Monday, March 19, 2012

Shanghai Disneyland

Shanghai Disneyland officials wouldn't say when the park will open or how much it will cost. The company stated in a press release that theShanghai park will include "characteristics tailored to the Shanghai region," but a spokesperson declined to elaborate on what types of rides or attractions might be on offer. The Shanghai government has already reserved an estimated 1,000 acres near Shanghai's international airport in the city's Pudong district. Some speculate that the Chinese government's sudden announcement that Disney could go ahead may be timed to precede U.S. President Barack Obama's first visit to China Nov. 15-18, which will include a stop in Shanghai. "It's a huge investment," says Shaun Rein, managing director of China Market Research Group in Shanghai. "By allowing this now, it gives face to Obama and really shows that China and the U.S. need to work together to get out of this financial malaise."

Although theme parks made up less than a third of Disney's total revenue of $38 billion last year, Shanghai Disneyland still figures to be a key addition to the business because it will boost the company's visibility in one of the world's fastest-growing markets. Due to government rules aimed at protecting the public from what are perceived to be unwelcome foreign cultural influences, awareness of the Disney brand in China lags that of the rest of the world. Unlike in the U.S., where Disney operates a 24-hour TVchannel and radio station, the company's presence in China is limited to a dozen hours of programming a week on local stations, five Disney-branded English-language schools in Shanghai and sales of Disney merchandise. In the past two years, Disney has produced two children's films for the mainland, The Magic Gourd and Trail of the Panda. China limits the number of foreign films that are allowed to screen in theaters to 20 a year.

The approval for park construction comes amid China's ongoing efforts to develop its tourism sector, which is expected to increase 3% this year. As disposable income in the country grows, amusement parks have proliferated throughout the country by some estimates there are as many as 2,000 but the quality of the attractions is uneven. Earlier this year, a sex-themed park in the central Chinese city of Chongqing called Love Land was torn down before it could open to the public. Shanghai, however, could be on the verge of a tourism boom. The city will host the World Expo starting in May 2010.

Since mainland Chinese make up a third of visitors to Hong Kong Disneyland, some fear that the Shanghai park will siphon tourists away from the former British colony, which is part of China but has a semi autonomous government (mainland tourists must obtain visas to visit Hong Kong). Since opening four years ago, Hong Kong Disneyland has underperformed due to its small size at 300 acres, it's the smallest of any Disney park as well as high ticket prices and competition from a nimble competitor called Ocean Park.

Shanghai Disneyland officials dismissed concerns that a new park in Shanghai will steal Hong Kong customers. "We see that Hong Kong Disneyland and the Shanghai park as complementary," said an official in an e-mail. "We believe the Greater China market is large enough to support multiple parks."


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