Fri, November 06, 2009
A decade-long courtship between the central government and the Walt Disney Co has resulted in plans to bring Mickey Mouse and his crew to the Chinese mainland as soon as 2014.
The news sent a shockwave across the country, with most news websites putting it atop their homepages, and TV networks hightlighting it in prime time.
Although skeptics are questioning whether local consumers will embrace it, and whether it can survive amid the already heated domestic amusement park competition, most of the leading Chinese economists and business analysts, including Wan Jun and Yin Zhongli with the Chinese Academy of Social Sciences, contacted by the Global Times said they were positive on the outlook of the park, as 19 out of 22 said it will be a profitable project.
The Shanghai Municipal government approved construction of the Disneyland theme park, which looks to cost 25 billion yuan ($3.6 billion) and cover 7 square kilometers, according to Shanghai officials who spoke with Xinhua Wednesday. Other details were limited.
"The Project Application Report for a Disney theme park in the Pudong district of Shanghai has received approval from the relevant authorities of the central government of China," Walt Disney said in a statement. The park will feature "characteristics tailored to the Shanghai region."
The Shanghai Park would be part of a major push into China by the California-based company, which reported in July a 19 percent drop in profits, year-on-year, from its parks and resorts during the third quarter of its current fiscal year.
Hong Kong Disneyland opened in 2005. Industry analysts have reported that the park's attendance is second in the region to Ocean Park by about half a million people, according to the Themed Entertainment Association.
Disney has never publicly disclosed its Hong Kong attendance figures, but the South China Morning Post, quoting sources familiar with the park, has said that attendance this year is expected to edge up slightly to 4.5 million. The annual number of visitors has see-sawed, reaching about 5.2 million in the first year, then dropping to 4.17 million before rebounding to 4.48 million in 2007-08.
The Shanghai park will be Asia's third Disney-themed offering, after Hong Kong's and Tokyo's, which opened in 1983.
Hong Kong Secretary for Commerce and Economic Development Rita Lau said China can afford to have two Disneylands, saying, "Our nation has 1.3 billion people, and its economic development provides huge potential for the market."
Hong Kong Tourism Board Chairman James Tien told reporters that the impact of Shanghai Disneyland on Hong Kong wouldn't be significant, because nearly half of the 1.6 million mainland tourists visiting Hong Kong Disneyland are from Guangdong Province.
In the Global Entertainment and Media Outlook: 2007-2011, a report released by consultancy firm PricewaterhouseCoopers, it was noted that the Asia-Pacific region will eventually become the world's fastest-growing in terms of theme parks.
The total consumption is estimated to increase from $6.2 billion in 2006 to $81 billion in 2011, with an annual increase of 5.5 percent. Total visitors are expected to increase from 244 million in 2006 to 284 million in 2010, with an annual increase of 3 percent.
The report also indicated that the main reason for the development is the increase of disposable income in China and India.
Nonetheless, Disney's ability to turn a profit in Shanghai remains in question, especially with its high estimated construction costs.
Several big State-owned firms in Shanghai plan to form a joint venture with Disney to invest in the project, local officials told Xinhua without citing examples.
An opinion carried by the Beijing News yesterday urged transparency over the project, arguing that State-owned companies will hold a 57 percent stake in the park.
"The government cannot dictate the decision-making in public financing on the project," it said, adding that taxpayers are entitled to relevant information and their voices should be heard.
Ren Kelei, president of the Oversea Chinese Town Group (OCT), the parent company of Happy Valley, a major domestic theme park group that has operations in Beijing, Shanghai, Chengdu and Shenzhen, expressed optimism in the Disney deal.
"Disney coming to the mainland won't hinder the development of other theme parks. Instead, it will promote local brands and boost the growth of the entire industry," Ren said in a statement obtained by the Global Times yesterday.
He insisted that business at his park in Shenzhen, a neighboring city to Hong Kong, is doing well, with 2008 attendance of 5 million and profits exceeding HK$200 million.
Zhang Yiwu, a professor of culture at Peking University, told the Global Times yesterday that, "as the consuming market in China is booming, accompanied by the rise of the youngsters' consumption capabilities, the market is vast enough for Disney to make a killing."
"The launch of a Disney theme park in Shanghai will definitely boost the price of the land around the site sharply, and people forced to leave their homes can benefit. But for me, the Tokyo park is more attractive," said a Shanghai real estate company manager surnamed Chen.
A Beijinger surnamed Yang also noted that "it'll be nice to have access to a Disneyland without going through the trouble of visa stuff."
