The Chinese government is adamant about making Hainan into a world-class tourism destination that attracts domestic and international travelers alike. This to the extent that it recently declared Hainan a “tourism free-trade zone” where unique policies to boost international tourism would be allowed. Of course, the crux of the whole international tourism ambition is to successfully strike partnerships with overseas tour operators and attract foreign free independent travelers (FITs). This is proving difficult for many reasons, and—perhaps surprisingly—sometimes because of ethical reasons.

The Atlantis, Thomas Cook, and Fosun are in the midst of an international backlash over the use of marine animals to draw in tourists

The arguably most ambitious project in Hainan so far is the Atlantis, Sanya—the torchbearer of Hainan’s luxury transformation, and a resort worthy of international attention.

The Atlantis, Sanya is a $1.74 billion marine, luxury resort, constructed by Fosun International—a Chinese conglomerate perhaps best-known as the owner of Club Med and as a major investor in Thomas Cook.

And now, Hainan, the Atlantis, Thomas Cook, and Fosun are finding themselves in the middle of an international outcry over ethical concerns over the Atlantis, Sanya’s marine wildlife held in captivity as part of the resort’s marine park.

“The dolphinarium in Sanya Atlantis is anything but a sanctuary. The conditions are appauling. [sic.] The tanks are concrete and small. The beluga whales were brutally captured in Russia and imported by Thomas Cook’s partner and shareholder Fosun. It completely fails all UK national standards. China has very little animal welfare regulation concerning marine captivity and marine experts have likened the conditions in China to that of the 60’s in Europe,” Dolphin Freedom UK, an animal welfare advocacy group writes in an analysis of Thomas Cook’s relationship to the Atlantis, Sanya.

Thomas Cook has promised to review how animals are treated at the Atlantis, Sanya

Enough attention has now been drawn to the issue that Thomas Cook has committed to doing an animal welfare audit of the Atlantis, Sanya.

The company recently pledged to end trips to parks with captive killer whales and had already removed 29 other attractions over animal welfare concerns.

It’s a challenge known to many Western companies with significant stakes in China: how do you balance your company’s ethics policies at home with adapting to China—whether it’s laws, government censorship, or simply different customer preferences.

The issue of marine animal welfare for Thomas Cooke illustrates how challenging it can be for foreign firms to balance the differences in cultural and ethical standards in the China market with company objectives

For Thomas Cook, the challenge is further compounded by the stake held in the company by Atlantis’s developer Fosun, as well as its strategic partnership with Hainan’s government.

For an up-and-coming destination like China’s Hainan, PR most certainly matters—and issues pertaining to the crown jewel of the province’s tourism transformation risk putting the entire destination in a bad light.

Indeed, a large proportion of international travelers have most likely never even heard of Sanya. If the first time they hear about it is in the context of animal welfare issues or stranded passengers, that’s a significant challenge for Beijing’s hopes to make it an internationally-renowned first-class destination. Even worse, if Western travel agencies don’t dare to add resorts and attractions in China to their repertoires, that will put Hainan’s international tourism development at significant risk of failure.

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