Shanghai Disney Resort Discussion Thread

[A113]

^ Remember, though, China has an incredibly large population that can support a Disney park---or two---on the mainland. I wouldn't be surprised to someday see Disneyland Beijing.

 

Eric

 

Yeah, that's true. I'm just saying that a Disney park in a country/continent with a lack of amusement parks (Australia and Mexico most specifically) could and may attract a larger percentage of tourism, but who knows.

[ebl]

^ I agree with you about Australia. Close to Sydney would be the obvious place for it, as the rest of the continent/country is rather barren and sparsely populated.

 

Eric

[A113]

^ I agree with you about Australia. Close to Sydney would be the obvious place for it, as the rest of the continent/country is rather barren and sparsely populated.

 

Eric

 

Exactly. I'm pretty sure a little Finding Nemo charm wouldn't hurt

[gisco]

It's all about economics. Population of Sidney is around 4 million. Population of Shanghai is around 20 million. For the people who don't think the Chinese can afford to go to an amusement park, they need to visit one of the Happy Valley Parks.

[larrygator]

Population of Australia = 22 Million

Population of Shanghai = 16 Million. I specualte that the circulation within 100 miles radius of Shanghai is probably close to 100 million.

 

For years, China has bulldozed cities and relocated the poorest of people to build factory complexes and power plants so why not amusement parks.

 

Disney characters are known and popular even in China/Asia. Why else would their be knock-off products and theming at other parks?

 

EDIT: Bob beat me to the population comment!

[Meteornotes]

Remember also that is is very difficult for people in China to travel outside of their country, so putting a Disney park in China is going to make it a lot easier for many people to visit.

 

I look forward to checking it out some day.

 

dt

[packfanlv]

You guys pretty much summed this up. The Happy Valley parks were a great first step at introducing themed parks to China and they have been successful. I think with the size of Shanghai's population, how many people live within a few hours by train and its growing popularity as an international travel destination, it is the perfect city for this park.

 

I also think that it is far enough away from Hong Kong that the two parks should both be viable. I can't wait to see some art work and for construction to get underway!!!

[ginzo]

This doesn't take a genius to figure out.

 

China is the world's third largest economy by individual country. First and second place are the US and Japan respectively, which already have multiple successful Disney parks. Sure you've got HKDL already, but it's not convenient for a great deal of the Chinese. Also, China is huge.

[jedimaster1227]

http://www.orlandosentinel.com/business/os-cfb-tourism-shanghai-121409-20091213,0,904712.story?track=rss

 

The Walt Disney Co. anticipates having a final agreement to build Shanghai Disneyland within "a few months," Chief Executive Officer Bob Iger said last week.

 

Iger told analysts at a media conference in New York that he expects it will then take five to six years to build and open the resort, which would begin with a Magic Kingdom-style theme park and amenities such as hotels and a shopping-and-dining district.

 

Disney, which has been trying to build a theme park on mainland China for years, finally won approval from the country's central government earlier this fall, clearing the way for it to negotiate a final construction agreement with local officials in Shanghai. Disney views the park as a way to build brand awareness among China's 1.3 billion residents and drive demand for its movies, TV shows and consumer products.

 

'I like that'

 

Iger said Shanghai Disneyland has the potential to develop Disney's brand in China much the way Disneyland did in the United States when it opened in 1955.

 

"Three-hundred million people live within a two-hour trip to Shanghai. That's like all of America living within a two-hour trip to Orlando," Iger said. "I like that."

[jedimaster1227]

http://www.atimes.com/atimes/China_Business/LB05Cb01.html

 

Shanghai isn't buying the Disney dream. A top political advisory body, shocked by losses at Hong Kong Disneyland, this week questioned whether the city's plans to support the opening of a theme park in 2014 would turn into a financial nightmare.

 

Shanghai members of the Committee of the Chinese People's Political Consultative Conference (CPPCC) began their annual meeting on January 25 expressing concerns about the viability of the project as Hong Kong Disneyland revealed it lost HK$1.32 billion (US$170 million) last year. At the same time, a research report shows 70% of mainland theme parks are in the red. "Hong Kong Disneyland's poor performance should serve as a warning about any economic projections that the city promises," said Lu Weimin, a Shanghai member of the CPPCC.

 

Shanghai city authorities and Walt Disney Co have yet to announce final details after Beijing in November approved construction of Shanghai Disneyland. The amusement park in Hong Kong, which increased visitor numbers last year despite the swine flu outbreak and the global financial crisis, has struggled to attract mainland visitors since it opened to great fanfare in 2005.

 

Shanghai Disneyland, to be built on the east bank of the Huangpu River at a cost about 25 billion yuan (US$3.5 billion), is expected to cover an area of 116 hectares, 10 hectares fewer than its counterpart in Hong Kong, the smallest of the five existing Disney theme parks. Walt Disney will take a 43% equity stake in Shanghai Disneyland, while a joint-venture holding company formed by a consortium of Chinese companies owned by the municipal government will own the majority 57%, the 21st Century Business Herald said. "Given the similar share structure between the Shanghai Disneyland and the Hong Kong Disneyland, the Shanghai government should look into the reasons behind Hong Kong Disney's losses," Lu said.

 

The financial performance of Hong Kong Disneyland had been difficult to judge because of Disney's initial refusal to give results and attendance figures. The numbers released a week before the Shanghai officials gathered were the company's first major admission of its struggling performance. The Hong Kong government, hard hit by the 2003 severe acute respiratory syndrome virus outbreak amid a weak economy, shouldered HK$23 billion of the HK$27 billion cost of the park to lure Disney. That translated into a 57% stake in the joint venture that runs the Hong Kong park, with Disney holding 43%. Under a new structure that is part of the expansion deal agreed last June, the Hong Kong government's stake will be diluted to 52.19%, with Walt Disney holding the other 47.81% by 2011-12.

 

"What we have been worried about is whether the contract between the Shanghai government and Walt Disney is unfair, which means that even if the Shanghai Disneyland is making a loss, Walt Disney still earns money from royalty on food, merchandise sold at the park and outside the park, management fees as well as incentive payments, with franchising arrangements," Lu said, without giving actual figures.

 

With the forecasts for the Hong Kong theme park now proved overly optimistic, Lu may have a point. The Hong Kong government predicted 11 years ago that the venture could break even as early as 2009 and no later than 2011. That is unlikely to happen when the expansion of the park is completed in 2014. The Hong Kong government said last month that the park's loss last year widened from a HK$1.574 billion loss in 2008.

 

When stating the case for Disneyland, Hong Kong's government also said attendance would be 5.6 million visitors in its first year of operation and 6.49 million in 2009, its fourth year, contributing HK$7.57 billion to Hong Kong's economy. However, according to last month's disclosure, visitor numbers in the first year of operation totaled 5.4 million. Last year, attendance was down to only 4.6 million, 29% fewer visitors than originally forecast. The value added to the economy was estimated at HK$4.4 billion, 42% less than projected. Meanwhile, the park was forecast to create about 11,000 new jobs for the first year of operation, but only 4,400 full-time jobs were created, 60% fewer than predicted.

 

From its opening until December 2009, Hong Kong Disneyland received 19 million visitors, Bill Ernest, Walt Disney's Asia-Pacific president and managing director, said on January 19. Despite the global financial crisis and swine flu scare, last year's figures were an increase on 2008, when 4.5 million went through the turnstiles, he said. From October 2008 to May 2009, it even recorded double-digit visitor growth until the swine flu broke out, Ernest said. Hong Kong Disneyland managing director Andrew Kam noted that most of the park's customer sources, such as Taiwan, Singapore, Malaysia and Australia, were affected by the financial crisis. In terms of origin, local visitors accounted for 41%, while 36% came from the mainland and the rest were international visitors. Disney officials have vowed to attract more visitors, but declined to disclose their visitor growth forecast for the next few years. Rita Lau, Hong Kong's secretary for Commerce and Economic Development, said the financial results were not as good as expected, and Disney would be urged to improve cost controls.

 

Ren Xianzheng, another member of the Shanghai committee of the CPPCC, warned that the Disneyland in the mainland's financial center would face competition for regional and international visitors from other new parks in the region, such as Singapore's ResortsWorld at Sentosa, which opened on January 20. Ren urged the Shanghai government to link the Disneyland to other theme parks in Shanghai, such as the state-owned Shanghai Wild Animal Park, when welcoming visitors in a bid to promote its theme park industry. "On the one hand, a collaboration of different theme parks could give visitors more excitement, on the other, it could help attract visitors to other theme parks which have generated less attendance and revenue in the city," Ren said.

 

Of China's 2,500 theme parks, 70% are operating at a loss, according to a survey by the Horizon Group, a strategic research and consultancy firm. With about 150 billion yuan invested in the parks, only about 10% are making a profit, which include popular theme parks in Shenzhen - Splendid China, created in 1989, and Happy Valley. In 2008, 25 million people visited Happy Valley, making it China's most popular theme park.

 

Liu Wei, a professor from the Guangdong University of Finance, attributed the losses to the small scale of most parks, and the similarity of themes in a fiercely competitive market. "Many theme parks in China are only good as a backdrop for a photo shoot, which included miniatures of nature from ethnic minorities inside China or a collection of replica historic landmarks from outside China," Liu said. "There's little interactive function. They provide some kinds of rides, but most of them are for children, but they charge 100 or 200 yuan for one ticket, which is beyond what ordinary people can afford," he said. Liu said to attract visitors, theme parks needed to add new attractions and there must be large-scale, high-tech and interactive entertainment. "With increasing wealth, people travel everywhere and see real things instead of replicas," he said.

 

In August, Guangzhou's Shijie Daguan (Grand World Park) shut its gates with a deficit after being in business for about 15 years. In 2007, east China's Hangzhou Future World shut down with 260 million yuan in lost investments. In 2000, Shanghai's 400-million-yuan-invested Universal Park closed after only four years.

 

Hong Kong Disneyland has followed the fortunes of Disneyland Paris, which lost money from 1992 until new attractions helped it end 1995 with a net profit of $22.8 million. In 2002, Disneyland Paris announced another annual profit. However, it incurred a net loss in the three years following. After realizing that it had to cater for local tastes, in 2008 Disneyland Paris was the most-visited attraction in Europe. Now turning a profit, it is Europe's top attraction with 15 million visitors a year. At present, two of the five Disneylands are in the US, one in France and one in Japan.

 

Raymond So, an associate professor at the Chinese University's Faculty of Business Administration, argued that attracting visitors to Disneylands in China would not be easy because of differences in culture and the need to cater to local tastes. “Walt Disney needs to incorporate some elements of Chinese culture into the products offered in the parks," he said, quoting the success of having Mickey Mouse and Minnie Mouse sporting traditional Chinese costume in Hong Kong Disneyland during Lunar New Year celebrations. “One of the most important factors which might affect the visitor numbers in Shanghai is that most Chinese mainlanders have not been exposed to the Disney culture since childhood, partly due to no Disney channels being broadcast in China," he said.

[ginzo]

In 2008, 25 million people visited Happy Valley, making it China's most popular theme park.

 

Is that figure accurate? Wouldn't that make Happy Valley the most visited park in the world? Far and away over anything Disney has?

[SharkTums]

^I doubt it's accurate, the Chinese seem to exaggerate their numbers when it suits their purprose. Even combining all of the Happy Valley's I can't imagine those numbers.

 

Perhaps it's something like "Since Happy Valley debuted they have seen 25 million guests."

[G-Force!]

I like this news. I believe Disney is becoming way too big for itself to realize it. All they see is profits and numbers, while I see over expansion in an already saturated market. Hey Disney, here is a word of advice: focus more on your parks you have now and improve on the quality of the Disney experience. In the long run, the benefits of quality far out weights quantity.

[ginzo]

^ I agree that quality matters. It might explain why Disney succeeds in saturated theme park markets in Europe, Japan, and the US. The two black sheep of the Disney parks right now are the ones that were built on the cheap.

 

However, "We're not going to attempt to grow" is not something that stockholders accept from a publicly-traded firm. The Shanghai area has a huge amount of people who have never seen anything like WDW. Assuming this project isn't dead, maybe Disney can succeed in yet another saturated market if they do this one right.

[rosscoe]

I like this news. I believe Disney is becoming way too big for itself to realize it. All they see is profits and numbers, while I see over expansion in an already saturated market. Hey Disney, here is a word of advice: focus more on your parks you have now and improve on the quality of the Disney experience. In the long run, the benefits of quality far out weights quantity.

,

 

 

I think thats the thing that make Tokyo Disneyland and Sea so outstanding, they are only Disney by name.

[DBJ]

At least they are realizing that building the smallest Disney park in the chain wouldn't be the best idea! The only successful new Disney park built (from day one) in recent history was done by OLC. I think it's very reasonable for them to question Disney's plans at this point. They could wind up with DCA - Disney's China Adventure - and then watch the new park underpeform and have to go through an overhaul.

[ChrisFL]

Saturated Market? By what standards? Theme park in China standards? Disney standards? If by either measure, I disagree.

 

As much as people may think it's a bad idea to build in Shanghai (and many of them legitimate), from a purely corporate standpoint...China has 1/6 of the world's population, many of whom are moving up in society. IF Disney invests properly, and builds a theme park appropriate to mainland China's tastes, then they can succeed.

 

I know often people point to Hong Kong as being a Chinese Disney park, but Hong Kong is still very different than mainland China in many, many ways.

[OldJJman]

I know often people point to Hong Kong as being a Chinese Disney park, but Hong Kong is still very different than mainland China in many, many ways.

 

 

Elissa, didn't we witness this firsthand??

 

Natasha, the Chinese girl with us in '08, didn't she have to have a special visa just to get into Hong Kong? I remember that she couldn't go with us to Macau because her visa didn't permit it.

 

So that *may* be a reason why more people from the mainland haven't gone to HKDL.

[SharkTums]

^Correct, we also had to change guides.

 

It seemed to me that Hong Kong Disney was attracting locals and Australians and that's it.

[RCFreak]

While I understand their concerns, I also think the management change since HKDL can also make a HUGE difference in what kind of park is built in Shanghai. I also disagree with the over saturation post as long as they can find the right mix of quality and quantity. No two Disney parks are the same, so it's fun to see how they mix up the Magic Kingdom concept each new time.

[rosscoe]

^Correct, we also had to change guides.

 

It seemed to me that Hong Kong Disney was attracting locals and Australians and that's it.

 

 

Tokyo Disneyland Resort is running ads in Australia ( online media ) at the moment, I think that must be the first time ever. Most people I know who have been to HKD wish they went somewhere else.

[ECZenith]

I'm pretty sure Disney knows what they're doing...

 

G-Force, you say focus on the parks they already have, well... it seems like they're doing both if you really look at it.

 

We have World of Color, Little Mermaid, Cars Land, a complete DCA overhaul, Fantasyland overhaul at WDW, Star Tours 2, Tokyo's new Fantasmic, Hong Kong Disneyland's immediate expansion to name a few. I think Shanghai Disneyland will be great for both the Disney brand and the people of China. Lastly, we (attraction fans) get a great, new theme park to look forward to. Disney has always been about great quality, and I'm not saying that just because I work for them. I work for them BECAUSE of that fact.

[jedimaster1227]

http://www.chinaeconomicreview.com/china-eye/2010_02_08/Roadworks_to_start_for_Disney_theme_park.html

 

Shanghai will begin building and renovating roads around the area in Pudong where a Disney theme park will be located.

 

Huang Rong, director of the Shanghai Construction and Transport Commission, said the construction will start this year, although he gave no specific date. Huang said the roadways will be important not only to the theme park itself, but also will be "a great help for the road network in the Pudong New Area."

 

The road projects are among the city's major construction plans, with a total budget of 160 billion yuan (US$23 billion), set by the government for this year. At least three main roads, as well as elevated roads, will be involved in the Disney access project: Zhoudeng Highway, Liufeng Highway and Xiupu Road.

 

Shanghai Daily reported there are still differences on details, such as the number and location of ramps and the width of roads, and Disney and the city will continue to talk.

[jedimaster1227]

http://abcnews.go.com/Entertainment/wireStory?id=9160382

 

China's economic planning agency has formally approved a plan to build a Disney theme park in Shanghai, giving the city a new showcase following next year's World Expo.

 

The National Development and Reform Commission said in a notice Tuesday that the long-awaited park would be built, as expected, in Shanghai's eastern Pudong district.

 

Disney has said the initial phase of the project would include a Magic Kingdom-style park tailored to the Shanghai region, mainland China's commercial and financial hub.

 

Shanghai, China's biggest city, and Disney have yet to announce final details for the amusement park.

 

Disney has gradually expanded its presence in mainland China after opening a theme park in Hong Kong in 2005 and now has offices in Shanghai, Beijing and Guangzhou.

 

Shanghai is in the midst of a construction boom ahead of the World Expo, which will open May 1.

 

Some residents were long ago moved off farmland in Chuansha, a part of Pudong district near the city's main international airport, to make way for the theme park.

[jedimaster1227]

http://www.tradingmarkets.com/news/stock-alert/dis_shanghai-disneyland-likely-to-take-5-6-years-to-build-mayor-831855.html

 

It may take five to six years for U.S. entertainment giant Walt Disney Co. to complete its Shanghai Disneyland theme park, pushing the opening to 2015 at the earliest, Shanghai Mayor Han Zheng said at the National People's Congress here.

 

The first phase of the park itself will be located on a 1.16-sq. -kilometer tract. The entire site is 3.9 sq. kilometers, with the remaining 2 .74 sq. kilometers slated for commercial facilities and parking. The resort will be smaller than Hong Kong Disneyland, which at 1.26 sq. kilometers is currently the smallest Disneyland park.

 

China's National Development and Reform Commission has already formally approved the resort, and city officials are negotiating with Disney over how it will be operated. There is some concern that once Shanghai Disneyland opens, those on the Chinese mainland will go there, reducing patronage at the Hong Kong park. However, Han said, "The two cities are brothers and will work together."