China's effort to build its southernmost province into a world-class tourist destination encountered a setback last year when fewer foreigners visited.

The number of foreign visitors to Hainan, China's most popular island resort, dropped by 7.3 percent year-on-year to 756,400 in 2013.

Lu Zhiyuan, director of the provincial tourism development commission, blamed fiercer regional competition and airspace restrictions for the decline.

"We need to keep our prices competitive and open more airspace for airlines," Lu said.

Tourists from Russia, Japan, South Korea and the United States, a key segment of the market, were looking elsewhere.

"Many of our potential foreign visitors choose to go to other Asian destinations, such as Thailand, Indonesia, Malaysia and Vietnam, where prices are much lower," Lu said.

"We should monitor our prices to attract global tourists," Lu said, adding that local tourism authorities are outlining a strategy to attract more foreign visitors.

However, prices are just one factor. The lack of international flights to Hainan is another.

Only 8 percent of flights to and from Hainan in 2010 were international, according to a World Travel and Tourism Council report in 2011.

Lu agreed that airspace restrictions over Hainan should be further eased for airlines.

Three new air routes to Sanya were opened in January, the Civil Aviation Administration of China said.

"It is not enough," Lu said.