A tale of three Disney cities in Asia
- By Dan Steinbock
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E-mail China Daily, April 7, 2016
With debt taking and low rates, Abenomics has been good to Tokyo Disneyland. Visitors have been sustained by efforts to prop up consumption domestically and the yen’s depreciation internationally. But as currency wars are reducing depreciation benefits, Prime Minister Abe is pushing for a consumption tax hike next year.
At the Shanghai Disney Resort, all eyes are on mainland visitors. In the early 2010s, two Chinese theme park chains, OCT Group and Haichang Group, entered the top 10 list of operators. That’s when Disney and Shanghai Shendi, a State-owned company with a 57 percent stake in the resort, began to build the Disney Resort in Pudong.
To Disney, Shanghai will be its first major park in a large emerging economy. Today, theme parks and resorts are its most critical segment, accounting for some 30 percent of its valuation, of which international parks and resorts account for only about 5 percent.
With the opening of the Shanghai Disney Resort in June, Disney’s international theme park revenues could double from $2 billion in 2016 to some $4 billion by the early 2020s. However, in Shanghai, Disneyland’s value will be determined by jobs, capital and spillover effects. The success can be measured in fiscal 2017, when the first full-year results will become available. Yet initial responses are encouraging.
Initially, some 10 to 20 million people are expected to visit the Shanghai Disney Resort annually. In sheer size, twice as big as its counterpart in Tokyo and three times bigger than Hong Kong Disneyland, respectively; it will require new infrastructure and logistics. It will be vital for local travel agencies that thrive on short tours. It may boost the number of foreign visitors in Shanghai. In the property markets, it is generating a lot of interest among other developers and investors.
Today, the Shanghai Disney Resort is the most important influence in Asian theme park development, even globally. It is expected to have a major impact on raising the bar for quality, guest experience and setting a price premium in the market.
The author is a columnist with China.org.cn. For more information please visit: http://www.china.org.cn/opinion/DanSteinbock.htm
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