“I haven’t sold a single unit since September. There’s no way I’ll meet my sales target.”
Ms. Chen, a saleswoman at a property project in Nanjing, is utterly exasperated facing a deserted sales office. The traditional peak sales season “Golden September” is more than halfway through, yet the Nanjing property market has turned in a dismal performance, with transaction volumes down by over 50% compared to the same period last year.
Nanjing is far from alone — the traditional real estate market across the country has generally entered a deep freeze. According to a survey report from the China Index Academy, from January to August this year, both prices and sales volumes in the national property market have fallen.
In addition, the growth rate of real estate investment has dropped by 0.5 percentage points, marking a decline for seven consecutive months.
The “fading” of the traditional real estate sector has prompted a number of strong developers to shift their focus to another field to draw up new blueprints — tourism property. However, while this emerging area is full of opportunities, it is also often riddled with chaos. So, how can developers “borrow the name of tourism property to deliver the substance of meticulous development”?
Traditional real estate cools down — Industry transformation is imperative
In addition to the impact of the “New State Council No. 4 Measures” and subsequent policies, changes in the macroeconomic situation and the surfacing of deep-rooted contradictions in the property market have together delivered a “cooling shot” to the once-booming residential market. Scenes of madness like “units selling out on opening day” or “customers queuing overnight to grab a number” are gone for good. The once-glorious “land kings” and “property kings” are now in rather awkward positions. Reports say that Guangzhou Asian Games City, once the “highest-priced land deal in the nation,” saw a sudden price plunge in June this year. Similarly, the surrounding new and second-hand home prices of Beijing’s Xiajia Hutong plot — which was sold last year at a floor price exceeding 40,000 yuan per square meter — have now fallen to around that same level.
Having enjoyed a golden decade of development, the traditional real estate industry is now facing an unprecedented cold spell. Developers must shoulder the short-term survival pressure of quickly digesting inventory and recouping funds, while also considering the long-term challenge of transforming and saving themselves. Well before the turbulence began, some forward-thinking developers had already abandoned hopes of government “market rescue,” and started focusing on a new field — tourism property.
Policy tailwinds boost — Industry giants gather in tourism property
Wanda makes a high-profile entry into tourism property; Evergrande launches tourism property projects in multiple cities including Wuhan and Chengdu; Shimao hopes to spin off its tourism property division for a separate IPO; Zhonghong Holdings invests heavily to build the independent cultural tourism brand “Shinji World” International Resort… Statistics show that over one-third of the top 100 real estate enterprises have already dipped their toes into this new field.
Not only are the numbers of real estate companies involved in tourism property substantial, but so are their investments. Take Zhonghong Holdings as an example. After announcing in July that it had signed an agreement with Shanghai Film Group to develop film and television tourism property, Zhonghong’s board secretary and vice president, Jin Jie, said in an interview that Zhonghong has invested in tourism property projects in multiple provinces and cities including Beijing, Shandong, Yunnan, and Hainan, and will continue to expand. It is expected that before the end of this year, Zhonghong’s Shinji World International Resort · Beijing Yuma Fang and Changbai Mountain projects will be launched.
Why do developers have the courage to invest huge sums in tourism property development? The arrival of the leisure era and the growing demand for tourism and leisure consumption are the core drivers. Meanwhile, policy directions that place increasing emphasis on people’s livelihoods and highlight a “people-oriented” approach have also become a significant boost.
As early as the rollout of the 12th Five-Year Plan outline in 2012, it was clearly stated that “cultural tourism will be built into a strategic pillar industry of the national economy.” In July this year, the Premier presided over an executive meeting of the State Council to directly plan the development of the tourism industry, proposing to “promote the transformation and upgrading of tourism, shifting tourism products toward a balance of sightseeing, leisure, and vacation, and improving tourism services toward higher quality and efficiency.” In August, the State Council issued the “Several Suggestions on Promoting the Development of Tourism,” which focused on promoting “the integration of tourism with various industries” and “further tilting land supply toward tourism,” among other content. These were seen as key positive signals for the “takeoff of tourism property.”
Relying on superior natural resources and integrating modern service industries such as tourism, vacation, wellness, elderly care, and cultural experiences, tourism property is undoubtedly a direction for industrial development in new urbanization, as well as one of the important pathways for upgrading China’s economy. It has naturally become a much-anticipated transformation direction for many real estate enterprises.
Tourism property must borrow “name” to deliver “substance”
Although tourism property is currently riding high on favorable winds, any industry aiming to rise suddenly needs to possess its own core competitiveness, unique and advanced business models, and fresh concepts. Only then can it gain recognition from the market and the public, and truly create high-quality tourism property. Professional developers, including Zhonghong Holdings, hope to gain a first-mover advantage in this wave of tourism industry development through strategic vision and meticulous execution.
Take Zhonghong Holdings as an example. The company is fully committed to building the “Shinji World International Resort.” Targeting primarily family-oriented consumer groups, “Shinji World” is dedicated to developing comprehensive, compound leisure property products that integrate tourism and vacation, theme parks, cultural leisure, health and wellness, and high-end commerce. Its brand philosophy of “A New Fun Place for the Whole Family” deeply understands the various dilemmas faced by Chinese families: on one hand, there is a growing demand for leisure and vacation; on the other, there is a market gap for “one-stop family vacation” products. The conflict between the two leaves Chinese families, who value kinship and ethics, unable to find suitable travel options.
The “Shinji World International Resort” starts from fundamental needs, bringing together the different vacation joys of each family member. The organic fusion of themed parks, high-end commercial and business sectors, elderly care and wellness, and vacation residences allows children and parents to enjoy their own interests while also having joyful reunions. Only products that truly meet market demand can stand undefeated in a homogenized competitive landscape.
In addition, tourism property requires developers to have stronger resource integration capabilities, as well as higher planning and operational abilities. “Shinji World” features diverse and compound formats, including both saleable and holding properties. Zhonghong Holdings has long recognized that its role must shift from being a mere developer and seller to that of an asset manager, service provider, industry operator, and urban operator. The strength of its listed enterprise background and the deployment of its forward-looking transformation strategy have laid a solid foundation for this role transition.
Although tourism property is currently experiencing strong momentum, there is still a lack of mature models in China to date. Seizing the recent policy tailwinds to quickly establish models, form chains, and expand nationwide is the key to capturing greater market share and gaining the upper hand.