About a year ago, tycoon Wang Jianlin, previously China’s richest man, came out with a bold prediction that Shanghai Disneyland would be a flop – unprofitable for two decades – and that his group Dalian Wanda would outbuild the Magic Kingdom in China.
But it appears to be Wang who has been hit by a curse.
Look at what has happened: Last month Wanda sold 13 cultural and tourism projects totaling nearly 59 million square meters to rival Sunac for 43.8 billion yuan, while retaining only a 9% stake in a major retreat.
Meanwhile, Walt Disney reported a first-year profit in China, and possibly more in the coming year.
Shanghai Disneyland has had more than 13 million visitors since it opened in June 2016. That is about half the population of the world’s biggest city.
In a third-quarter earning call, Walt Disney chief executive Robert Iger made no secret that “obviously when you have attendance at the level that we have, that, obviously, is a reason why the profitability is higher.”
Shanghai Disneyland was basically a national tourist destination, he said, and a very, very well-received product in China. The overall effect of great guest satisfaction and substantially greater visitors – two-thirds of them from outside Shanghai – in its first 14 months meant it had been “more profitable than we anticipated”.
The US$5.5-billion Shanghai Disneyland turned profitable after just one year, as if by magic. Hong Kong Disneyland, by comparison, only turned profit in 2012, its seventh year of operation.
Walt Disney owns a minority 43% stake in Shanghai Disneyland, while state-controlled Shendi Group has 57%. The US giant owns 47% of Hong Kong Disneyland while the Hong Kong government has 53%.
Despite its minority stake, Walt Disney also got a cut in royalties for its merchandise items like Mickey Mouse and Donald Duck. It was the same for its food and beverage and hotel businesses.
With easy and quick success, it is only natural that Walt Disney may think about having a second bite at the cherry. In fact, the quick investment return in China should help Walt Disney secure a new partner for a second theme park, possibly in a second-tier city.
Meanwhile, what seems more certain is Shanghai Disneyland will open a Toy Story Land next year, building on its successful track record in a themed park market of its own.