(Yicai Global) May 26 -- Covid-19's ripple effects have slowly made their way to the shores of "China's Hawaii."

Beijing Tourism Group has sold China's first all-pool villa resort Banyan Tree Sanya to the provincial government at a discounted price to overcome the global traveling halt caused by Covid-19.

The seller will gain at least CNY1.6 billion (USD231.2 million) by offloading the southern luxury hotel that has nearly CNY1.5 billion in debts, Beijing Business Today reported today.

BTG did not disclose the reason behind the transfer. But this year's Covid-19 pandemic has caused devastating losses to hotels in Hainan province, prompting many to consider selling their assets, a person in charge of a luxury hotel in Sanya told Yicai Global.

The state-owned parent splurged CNY750 million (USD105.1 million) in 2016 to build the 330,000-square meter resort, one of the province's key projects.

Banyan Tree Sanya's net assets are CNY671 million below zero when deducting its liabilities from its assets of CNY860 million, according to China Beijing Equity Exchange's website.

Many hotel assets are financed by bank loans so hospitality groups need to maintain stable cash flows to repay their debts, according to an industry insider.

Editor: Emmi Laine