Chinese conglomerate Fosun International and South Africa's Sun City plan to build a USD$1.6 billion resort on China's Hainan island, joining a pack of players betting on a surge in upscale tourism in the country.
Long touted as a place where China could liberalize casino gambling, the balmy island off the country's southern coast has attracted scores of international developers in the past two years, including InterContinental, Starwood, and casino operators MGM Resorts and Caesars Entertainment.
The latest Hainan project, an Atlantis hotel in southern coastal city Sanya that Fosun will jointly develop with tycoon Sol Kerzner's company, will not include a casino, Kerzner chief executive Alan Leibman told Reuters news agency.
"We have been very successful with and without gaming within our business. It is nothing we have anticipated in why we are building Atlantis" in Hainan, Leibman said.
The executive put the cost of the project at "about USD$1.5 billion", while Fosun and Kerzner said in a joint statement that Fosun will invest "over CNY10 billion yuan (USD$1.63 billion)" in the project.
Casino gambling is illegal in China outside of the former Portuguese colony Macau, an hour's flight from Hainan by plane. Earlier this year, the local government shut down a casino bar that had been operating illegally in Hainan after a Reuters report drew attention to it. The bar has reopened now, according to a hotel employee.
While Chinese authorities have maintained an official ban on gambling in Sanya, tourists continue to flock to the southern island. Over 22 million overnight stays were registered in Hainan in the first eight months of the year, most of them by domestic visitors.
Kerzner, which operates the Atlantis casino resort in the Bahamas and Atlantis hotel on Dubai's artificial Palm Island, said the 62-hectare resort in Sanya, close to half the size of London's Hyde Park, will feature a luxury 1,300-room hotel.
Developed by South African tycoon Sol Kerzner, who built the Sun City empire in 1979, the Atlantis brand is known for extravagant attractions, including a six-story water slide through a shark aquarium and underwater hotel suites.
The Atlantis Sanya, scheduled to open in 2016, comes at a time when Sanya already has more than 200 hotels and an aggressive pipeline for future developments as local authorities seek to tap into the growing upmarket tourism business in China.
The Atlantis Sanya will be Kerzner's first in China and targeted mainly at local clientele. Designed as a sleek dorsal-shaped building, surrounded by lush greenery, lagoons and marine attractions beside the ocean, the resort will employ more than 3,500 staff.
Haitang Bay, a 22 km strip of white sand where Atlantis will be located, will see the development of 30 five-star hotels in the next five years.
The expansion of lavish resorts targeting affluent travelers from Asia including China is taking place at a rapid pace around the region.
Macau has more than seven mega casino resorts under construction. The Philippines and Vietnam are developing large-scale integrated resorts, while China's Hengqin Island in southern Zhuhai province across the water from Macau is preparing to open the first phase of a USD$5 billion marine-themed hotel resort in November.