Disney in Shanghai promises ‘distinctly Chinese’ park

Paul Traynor
Associated Press

Shanghai — Walt Disney Co. promises a “distinctly Chinese” experience at its first theme park in mainland China with a teahouse and Minnie Mouse dolls in traditional qipao dresses alongside its trademark castle and a Toy Story hotel.

The $5.5 billion Shanghai Disneyland gives the Hollywood giant a chance to burnish the brand behind “Frozen” in the world’s most populous film market, and to revive its struggling international theme park business.

The park was opening Thursday with a lavish celebration, though the festive sentiment was tempered by grim news from Florida that an alligator killed a 2-year-old boy at Disney’s flagship Walt Disney World. The boy drowned after the animal dragged him into the water at a lagoon in the park on Tuesday.”

Shanghai Disneyland’s launch followed a decade of negotiations, five years of construction and weeks of testing that Disney chairman Bob Iger said has seen 1 million visitors try out its rides, shops, restaurants and two hotels.

Global brands like Disney are rushing to create products for Chinese tastes. The company added China-themed elements and put the emphasis on popular characters at the Shanghai park, while downplaying its American identity. At the entrance, instead of “Main Street USA,” it’s “Mickey Avenue.”

“The most important thing is that this is authentically Disney and distinctly Chinese,” Iger told reporters Wednesday ahead of the opening.

In a garden leading to its iconic Storybook Castle, Disney created a “Garden of the Twelve Friends” using characters such as Remy from “Ratatouille” and Tigger from “Winnie the Pooh” as animals of the Chinese Zodiac. Disney says the park’s Wandering Moon Teahouse, modeled on a building in eastern China, is the only Chinese-style structure in any of its parks.

Analysts expect Shanghai Disneyland to become the world’s most-visited theme park, attracting at least 15 million and as many as 50 million guests a year. By contrast, Disney’s flagship Walt Disney World in Orlando, Florida, drew 19.3 million people in 2014.

“It’s going to be a huge success. Everybody in China who has a kid or a grandkid is going to want to go to Shanghai Disney,” said Shaun Rein, managing director of China Market Research in Shanghai.

Despite a sharp slowdown in growth, China’s economy still is one of the world’s best-performing and tourism spending is rising.

Total visitor numbers to Chinese theme parks are forecast to more than double to 282 million in 2019 from 2014’s 133 million, according to Euromonitor International, a research company.

“Even with the weak economy, Chinese are not cutting back on tourism,” said Rein. “They are still spending on experiences and on their kids.”

Shanghai represents a market of 300 million people living within three hours of the park by car or train in one of China’s most affluent regions. China’s bullet train network can draw in areas further afield.

The park should generate some $1.5 billion to $4.5 billion a year in revenue, according to Drexel Hamilton analyst Tony Wible.

However, Disney’s state-owned Chinese partner, the Shanghai Shendi (Group) Co. Ltd., which owns 57 percent of the 2.9-square-mile park, will get the lion’s share.

Disney’s international parks, which include local partnerships in Paris, Hong Kong and Tokyo, haven’t made a profit in six of the past 10 years, Wible figures. So the main advantage of the huge park may be promotion of the brand and merchandise.

China’s tourism market is filled with inexperienced but ambitious competitors for Disney, from theme parks to golf resorts to cultural parks.

The country’s biggest real estate developer, Wanda Group, opened a $3 billion entertainment complex in the southern city of Nanchang in May that it said is the first in a planned series. Wanda’s founder, Wang Jianlin, Asia’s second-richest businessman, said he wants to “overtake Disney” as the biggest global tourism company by 2020.

Wanda Group bought Hollywood studio Legendary Entertainment in January, part of a string of acquisitions meant to transform Wang’s shopping malls-and-hotels conglomerate into an entertainment powerhouse.

China is a challenging environment in other ways, too: Disney also faces official controls on business activities and taking profits out of the country. Live entertainment such as its “Lion King” stage show requires approval by Chinese censors.

Disney’s DisneyLife direct-to-consumer online movie and book offering was closed in April, five months after opening, amidst a Chinese regulatory review.

“The challenge is: How do you extract value out of that environment?” said Wible. “The Chinese results are good for the box office, but you only get 25 cents on every dollar. Similar to the parks, you don’t really get to take much out of the country.”

For now, Rein said, Shanghai Disneyland “is far above anything else in China.”

YouGov, a market research firm, said 44 percent of people it surveyed in China in May said they plan to visit Shanghai Disneyland within the next 12 months. It said 80 percent plan to take family members.

“Disney is good. I had a lot of fun during the trial. It is exciting. The architecture, the castle and other buildings are very special,” said Wang Lei, who works for a food chain in Shanghai. “I’m sure I will go again, maybe again and again. I’ll bring my kids and relatives from my hometown,” she said.

But Disney faces the danger that it might be so crowded potential visitors would be put off.

Wang felt the park was too small.

“People are waiting in line for long hours to have fun, which is not fun,” Wang said.