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Themed success

2014-11-17 15:42:20Source:China DailyAuthor:

Global players add more fizz to theme parks with new offerings

At the age of four, Xiong Zimi has traveled to the Universal Studio in Japan and the Disney resort in Los Angeles in the United States. The globetrotting traveller has many favorite characters and programs gleaned from her visits to various theme parks. Her home in Beijing is filled with toys, costumes and other souvenirs collected during the trips.

Like Xiong, many Chinese children and their families are passionately embracing theme parks, their story telling techniques and exciting rides and programs. And that in turn, is propelling an increasing number of investments in building theme parks and fueling existing theme park operations in China with growing footfalls and ticket revenues.

Last year was a particularly strong year for theme parks and water parks across Asia, with most of the top sites seeing a surge of over 7.5 percent in combined attendance, said Chris Yoshii, vice-president at AECOM (Hong Kong), a US-based consultancy group.

According to Yoshii, a significant outcome of the trend is that the large theme parks are not only becoming bigger in size, but investing and expanding further with new themes, anniversary celebrations and a host of other attractions.

Fantawild Holding Inc, the Shenzhen-based culture and technology company that owns theme parks including Fantawild Adventure, is now among the top global operators in terms of great attendance growth, together with OCT Group-the owner of many brands including Happy Valley Chain.

Guangzhou-based Chimelong Group, which opened their new destination theme park and resort Ocean Kingdom in Zhuhai recently, is another Chinese company that enjoys booming business.

Evidence that the theme park industry is on strong ground in China can also be seen from the 6 percent growth rate in visitor numbers, with Chimelong alone reporting an increase of 7.5 percent, according to AECOM.

The industry got a shot-in-the-arm after some scenes of Chinese blockbuster movie Dad, Where are We Going? were shot at the Chimelong facility, further enhancing its reputation with Chinese visitors.

In terms of reinventing guest experiences, Chimelong's outdoor heated water system was extended to cover the entire park. The newly opened Zhuhai Chimelong Ocean Kingdom Resort also added to its growing stature in the industry.

Though Chinese companies are pressing ahead with new attractions and projects, all eyes are of course on Shanghai, as the much-anticipated Shanghai Disneyland is expected to open its doors late next year.

The project, which has stirred up much hype and anticipation, is expected to become one of the top five theme parks in Asia and put China firmly on the map for the first time, according to AECOM.

Yoshii said that there are growing expectations that other players will also up the ante in terms of quality and services.

The huge outlay for the Shanghai Disneyland also seems to be prompting such changes. The Walt Disney Co and the Shanghai Shendi Group, the two owners, are expected to spend another $800 million on further attractions at the park in future.

The additional spending raises total investment on the project to about $5.44 billion.

Shanghai Shendi is a conglomerate of State-owned enterprises established by the municipal government to develop the park. Shendi has a 57 percent stake in the project, with Walt Disney holding the remainder.

The park will feature some of the most advanced rides and attractions in the industry, Yoshii said.

The theme park industry in Asia is expected to see organic growth, much in line with the region's economic growth, in the long term as more people achieve middle-class status, said a recent study conducted by AECOM.

The other top five theme parks in 2013 with the greatest attendance growth were Tokyo Disneyland at 15.9 percent, Tokyo Disney Sea at 11.3 percent, Hong Kong Disneyland at 10.4 percent, Lotte World at 15.9 percent and Seoulland at 8 percent.

There will be tough competitions among the business groups that run the theme parks, which in return will force them to continue beefing up investment and financing, said Qi Qing, senior economic adviser, Beijing Jia***Tech Co Ltd.

Yoshii expects the industry to record strong performance in China in 2014, despite the slower growth last year, thanks to new expansion and additional investment.

That optimism seems to be shared by most of other theme park operators and owners.

"We don't see any reason for negative news. We are anticipating positive growth this year also," said Yoshii.

He said that the Shanghai resort, however, will not have much impact on the company's full year results in 2015 as it would be open for just one or two months. The real impact will be seen from 2016 onwards.

"There is lot of anticipation about the Shanghai Disney project, its opening and success. But it is also important to consider the operational challenges associated with such a huge project," said Yoshii, adding that it will require lots of training and planning as well as concerted efforts on crowd control.

The good thing is that the Disney team has already learned lessons from its experiences in Hong Kong on how to accommodate the mainland market including language and culture issues and how to adjust their services and programs for better results, Yoshii said.

Every year Walt Disney Parks and Resorts receive more than 120 million visitors across its five sites around the world, including millions of Chinese mainland tourists who visit Hong Kong Disneyland and other resorts.

Yoshii said several other international theme park brands are also trying to enter the Chinese market.

The US-based Universal Studio is one of the brands. It is planning a Universal Studio in Beijing, which will need to be more accommodating during the long winter and able to handle the very hot weather in the summer.

For example, it might need more indoor areas for people during such conditions.

Chen Hongquan, manager of Lotte World who is responsible for the China theme park unit, said the Lotte World in Shenyang, capital of Liaoning province, is expected to open in 2016, a complex that will include the theme park, hotels and shopping centers.

Another Lotte park for children is coming up in Chengdu, capital of Sichuan province. Both parks are designed for family trips, with facilities and amusement products tailored for family members of all ages with local Chinese themes.

"The main feature of Lotte World is that it offers one-stop entertainment for all visitors," said Chen. Due to the long winter in Shenyang, much of the complex will be indoors, he said.

The growing number of theme park brands coming up in China has led to intense competition for footfalls and often pain for local operators.

Yoshii, however, said that the situation is not so bad and there are several opportunities for theme parks that can offer different experiences and themes. Local operators can add more spice to the market by providing niche services and lower prices, he added.

He cites the example of Ocean Park in Hong Kong, which has been threatened by the Hong Kong Disney resort in recent years.

"Ocean Park's aggressive investment in expanding and upgrading services along with more competitive ticket prices has helped increase footfalls."

A positive outcome of the competition would be the raising of the bar for quality and services at the theme parks, Yoshii said.

Wei Xiaoan, a researcher of Tourism Research Center, Chinese Academy of Social Sciences, said: "At present, domestic theme parks are mainly located in the Yangtze River Delta, the Pearl River Delta and Beijing, of which 300 have an initial investment of 50 million yuan ($8.2 million) each. But only 10 percent of them are making profits."

Yoshii says the opening of the Shanghai Disney Resort and the Universal Studio in Beijing would put pressure on OCT Group, which has facilities in both cities.

"OCT will have to pay more attention to the competition and on quality of services, as people will have lots of expectations after visiting Shanghai Disney and Beijing Universal Studio," he says.

Speaking on the potential pitfalls for local theme park projects, Yoshii says those with bad quality, low investment and less interesting and engaging stories would inevitably bite the dust.

"Local projects with lower-than-expected services and programs will find it difficult to get repeat customers."