The long-anticipated Shanghai Disneyland due to open in 2016 will struggle to turn a profit in its first five years, tourism experts warned Thursday.
Their skepticism greeted the confident Shanghai tour of Tom Staggs, chairman of Walt Disney Park and Resort, who expressed his faith in the multi-billion yuan project to ride out the recent global economic gloom.
“Walt Disney Co and the Shanghai Shendi Group will cooperate in both construction and operation of the theme park,” he told reporters on Wednesday. “Both the Chinese and US sides will invest in the project and such a joint-venture model is the first in Disney theme park history.”
Walt Disney will mostly operate the 3.9-square-kilometer theme park, Staggs said, but “the Chinese elements” will be a vital part of the management style in Shanghai.
Disney is a minority shareholder, holding 43 percent, while the government-run Shanghai Shendi Group holds 57 percent, according to a Disney statement.
Shanghai Disneyland is unlikely to turn a profit in the first five years, Xia Lin, professor of Fudan University’s tourism faculty, told the Global Times Thursday. “Even if Shanghai Disneyland charges 300 yuan ($47) a ticket, it will take at least 10 years for Disney to cover the initial investment,” Xia said.
When Disney broke ground in April, the company estimated the project would cost 24.5 billion yuan ($3.75 billion). Support projects around the park could take that bill past 100 billion yuan, according to the China News Service.
Hong Kong Disneyland had had a bumpy start since 2005 when it opened, Xia explained. Annual net losses at Hong Kong Disneyland stood at HK$720 million ($92 million), according to a Disney financial report released in January, although annual attendance had increased 13 percent to 5.2 million visitors last year.
Two concept photos were also released during Staggs’ visit to Shanghai. They revealed the centerpiece of Shanghai Disneyland: the Enchanted Storybook Castle will be the biggest of all six “Magic Kingdoms” in the world.
Castle visitors will be able to take a ferry-boat ride to tour scenic spots at the park. It will also feature Disney princesses.
Shanghai Disneyland will bring extra revenue to the city, believed Dai Haibo, deputy director of Pudong New Area where the theme park will be located.
“Shanghai’s tourism and service industries will benefit from the Disney project,” he told the Global Times Thursday.
“Disneyland will strengthen Shanghai in the center of the Yangtze River city clusters.”
The Disney theme park will be at the heart of the Shanghai International Tourism Zone, according to the blueprint released by Pudong New Area Planning and Land Authority.
Metro Lines 2 and 11 will link the city’s downtown to the theme park, Dai said, quickening the development of suburban Chuansha and Sunqiao areas in Pudong.