HNA Tourism：Developing industry fund to boost the sustainable development of regional tourism

Company profile
 
Founded in March 2007, HNA Tourism, with outbound tourism as the core business, fully develops airlines, hotels, tourism, finance, tourism and internet, consolidates upper and lower stream resources of the industrial chain and creates products of the consumer value chain. As one of three strategic industries of HNA Group——the core company of aviation tourism, it has spread its service network to the countries and regions in Asia, Europe and America. It owns more than 20 membership brands, including Capital Airlines, Deer Jet, Caissa, Tangla Hotel, Yi sheng jin fu (Easy Life),and Transforex and has gained customers’ trust.
 
By the end of 2015, HNA Tourism has been the top five Chinese tourism groups with management assets of more than 140 billion yuan, and revenue of more than 36 billion yuan. The company has provided more than 30,000 jobs for the society and its annual average visitors reach 30 million people times.
 
Challenges
 
The World Travel and Tourism Council estimated that in 2015, China's tourism revenues had reached more than 4 trillion yuan and the number of mainland citizens for outbound tourism hit 120 million person-times, showing that China’s tourism industry has entered the golden age for rapid development. At the same time, problems such as the rise in ticket prices, forced consumption, unlicensed taxi, and pollutions in scenic area, also appeared. The root of it is that, it is hard to meet the huge market demand when we solely rely on the government investment and incubation and the insufficient tourism supporting infrastructure caused many tourism chaos. Many regions are lack of professional evaluation and audit in the development process, and see the economic benefits as the only benchmark. When they ignore the environment and social carrying capacity, tourism resource are developed improperly. Some regions are lack of experience in tourism management or with old modes so that the big traffic flow volume in sort time has irreparable impact on the local ecological environment and sustainable development. The toruism industry needs to speed up the transformation and upgrading.
 
Solutions
 
Guide social capitals to invest in the local tourism projects
 
Characterized by heavy investment, long period and slow effect and due to the lack of appropriate mortgage for banking financing, industrial investment in tourism mainly depends on funds at the disposal of enterprises, and general investors are unwilling or unable to invest in it. HNA Tourism establishes the tourism industrial investment fund to pool the dispersed social capitals, which breaks the space limitation for capital sources and solves the problem of a narrow financing channel effectively. Besides, the company develops a normative financial mechanism to guide social capitals to invest in the local tourism projects directly so as to form a sound economic cycle and to improve the allocation efficiency and operation efficiency of capital. Taking the Beijing tourism development fund as an example, HNA Tourism breaks the regional limitation on the sources of funding and absorbs social capitals out of Beijing extensively to realize the amplification of government funds, thus expanding the financing channels for local tourism industry.
 
Professionalize audit and evaluation
 
After the foundation of the fund, HNA Tourism sets up strict audit and evaluation standards and procedures for investment projects. The company has its focuses on tourism infrastructures in need of development and tourism industry segments in need of support. As for projects and companies meeting the basic requirements, HNA Tourism takes market potentials, management practices and financial transparency into full account to evaluate the economic, environmental and social values of the project in an all-around manner, which helps to eliminate projects failing to pass the environmental evaluation and having poor growth, thus avoiding the blind exploitation and destruction of tourism resources and facilitating the scientific, intensive and sustainable development of tourism industry.
 
Provide professional experience and service on tourism resource development and management  
 
Those projects going through the evaluation are operated by investment management teams composed of experts. HNA Tourism makes full uses of its advantages in tourism whole elements, including eating, lodging, tripping, sightseeing, shopping and recreation, and in the development of whole industry chain to provide financial and tourism professionals for the incubation of the project. The company also introduces various resources like advanced technologies, management concepts, brands, and channels to lead incubation projects and enterprises to grasp the strategic development direction, to improve enterprises’ performance in management and decision-making , and to cultivate a professional talent team of its own gradually.
 
Achievements
 
Social benefits
 
Enhanced the carrying capacity of regional tourism resources and environment
 
During the project evaluation period, the long-term development of tourism resources and environmental influences are fully considered. Non-intensive and environment unfriendly projects with poor economic performance are eliminated to impel the scientific, green and reasonable exploitation of local tourism resources and to strengthen the protection for the local ecological environment from the source. Meanwhile, built on its rich operation experience in tourism industry and listed platform, HNA Tourism uses the operation mode of fund to accelerate the development of regional tourism economy, to push the innovation and integration of regional tourism resources, and to promote the application of new energy vehicles, thus forming a tourism resource cluster of scale, which weakens the time limitation for regional tourism and helps to defuse tourists. Finally, a good situation that off-peak season is not slack and peak season is controllable is formed. Damages caused by over-exploitation of a single tourism resort to ecological environment is reduced and the self-restoration capability of the scenic spots is improved.
 
Promoted the optimization of local tourism industry structure and regional economic development
 
HNA Tourism industry fund adds capital momentum to the regional tourism, which further promotes the integration and upgrading of tourism resources and drives the development of relevant industries at the same time, thus saving power for the long-term development of local economy and the optimization of local tourism industry structure. By the end of May, 2016, HNA Tourism has set up 6 funds, namely Beijing tourism development fund, Hainan tourism industry development special fund, Shandong Haibin tourism development fund, Hebei tourism development fund, Shandong Jining cultural tourism development fund, and fostered many enterprises with a good impetus of development, like Caissa Touristic, Capital Helicopter, E-Life Financial, Deer Jet, Joy Time Technology, and so on. Among these, Caissa Touristic has been listed successfully in November, 2015, and Capital Helicopter has entered the new three board in June, 2015.
 
Economic benefits
 
Diversified the industrial structures of HNA Tourism
 
Industry fund drives HNA Tourism to participate in the elements consideration and the development of the whole chain in tourism industry from the perspective of fund investment banking. in exploring Tourism + Finance mode, HNA Tourism gives full play to its financial derivative ability, promotes the diversification of industrial structure and improves the value chain, which serves HNA Tourism to have a rapid progress for internationalization and forms win-win pattern with the development of the industry.
 
Prospect
 
In 2015 China Tourism Industry Promotion Symposium, Mr. Li Jinzao, Director General of China National Tourism Administration, pointed out that the next 20 years will be a better and faster development period for Chinese tourism industry. HNA tourism will continue to help promote the integration of tourism resources and the benign circulation of tourism economy to propel the development of China's tourism industry to transfer from extensive development to the quality development, serve the local community to be a harmonious society and create value for all stakeholders.