Walt Disney Co.'s $3.75 billion Shanghai Theme Park

[Melanie]

There goes my goal to visit all the Disney parks worldwide.

[Gator]

Why put one in China? There's one in Hong Kong and China already "owns" that country.

[Figment!]

Why put one in China? There's one in Hong Kong and China already "owns" that country.

It is perceived as inconvenient (or otherwise undesirable) for the large, wealthy mainland China population centers to travel to the Hong Kong park.

Since opening, only 40% of Hong Kong Disneyland Guests were estimated to be from mainland China.

The expectation is that building a new park closer to a wealthy population source will attract new mainland China Guests and increase the frequency of the mainland China Guests who were already visiting the Hong Kong park.

Pundits have brought-up the question of market saturation, but Disney and the Chinese government have both insisted that the addition of the second Chinese resort will lead to an overall increase in Disney park attendance. How? This hasn't been made exactly clear, but it is postulated that the those with the means to visit both resorts will be compelled by product differentiation to do so and those who would have otherwise visited no park will now be compelled to visit the much closer Shanghai park.

[BrerGnat]

There goes my goal to visit all the Disney parks worldwide.

Just out of curiosity, why?

[Ms. Mode]

If they have a large wealthy population of people who don't want to visit Hong Kong; they could always take a road trip and visit WDW in Florida.

[Melanie]

Just out of curiosity, why?

Because I don't ever see myself traveling to Asia again. Maybe, but it's a long shot.

[BrerGnat]

Because I don't ever see myself traveling to Asia again. Maybe, but it's a long shot.

Oh, okay. So, have you been to the Hong Kong park then?

[Melanie]

Yep, we went for Christmas '08.

[Scar]

April 3, 2011 - The Wall Street Journal


Walt Disney Co. on Friday will break ground on a new theme park and resort in Shanghai, according to people familiar with the matter, after years of red tape and negotiations with the Chinese government.

The groundbreaking ceremony follows Disney's recent receipt of final approval from the Chinese central government to move ahead with its long-gestating plans for the 963-acre park and resort. That is about 1/26th the size of the 40-square-mile Walt Disney World in Orlando, Fla.

Early Saturday morning, or late Friday in the U.S., invitations were issued by Disney, together with an arm of the Shanghai government and a local business partner of Disney's, inviting recipients to "a special event in Shanghai" on April 8. Disney Chief Executive Officer Robert Iger is expected to attend the groundbreaking ceremony. Shanghai Disneyland will be the Burbank, Calif.-based Disney's sixth major theme park in the world, and its first in mainland China.

Shanghai's mayor has estimated the cost of the first phase of the theme park will be 24.4 billion yuan, or $3.73 billion. The total cost of the resort isn't clear, but it is likely to be one of the largest foreign investments ever made in mainland China. The resort will be majority-owned by media and entertainment companies that are in turn owned by the Shanghai Municipal Government. Disney's stake in the endeavor hasn't been disclosed, though the company is expected to hold a minority interest.

In addition to Disney, the parties issuing the invitation were the Administrative Commission of Shanghai International Tourism and Resorts Zone and Shanghai Shendi Group Co. Ltd. The latter is Disney's government-owned joint venture partner, a company formed by various government-owned businesses that has investors including a subsidiary of broadcaster Shanghai Media Group and another responsible for construction.

[Victor Kelly]

Just be aware comrade Mickey is watching you. I won't tell you what will happen if you do something wrong.