Walt Disney Co said its new $5.5bn Shanghai theme park attracted 4mn visitors in its first four months and will be close to breaking even in its first full year of operation in 2017.
About 50% of the park’s guests are from outside the Shanghai area, a “big surprise” as the Chinese city had been expected to account for more than three-quarters of visitors initially, Disney chief executive officer Bob Iger said in an interview with Bloomberg TV on Thursday. “The fact that it’s so balanced leads us to believe that word of mouth on this and the intent to visit from well beyond Shanghai is very, very high,” he said.
The Shanghai theme park, Disney’s first in mainland China and largest foreign investment, opened in June as the company races to capture the country’s growing middle class and dominate its $180bn media and entertainment industry. The company has also started producing movies in Asia’s largest economy.
In an earlier conference call with analysts after Disney reported fiscal fourth quarter results, Iger said some of them may infer from the first four months’ attendance the Shanghai park could get 10mn visitors in its first year, a number the company “would be thrilled with.” However, Disney won’t provide any guidance for the resort at this point, he said.
China Securities International tourism analyst Jennifer So had expected the park will get 15mn visitors in its first twelve months of operations, while Macquarie Capital analyst Tim Nollen estimated the park will get 15.7mn annual visitors by fiscal 2019.
“The entire theme park industry is not doing as well as we expected,” said Jennifer So, a tourism analyst at China Securities International, by telephone. “It’s a very different market for Disney in China - it’s a different culture, and their characters are not as well-known or popular here, and the ticket prices are high.” Asia’s most popular theme park in 2015 was Tokyo Disneyland with 16.6mn visitors, followed by Universal Studios Japan with 13.9mn, according to Aecom’s 2015 Global Attractions Attendance Report. Within China, the most popular was the Chimelong Ocean Kingdom in Hengqin, part of southern Zhuhai city, which attracted 7.5mn visitors in 2015, according to the report.
“Over time, Shanghai Disney will continue to expand – sometimes there’s a slump in year two after the excitement fades,” said Chris Yoshii, Aecom’s vice president for economics in the Asia-Pacific region. “However, over time they generally grow attendance.”
Guests are staying longer than Disney expected, according to Iger, who visited Shanghai last week and said he was surprised by the number of young kids at the park on a weekday.
Disney this week announced it broke ground on an expansion at the park, a Toy Story-themed land with three attractions and a character meet-and-greet area.