Under the background that most of the domestic theme parks are losing money, the opening of Universal Studios undoubtedly gave the theme park a boost, and it has also become another feast for the Chinese cultural tourism market after the opening of Shanghai Disney five years ago.
In 1955, film animator Walt Disney seized the opportunity to create the world‘s first theme park with a modern concept—Disneyland in Los Angeles, USA.
Relying on IP to develop amusement facilities and attractions, the Disney theme park has spread all the way to the world.
Perhaps seeing the success of American-style theme parks worldwide, domestic theme parks are also eager to try.
In the late 1980s, after the completion of the “Splendid China” miniature scenic spot in Shenzhen Overseas Chinese Town, the concept of “theme park” officially landed in China, which subsequently triggered the continuous expansion and development of local theme parks. A number of theme parks such as Beijing World Park, Songcheng and Suzhou Amusement Park have been built one after another.
As the first batch of crabs, these projects have obvious shortcomings in terms of the product connotation of theme parks, operation and management, and return on investment. Many projects are almost completely blindly following the trend.
Yuan Qun, dean of Beijing Jiangshan Duojiao Planning Institute, once pointed out in “The Crux of Failure and Operation Mode of Chinese Theme Parks” that by the mid-1990s, more than 1,000 theme parks appeared across the country, but due to various reasons, 90 of them % Have become unfinished projects, and some failed soon after opening.
In 1998, the completion of Happy Valley in Shenzhen marked that the development of local theme parks entered a period of brand development.
Beijing Happy Valley, tourists are experiencing extreme speed.Beijing News reporter Wang Fei
At the same time, domestic theme parks have begun to follow Disney and Universal Studios in terms of related manufacturing equipment and animation industry.
With the effective cultivation of the market, relevant investors are optimistic about the prospects of theme parks. Many local brand parks such as Chimelong Paradise, Dalian Discovery Kingdom, and Fantawild Paradise have emerged in China. Companies headed by OCT have also begun to develop theme park brands and chains.
According to estimates by the tourism business consulting agency New Travel World, the total investment of 35 domestic theme parks that are about to open or have opened in 2019 exceeds 450 billion yuan.
After entering the 21st century, with the rapid rise of China’s economy, international companies attach great importance to the huge cake of the Chinese market.
It is precisely because of China’s huge cultural tourism market that international theme park giants are also targeting the Chinese market. While Disney and Universal Studios have entered China successively, well-known theme parks such as Lotte World in South Korea and Hello Kitty in Japan are also looking for suitable opportunities to deploy in China.
Gold sucking logic
As a theme park on par with Disney, Universal Studios also has popular IP such as “Harry Potter”, “Minions”, “Transformers”, and “Jurassic World“.
There is no doubt that the entire industry chain of film and television IP is still the main source of money for theme parks.
August 2021, Beijing Universal Studios Resort. Night view of the Wizarding World of Harry Potter.Beijing News reporter Guo Yanbing photo
Take Disney as an example. In Disney’s Q4 2017 financial report meeting, Disney’s CFO stated that Shanghai Disney Resort was profitable in its first full operating fiscal year.
However, Disney’s road to sea has not been smooth sailing before.
Disney Paris has been unable to make a profit for many years due to cultural barriers and shareholding structure. Hong Kong Disneyland in China suffered a loss of HK$171 million in 2016, and it was even more difficult during the epidemic.
Shanghai Disneyland officially opened in 2016. The key to making profits so early is to learn from the experience and lessons of the park’s previous overseas trips.
It is a prosperous area with a high concentration of sites, with a large number of people, wealth and convenient transportation.
Located in Shanghai, Shanghai Disney Resort can radiate the Yangtze River Delta with a population of about 300 million. It is also the region with the most active economy and the highest GDP per capita in China.
When Shanghai Disneyland opened in 2016, Shanghai’s per capita GDP was US$17,100, ranking third in China’s provinces, while Jiangsu and Zhejiang, both of the Yangtze River Delta, were ranked behind Shanghai.
Like Shanghai, several other Disney locations have the highest per capita GDP when selecting locations.
When Tokyo Disneyland was built in 1982, Tokyo’s per capita GDP was approximately US$9,700, which was four times the world’s per capita GDP at that time.
When Disney selected a location in Paris in 1992, France’s per capita GDP exceeded $23,900, which was more than 5 times the world‘s per capita GDP at that time.
When Hong Kong Disneyland opened in 2005, Hong Kong’s per capita GDP was approximately US$26,600 that year, which was about 3.7 times the world’s per capita GDP that year.
Like Disney, Beijing, where Universal Studios is located, also has a strong spending power. In 2020, Beijing’s per capita GDP will reach approximately US$24,000, and Beijing’s permanent population will reach 21.893 million. Not only that, the Beijing-Tianjin-Hebei region is also the core area of my country’s northern economy.
Dollar. Picture/unsplash
Another major feature of the location of Disney and Universal Studios is that they have extremely convenient transportation environments, either close to the airport or extremely well-developed road traffic.
While paying attention to its own IP, it actively integrates local cultural elements.
Take Disney as an example. The reason why Disneyland Paris is deeply under pressure on profitability is largely due to the cultural insufficiency it encountered in Paris.
The main manifestation is that the superiority of European traditional culture has a greater rejection of American culture, and Disney is a representative of American culture. This has led to the obstruction of the park from the establishment to the opening of the park by some local residents.
However, Shanghai Disney pays more attention to Chinese elements when laying out projects. Many of Shanghai Disney’s images, such as the “sacred beast” Quilla drifting on Thunder Mountain, and the Zodiac Paradise, are all designed for Chinese consumers.
Not only that, the iconic attraction of Shanghai Disneyland, the “Fantasy Fairy Tale Castle”, is also rich in unique Chinese elements. At the highest point of the castle, a peony decorated spire was erected.
Similarly, Universal Studios has also put a lot of effort in embodying Chinese elements.
Among the 7 major scenic spots set up in Universal Beijing Resort, the “Kung Fu Panda World“, which is full of Chinese local culture, is a unique project of Universal Studios in China.
Chinese elements are not only reflected everywhere in the park, even in the Transformers story there is a “Beijing Lair Force”.
It can be seen that Universal Studios Beijing has also made great efforts in how to tell cross-cultural stories well.
Where is the local paradise going
The opening of Universal Studios Beijing once again ignited tourists’ enthusiasm for theme parks. However, not all theme parks or amusement projects that focus on cultural IP have the lasting power of attracting fans like Disneyland or Universal Studios.
According to the report of the Prospective Industry Research Institute, 70% of domestic theme parks are at a loss, 20% are flat, and only 10% are profitable. The overall profitability of theme parks in my country is difficult.
Once used as the world‘s only indoor movie theme park, Wuhan Wanda Movie Park, after 19 months of operation, due to the scarcity of tourists, it has suspended operations and later changed to a skiing project.
Coincidentally, the first firefly theme park in Changsha opened in Orange Island Beach Park. It only opened for a few days. Under the intervention of the Changsha Wildlife Conservation Association, the project was stopped by the organizer.
However, in the eyes of investors, the theme park industry still has great potential for development. In recent years, real estate companies seeking diversified development such as Wanda, Sunac, and Shimao have also entered.
Why are a large number of local theme parks facing profit problems?
Although IP is important, the test behind the theme park is even more operational skills.
March 2020, Shanghai Disney Resort. Picture/unsplash
Compared with overseas theme parks such as Disney and Universal Studios, local theme parks not only lack basic content such as IP image, but also have a big gap in operation. The most prominent performance is blind imitation, and the phenomenon of homogeneity is prominent.
In terms of operation, taking Shanghai Disneyland as an example, operation is the largest administrative branch, which is divided into park operations, town operations, hotel operations, catering operations, commodity operations, and security operations.
Many local paradise uses “copy homework” everywhere, patching things together, taking shortcuts to make quick money, and in the end many of them become uninterested.
And tickets have become the main source of income, and there is a lack of corresponding derivatives.
The popularity of Disney and Universal Studios in addition to the IP scene, also includes theme parks and resorts, media networks, consumer goods and interactive entertainment.
It is reported that the income of Disney theme parks mainly comes from five parts, namely ticket income, food and beverage and commemorative merchandise sales income, hotel overnight income, cruise travel income, and club rental and sales income. Ticket revenue from amusement parks only accounts for about 20% of the total revenue, and the larger revenue comes from the sales of derivatives of the pan-industry chain, hotel operations and other businesses.
Most domestic theme parks do not know this. Although the scale is already huge, the business model is still based on theme park operations, with insufficient IP operation capabilities and a single income structure. Generally, only a single ticket revenue method is adopted.
More importantly, many domestic theme parks are eager to bundle development with real estate when their cultural core competitiveness is insufficient. The projects involve multiple formats such as hotels, commerce, and residences.
Some developers have deliberately turned the development land into a “residential + theme park” model to maximize the attention of home buyers. However, reality has proved that the effect of this operation is not ideal.
With the entry of theme parks such as Disney and Universal Studios, the competition in domestic theme parks is bound to become more intense.
However, as the waves are scouring the sand, whoever can learn and grow in the competition in the future, who can standardize operations, will be able to win in the competition.
Researcher of Xinjing Think Tank | Zha Zhiyuan
Edit | Zhang Xiaoyuan
Proofreading | Wu Xingfa
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