                                                                                 

  Coastline:    130.5 miles                                                                           
                includes Yalong                                                                       
                Bay, Sanya Bay,                                                                       
                Dadonghai and                                                                         
                Haitang Bay                                                                           

  Population:   524,000                                                                               
                represent 20                                                                          
                ethnic                                                                                
                nationalities,                                                                        
                for example, Li,                                                                      
                Miao and Hui.                                                                         
                Main language is                                                                      
                Putonghu.                                                                             
                English is                                                                            
                spoken at all                                                                         
                first class                                                                           
                hotels.                                                                               

                                                                                                      

  GDP           US\$ 9.8                                                                              
                billion, GDP per                                                                      
                capita US\$1,192                                                                      

                                                                                                      

  Tourists over 4.1 million, of                                                                       
  night:        which 230,000                                                                         
  (person)      were from                                                                             
                outside China                                                                         
                according to                                                                          
                official                                                                              
                statistics                                                                            

  Tax Revenue   US\$91.4                                                                              
                million, up                                                                           
                22.4% from 2004                                                                       

  Total retail  US\$0.3 billion,                                                                      
  sales         up 13.1% from                                                                         
                2004                                                                                  

  Total foreign US\$216.1                                                                             
  trade (Imp +  million, at                                                                           
  Exp)          10.6% annual                                                                          
                growth rate                                                                           

  Major         414 tons of                                                                           
  Agriculture   melons and                                                                            
  Products      vegetables,                                                                           
  outputs:      200,000 tons of                                                                       
                fruit, 81,000                                                                         
                tons of aquatic                                                                       
                products.                                                                             
                Profits from                                                                          
                agriculture                                                                           
                increased US\$                                                                        
                263.1 million                                                                         
                (RMB 2,105                                                                            
                million) in                                                                           
                2005. They are                                                                        
                mainly sold to                                                                        
                mainland cities                                                                       
                and to Hong Kong                                                                      
                as well as                                                                            
                exported to                                                                           
                Japan, Korea and                                                                      
                Taiwan.                                                                               

                                                                                                      

                                                                                                      

  Climate:      Tropical marine                                                                       
                climate. An                                                                           
                average of about                                                                      
                12 hours a day                                                                        
                of daylight and                                                                       
                more than 300                                                                         
                days a year, on                                                                       
                average, are                                                                          
                sunny.                                                                                

                                                                                                      

                Jan              Feb    Mar    Apr    May    Jun    Jul    Aug    Sep    Oct    Nov   Dec

                20.9             21.9   24.1   26.4   28.2   28.5   28.4   27.9   27.2   25.9   24    22
  ------------- ---------------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ----- -----

*Source: Statistics from Post's interviews with Sanya Government
officials, 2006*

**The hotel and restaurant sector is booming, but limited demand for
western foods is at the restaurants of five star hotels**

With Sanya government's support of tourism, the hotel sector has grown
dramatically. The Hoteliers Association frequently organizes forums to
provide dialogue between the Sanya government and hotels. The local
government also works closely with five star hotels to promote Sanya
throughout Asia, with plans to promote Sanya globally.

However, when it comes to whether a hotel will consider using imported
food, one hotel manager stated "only if a the charge for an hotel room
exceeded \$92 (700 RMB) per night." One F&B manager stated that food
costs were higher in Sanya relative to other cities due to required air
transport of selected items which makes margins slim and the use of
imports less likely.

Sanya is a relatively new tourist destination to many Chinese which make
up 60 percent of total visitors *(refer to Appendix 1 -- Profile of the
Typical Tourist in Sanya).* The recent development of Sanya as China's
only southern tourist destination creates keen competition for northern
holiday destinations such as Qingdao and Dalian. Sanya, which didn't
boast a single international hotel in the past decade, now has 15 five
star hotels and 30 four star hotels. There are also about 120 three star
hotels.

In addition to attracting tourists from China, Sanya has great potential
in attracting overseas tourists. This is evident in the increasing
number of international flights into Sanya. In recent years, foreign
tourists from Europe, i.e., England, Germany, France and Scandinavia,
have been increasing, but they tend to visit other parts of China as
well so Sanya represents a two to four day stay for Europeans which make
up 20 percent of total visitors. Tourists from Russia and the former
Soviet Republic make up 10 percent of total visitors who tend to stay
for two weeks to enjoy the warm weather and sandy beeches. Many hotel
managers estimate there will be a boom in tourists from these countries,
and hopefully from Japan. Visiors from other Asian countries represent
10-15 percent. Many of the tourists who come to Sanya enjoy beach sports
such as diving and swimming. Other attractions include scenic spots such
as hot springs, small nearby islands known for their beaches and caves,
and scenic spots such as "End of the World". Dadonghai Bay offers diving
during the day and nightlife along Dadonghai beach, home of seafood
restaurants and beachside bars. In addition, Sanya has a growing
reputation as a golfing paradise, with two in the city and four under
construction. The trade believes ten will be needed within a decade.

Food preferences among these tourist groups differ in Hainan Island.
Tourists from China and other Asian countries prefer Chinese food or
Asian food. Therefore, their preference for western food is not as
strong as that of expatriates who live in Sanya and that of western
tourists. For the nouveau-rich Chinese and Asian tourists such as
Japanese and Korean businessmen who stay in top hotels in Yalong Bay,
western food prices are not deciding factors as much as familiarity. For
example, many Japanese and Korean businessmen visit Sanya regularly with
golfing in mind. Just like many Chinese, they are more fond of oriental
dishes than western dishes. For the Chinese and Russian who stay in
mid-class hotels, they patronize budget restaurants, therefore the price
of the meal is as important as type. Russians come in groups on
chartered flights. They may try Chinese food, i.e., local seafood or
local "western food", but prefer Russian food in Russian restaurants in
Dadonghai Bay. Hotels where U.S. products should be promoted is at the
five star hotels with clients that can afford them.

Recently, many Sanya hotels in Yalong Bay target business visitors who
normally stay two to four days by promoting Sanya and hotel service as
an ideal destination for meetings, conventions, exhibitions and
weddings. These hotels focus on attracting commercial tourists from
major cities in China, other Asian countries and Europe.

Most of Sanya's hotels are in Yalong Bay, Dadonghai Bay and Sanya Bay.
Some of them are in Sanya proper. In addition to these developed resort
areas, Haitang Bay will be developed within five to eight years and
include hotels, hospitals and schools according to Sanya government
sources. Haitang Bay is about 30 minutes west of Sanya. Seven
corporations have been approved to build international holiday resorts
in Haitang Bay to attract more tourists.

-   *[Yalong Bay]{.underline}*, 15.5 miles east of Sanya, and about 30
    minutes from the downtown area, is considered the most beautiful bay
    area and, therefore, the most popular tourist destination in Sanya.
    The Yalong Bay National Holiday Resort area is where over ten first
    class five star hotels are located. The first Chinese five-star
    hotel in Yalong Bay,

![](media/image8.wmf){width="5.551388888888889in"
height="3.5680555555555555in"}

*is the Gloria Resort* built in 1996 and located at the center of Yalong
Bay with the best ocean views. Following on the heels of the *Gloria*,
top international hotels set up shop in rapid succession, i.e., the
*Sheraton (2002), Marriott (2004), Hilton (2005), Mandarin Oriental* and
*Holiday Inn* are all in *Yalong Bay*.

-   *[Dadonghai Bay]{.underline}* is south of Yalong Bay and west of
    Sanya. It takes 10-15 minutes by car to the downtown area from
    Dadonghai Bay. There are over 50 locally owned and operated hotels
    in Dadonghai Bay, catering mostly to many Chinese family and Russian
    tour groups. There is a diving base in Dadonghai Bay. In addition,
    nightlife along Dadonghai beach is also quite dynamic. Most of the
    action is on Yuhai Lu, where there are rows of seafood restaurants
    and beachside bars. Chinese seafood and Hainan specialties are the
    dishes most commonly ordered.

-   *[Sanya Bay]{.underline}* is still developing. It is in the west of
    the city and has a 9.3-mile stretch of white sandy beach, catering
    to mostly to Chinese groups on cheap package tours. There were
    almost no international hotels in Sanya Bay until this past January
    when the five star *Kempinski Hotel* was opened, probably because
    there is no open space left in Yalong Bay. Post believes that when
    Kempinsiki Hotel opens in Sanya Bay, the government will focus on
    the developing Sanya Bay.

The hotel boom in Sanya has increased demand for experienced staff,
especially those who have worked in the service sector and who can speak
English. Top international hotels in Yalong Bay lure the most talented
employees.

Within five years, increasing numbers of Chinese will gain exposure to
western culture, and awareness towards western cuisine will also
increase as well as demand.

##### 

##### Where visitors and locals dine (outside of hotels)

![](media/image9.png){width="2.1215277777777777in" height="1.41875in"}

The Chinese restaurant sector in Sanya is expanding. In addition to
restaurants in the five star hotels in Yalong Bay, Sanya boasts many
local seafood restaurants in the Dadonghai Bay and Sanya Bay area.
Thanks to abundant seafood resources in the surrounding South China Sea,
these local restaurants serve many fresh dishes. Tourists can also enjoy
inexpensive seafood on the floating restaurants near Sanya's fishery
area.

Because there is so much variety of Chinese foods in Sanya, interest in
western food is overshadowed. One reason is due to the lack of proper
promotion of western foods. Another is that local restaurants do not
serve true western foods and are only available at international hotel
restaurants. Post visited over ten 'mid- to high- level "western
restaurants" in Sanya (that weren't in hotels) and only one was
authentic. In addition, only a few restaurants offered menus in English
or with pictures to illustrate dishes. Service was poor. Post also
observed that the wait staffs could not speak English. As for Western
fast foods restaurants, there was one *McDonald's* and one *KFC*
downtown. This strongly indicates that Sanya is still in its infancy
when it comes to western foods.

Most local residents prefer only local Chinese foods because of its
affordability and familiarity. Unlike in Guangdong or Fujian province,
they are not familiar with imported foods, in particular, with western
foods. Even if they were familiar, they cannot always afford them.
![](media/image10.png){width="2.1305555555555555in"
height="1.5722222222222222in"}

In light of limited opportunities for western food in local restaurants,
post recommends that U.S. food exporters focus on selected high-end
hotels, i.e., in Yalong Bay, if they want to promote products. However,
U.S. exporters will encounter several challenges. For example, post
learned that most of the five star hotels use locally produced food and
ingredients due to lower cost and under-developed import networks for
U.S. food items. For example, there are few importers in Sanya.
Therefore most imported food items are brought into the city via Haikou
(in northern Hainan) from Guangzhou or Shanghai. It is difficult for
most U.S. food products to compete with Chinese domestic products on
price and availability.

The one U.S. product that could be the most promising in terms of
promotion is U.S. beef, which contacts spoke enthusiastically about.
Although U.S. beef has not been officially available in China, there is
optimism among those interviewed that U.S. beef will be in great demand
once the market is reopened. In fact, many F&B managers in these hotels
admitted that they are now using Australian beef but would be very
interested in promoting U.S.
beef.![](media/image11.png){width="1.7284722222222222in"
height="1.46875in"}

Unlike U.S. beef, U.S. pork is available in high-end hotels and in some
western restaurants, but the price is generally too high compared with
local pork or Mongolian pork. One western restaurant tried to
differentiate itself from competitors by promoting U.S. pork in Sanya
but discovered that most of its customers preferred the cheap local dark
pork and couldn't really tell the difference

Sanya is a competitive market for U.S. fruits and seafood products. For
example, Red Delicious apples, Sunkist oranges, and California Red
Globes and table grapes are found in high-end hotel restaurants as gifts
in special VIP hotel rooms. However the imported fruits meet keen
competition from local tropical fruits because supply is plentiful, the
cost is lower, and the distribution is easier. In addition, it is hard
for imported seafood to compete with local seafood.

![](media/image12.png){width="2.3958333333333335in"
height="1.6923611111111112in"}

Another challenge to the import of U.S. seafood is the growing market
share dominated by other western countries. For example, the Norwegian
government each year invests substantially in promoting their seafood
products. From August to September, Norway selects 15 cities in China in
which to promote Norwegian salmon. They bring chefs from Beijing to
Sanya and invite Food and Beverage Managers to participate in a cooking
seminar and learn new ways to promote Norwegian salmon in their hotels.
Post interviewed several Sanya's five-star hotels; they felt these
educational events were worthwhile.

![](media/image13.png){width="2.2291666666666665in"
height="1.6076388888888888in"}

U.S. wines, known in Sanya for high quality and reasonable prices, have
presence in some high-end hotel restaurants. However, wines from France
and Australia gain more market share because they are more aggressively
promoted (i.e., tastings, discounts, gifts of wine, etc.) by wine
traders and Sanya hotels and restaurants. Therefore, it is essential for
U.S. wine companies to build good relationships with the F&B managers at
Sanya's five star hotels and restaurants as well as with local wine and
hotelier associations. ASC Fine Wine Company has sent a special team to
work closely with these hotels and restaurants in Sanya.

Post was informed that the hotels in Sanya always work individually.
This is another obstacle to promoting U.S. food products. However, more
hotel managers want to change this practice to reduce cost. Therefore,
recently, the *Hilton*, the *Sheraton* and the *Resort Intime* hotels
worked together to place a substantial order for turkeys. It is
estimated that in the near future, these hotels will place more similar
joint-purchases.

**Retail sales of U.S. food is limited**

Retail commerce in Sanya is just beginning. Apparently, foreign retail
giants showed little interest in Sanya due to small market size, as
Hainan's total retail sales of US\$2.5 billion per year are the lowest
among the nine Pan-PRD provinces. Most importantly, local residents' low
incomes limit purchasing power. The major retailers in Sanya are locally
owned. They are *Summer Mall*, *Pearl Plaza, YiFang Shopping Center*,
all located in downtown area.

There are two major obstacles to the promotion of U.S. products in local
retailers. The first is the lack of demand for western food items. The
second is the lack of sufficient promotion skills in these local
retailers. For example, upon a visit to these local retailers, one can
find almost no imported items available on shelves; the products are
poorly displayed; there is no promotional atmosphere, etc. However post
found a large display of "Dove" chocolates in one local supermarket
called "Wanghao". Although all were produced in Mainland China, this
observation indicates that there is demand for chocolate, which is a new
product for the Chinese. Post assumes customers who buy these chocolates
are foreigners, tourists from other mainland cities as well as local
Sanya residents. However, based on all the above-mentioned observations,
post concludes that may not be the right time for U.S. food exporters to
position their market in Sanya.

As most five star hotels are in isolated bay areas, such as Yalong Bay,
tourists at these hotels have to take a 20-30 minute drive to downtown
Sanya for grocery items or to shop in local department stores. They will
not find many western food items otherwise common in bigger cities. Some
hotel managers are considering building large retail shopping facilities
within hotel areas. Post believes that within five years, many
new-concept resorts that combine hotel and retail space will be
introduced to Sanya.

**Summary**

Currently, the most promising sector for U.S. food is in the five star
hotel restaurant sector. Sources believe U.S. beef is the most promising
item, while wines and fruits have a niche. However, post repeatedly
heard that wine was not adequately promoted. With more new hotels and
restaurants being built in Sanya as well as construction of Haitang Bay
in five to eight years, more tourists from around the world with
disposable income will visit Sanya, the beautiful tropical paradise, and
demand for western food will increase.

\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--

*This article was written by May Liu, Agricultural Marketing Specialist,
for ATO Guangzhou. She may be reached for comment at May.Liu@usda.gov*

####### Appendix: Table 1 - Profile of Typical Tourist in Sanya 

+-----------+----------+----------+-------+------+--------+---+---------+
|           | Profile  |          |       |      |        |   |         |
|           | of       |          |       |      |        |   |         |
|           | Typical  |          |       |      |        |   |         |
|           | Tourist  |          |       |      |        |   |         |
+-----------+----------+----------+-------+------+--------+---+---------+
|           | Chinese  |          | Other |      | R      | O |         |
|           | (Midd    |          | Asian |      | ussian | t |         |
|           | le-class |          | coun  |      |        | h |         |
|           | family,  |          | tries |      |        | e |         |
|           | busi     |          | (J    |      |        | r |         |
|           | nessmen, |          | apan, |      |        | w |         |
|           | visitors |          | K     |      |        | e |         |
|           | from     |          | orea) |      |        | s |         |
|           | Hong     |          |       |      |        | t |         |
|           | Kong,    |          |       |      |        | e |         |
|           | Macau &  |          |       |      |        | r |         |
|           | Taiwan)  |          |       |      |        | n |         |
|           |          |          |       |      |        | V |         |
|           |          |          |       |      |        | i |         |
|           |          |          |       |      |        | s |         |
|           |          |          |       |      |        | i |         |
|           |          |          |       |      |        | t |         |
|           |          |          |       |      |        | o |         |
|           |          |          |       |      |        | r |         |
|           |          |          |       |      |        | s |         |
+-----------+----------+----------+-------+------+--------+---+---------+
| Length of | 2-3 days | Long     | One   |      | Two    | 3 |         |
| stay      | on       | week on  | week  |      | weeks  | - |         |
|           | business | vacation |       |      | to one | 4 |         |
|           | trip     |          |       |      | month  | d |         |
|           |          |          |       |      |        | a |         |
|           |          |          |       |      |        | y |         |
|           |          |          |       |      |        | s |         |
|           |          |          |       |      |        | o |         |
|           |          |          |       |      |        | n |         |
|           |          |          |       |      |        | r |         |
|           |          |          |       |      |        | o |         |
|           |          |          |       |      |        | u |         |
|           |          |          |       |      |        | t |         |
|           |          |          |       |      |        | e |         |
|           |          |          |       |      |        | t |         |
|           |          |          |       |      |        | o |         |
|           |          |          |       |      |        | o |         |
|           |          |          |       |      |        | t |         |
|           |          |          |       |      |        | h |         |
|           |          |          |       |      |        | e |         |
|           |          |          |       |      |        | r |         |
|           |          |          |       |      |        | c |         |
|           |          |          |       |      |        | i |         |
|           |          |          |       |      |        | t |         |
|           |          |          |       |      |        | i |         |
|           |          |          |       |      |        | e |         |
|           |          |          |       |      |        | s |         |
+-----------+----------+----------+-------+------+--------+---+---------+
| Social    | Bus      | Midd     | Bu    |      | Busine |   |         |
| status or | inessmen | le-class | sines |      | ssmen, |   |         |
| b         | gove     | family   | smen, |      | f      |   |         |
| ackground | rnmental | from big |       |      | amily, |   |         |
|           | o        | cities   | go    |      |        |   |         |
|           | fficials | like GD, | lfers |      |        |   |         |
|           | &        | Fujian,  |       |      |        |   |         |
|           |          | S        |       |      |        |   |         |
|           | managers | hanghai, |       |      |        |   |         |
|           |          | Beijing, |       |      |        |   |         |
|           |          | Chengdu  |       |      |        |   |         |
+-----------+----------+----------+-------+------+--------+---+---------+
| Travel    | Every so | Once or  | Every |      | Mainly |   |         |
| frequency | often    | twice a  | so    |      | in     |   |         |
|           |          | year     | often |      | winter |   |         |
+-----------+----------+----------+-------+------+--------+---+---------+
| When to   | Year     | Spring   | Year  |      | Winter |   |         |
| visit     | round    | F        | round |      |        |   |         |
|           |          | estival, |       |      |        |   |         |
|           |          | May      |       |      |        |   |         |
|           |          | Labor's  |       |      |        |   |         |
|           |          | day,     |       |      |        |   |         |
|           |          | October  |       |      |        |   |         |
|           |          | National |       |      |        |   |         |
|           |          | day      |       |      |        |   |         |
|           |          | holidays |       |      |        |   |         |
+-----------+----------+----------+-------+------+--------+---+---------+
| Reason    | Business | Family   | Golf, |      | Enjoy  |   |         |
| for       | meeting  | g        | bus   |      | warm   |   |         |
| travel    |          | athering | iness |      | w      |   |         |
|           |          | &        | me    |      | eather |   |         |
|           |          | tourism  | eting |      |        |   |         |
+-----------+----------+----------+-------+------+--------+---+---------+
| Favorite  | Chinese  |          | Jap   | Ko   | Soup,  |   | Western |
| food      | seafood  |          | anese | rean | salad, |   | food    |
|           | (fresh & |          | food, | f    | C      |   | and     |
|           | hot      |          | Ch    | ood, | hinese |   | Chinese |
|           | pot),    |          | inese | Chi  | s      |   | seafood |
|           | Hainan   |          | se    | nese | eafood |   |         |
|           | spe      |          | afood | sea  |        |   |         |
|           | cialties |          |       | food |        |   |         |
|           | and      |          |       |      |        |   |         |
|           | spicy    |          |       |      |        |   |         |
|           | food     |          |       |      |        |   |         |
+-----------+----------+----------+-------+------+--------+---+---------+
| Where     | 5-star   | 3 star   | 5     |      | Yalong |   |         |
| they stay | hotels   | hotels   | star  |      | Bay,   |   |         |
|           | in       | in       | h     |      | Sanya  |   |         |
|           | Yalong   | D        | otels |      | Bay,   |   |         |
|           | Bay      | adonghai | in    |      | or Da  |   |         |
|           |          | or Sanya | Y     |      | Dong   |   |         |
|           |          | Bay      | along |      | Hai    |   |         |
|           |          |          | Bay   |      | Bay    |   |         |
|           |          |          |       |      | (      |   |         |
|           |          |          |       |      | hotels |   |         |
|           |          |          |       |      | vary   |   |         |
|           |          |          |       |      | from 3 |   |         |
|           |          |          |       |      | to 5   |   |         |
|           |          |          |       |      | star)  |   |         |
+-----------+----------+----------+-------+------+--------+---+---------+
| Where     | Hotel    | Local    | Hotel |      | Resta  |   |         |
| they dine | rest     | Chinese  | r     |      | urants |   |         |
|           | aurants, | Res      | estau |      | in     |   |         |
|           | high-end | taurants | rant, |      | do     |   |         |
|           | Chinese  | at cheap | r     |      | wntown |   |         |
|           | res      | prices   | estau |      | area,  |   |         |
|           | taurants |          | rants |      | W      |   |         |
|           |          |          | in    |      | estern |   |         |
|           |          |          | dow   |      | style  |   |         |
|           |          |          | ntown |      |        |   |         |
|           |          |          | area  |      |        |   |         |
+-----------+----------+----------+-------+------+--------+---+---------+
| Hobbies & | Hiking,  | S        | Go    |      | Swi    |   |         |
| favorite  | diving,  | wimming, | lfing |      | mming, |   |         |
| a         | golfing  | sigh     |       |      | sight  |   |         |
| ctivities |          | tseeing, |       |      | seeing |   |         |
|           |          | hiking   |       |      |        |   |         |
+-----------+----------+----------+-------+------+--------+---+---------+
| Average   | 60%-70%  |          | 10    |      | 2      |   |         |
| tourist % |          |          | %-15% |      | 5%-30% |   |         |
+-----------+----------+----------+-------+------+--------+---+---------+

*Source: ATO/ GZ's visits and information provided by Sanya Hotels and
Restaurants. Percentage of tourists vary by different season*

**Appendix: Table 2 - Hotels carrying U.S. wines in Sanya in 2006**

*Source: ATO/GZ's visit, information provided by ASC wine company*

**Appendix: Table 3 - Activities in Sanya**

Sanya is alive and kicking the year round with festivals and gala events

  ---------------------------- ----------------- -------------------------
  **International Coconut      3rd day of the    The Li and Miao
  Festival and Li and Miao     3rd moon of the   nationalities celebrate
  Festival**                   lunar year (March life and love with
                               3)                traditional dance and
                                                 food.

  **International Labor Day**  May 1             Celebration honoring
                                                 workers of every
                                                 nationality.

  **Duanwu Festival Dragon     5th day of the    Dragon Boat enthusiasts
  Boat Festival**              5thmoon of the    gather to pit their
                               lunar year (May   skills and strength
                               5)                against each other and
                                                 the sea.

  **Mid-autumn Carnival at the 15th day of the   Sponsored by the Sanya
  Remotest Corner of the Earth 8th moon of the   Tourism Investment Co
  Resort (Tianya Haijiao).**   lunar year        Ltd.

  **Double Ninth Festival on   9th day of the    Sponsored by the Tourism
  Nanshan Cultural Tourism     9th moon of the   Bureau of Nanshan in
  Zone**                       lunar year        celebration of longevity.
                               (September 9)     

  **International Wedding      November 18       Newlyweds and
  Festival at the Remotest                       long-married couples
  Corner of the Earth Resort                     celebrate their vows on
  (Tianya Haijiao).**                            the beach.
  ---------------------------- ----------------- -------------------------

###### 

###### Appendix: Table 4 - Recommended Restaurants in Sanya

  -------------------- -------------- ------------------------------------
  **Restaurant Name**  **Area**       **Additional Information**

  Dongjiaoyelin        Dadonghai      English menu for local seafood

  Ai Wanting           Dadonghai      English menu for Hunan spicy food
                                      and seafood

  Chatter Box Café     Dadonghai      English menu

  Rainbow Café         Dadonghai      English menu

  Dongbeiren Noodles   Dadonghai      No English Menu
  and Dumplings                       

  Bai Guo Bu Yi        Downtown       Spicy Food with pictures, no English
                                      menu

  Versailles           Downtown       English Menu, Asian/ Western Food
  Restaurant & KTV                    

  Essence of Europe    Downtown       English Menu, Western Food

  Haiya Local Food     Downtown       No English menu, no pictures, local
                                      seafood

  Times Café           Downtown       English menu, western style

  Liguo local          Downtown       No English Menu, no pictures

  Yuan Xing Long local Downtown       No English Menu, but with some
  food                                pictures

  Mediterranean        Downtown       English Menu. Good decoration, good
  Restaurant                          price, offering Italian Pizza

  Armando Barbecue     Downtown       Brazil BBQ
  Buffet                              

  Winner Pizza         Downtown       English Menu

  McDonald             Downtown       Fast Food

  KFC                  Downtown       Fast Food

  IZE for seafood and  Yalong Bay     English Menu
  fine wines in Hilton                
  Resort                              

  Pastry/Korea Cuisine Yalong Bay     English Menu

  Thai Restaurant in   Yalong Bay     English Menu
  Mangrove Tree Resort                
  -------------------- -------------- ------------------------------------

*Source: ATO's visit and information provided by
[www.sunnysanya.com](http://www.sunnysanya.com/)*