China's amusement park market, including theme parks and water parks, has been expanding at an 11% rate in revenue over the past five years. The sector is expected to see $3.3 billion revenue in 2015 and $4.8 billion in 2020. With late starters such as Disney and China's real estate juggernaut Wanda vying for a space, the market leader Overseas Chinese Town - which once made it into Forbes Asia's "Best Under A Billion" list - sure is facing challenge.
Shenzhen-headquartered OCT claims a 10.6% share in the marketplace; none of its followers has more than 2%. The company opened China's first theme park in 1989 featuring miniature replicas of China's landmarks, and has become the world's fourth largest theme park group with a 28 million visitor count in 2014, a fifth of top operator Disney's attendance.
Today 850 parks has opened across China and Disney is adding to that number - it schedules to open a Shanghai park in 2016, its second China location after Hong Kong, in conjunction with investment firm Shanghai Shendi Group with $5.5 billion earmarked. Wanda debuted with a movie-themed park in Wuhan last year, and plans to pump $32 billion into a dozen more.
“There are certainly an unprecedented number of new parks being planned and built in China.” says Chris Yoshii, vice president of economics at U.S. consulting firm AECOM in its Hong Kong office, “We believe the opening of Shanghai Disney will elevate the definition and expectation of a theme park in China. [Other parks] need to up their game and find their niche in the market to be successful.
Smaller-scale companies such as Hangzhou-based Songcheng have also been rising rapidly. Last year Songcheng's parks had a 104% jump in attendance to 14.6 million, outperforming billionaire Liang Guangwei's Fantawild, the world's ninth largest operator a year earlier. Songcheng's Song Dynasty-themed flagship park in Hangzhou attracted 5.8 million visits in 2014, making it the most popular one in mainland China.
Domestic capital currently dominates the sector, accounting for 70%, but increasing overseas operators are tapping the momentum in joint forces with local partners. Besides Disney, U.S.'s Universal Studios and Beijing Tourism Group is pouring $3.3 billion into a new park in Beijing; and Australia's Village Roadshow is raising $500 million with financial conglomerate CITIC for a theme park in Chengdu.
“We need to remember China has about 200 cities with over 1 million population. These populations are very rapidly moving into the middle class, so there is a big demand for more entertainment in China. National and local policy has also shifted to support theme parks,” adds Yoshii with AECOM. China Association of Amusement Parks and Attractions declined to comment on such matters.
