Hainan's economic output decreased 2.5% from a year earlier in the second quarter, according to the National Bureau of Statistics.
The slump has been attributed to visitors staying away due to lockdowns, or concerns about possible travel restrictions.
The economies of five out of China's 31 province-level regions shrank in the second quarter.
Shanghai's economic output decreased 13.7%, the biggest contraction among all province-level regions, after a citywide lockdown in April and May saw the metropolis of 25 million effectively come to a standstill.
Meanwhile, Shanghai's urban jobless rate rose to 12.5%, also the highest among all province-level regions.
Capital Beijing, which suffered its own lockdown woes, dropped 2.9% as gyms, restaurants and some public transport closed.
Jiangsu (down 1.1%), the country's second-biggest province by economic output, and Jilin (down 4.5%), battered by protracted COVID curbs from March, were the other two province-level economies to contract.
China saw 0.4% year-on-year growth at the national level in the second quarter, well short of the government's growth target of around 5.5% for 2022.
[Top image via Pixabay]