Is Shanghai Disneyland still succeeding, six months after its opening?
How is Shanghai Disneyland doing, as we come to the end of its opening year? Nikkei Asian Review, a business journal based in Japan, took a look and, from a business perspective, the news is mixed
Four million people visited Shanghai Disneyland in its first four months, and the journal reports that the park remains on track to draw the 10 million visitors it had hoped to attract in its first year. But crowd levels are decreasing, and many attractions that once required hours-long waits now are walk-ons. Granted, part of that decline in wait times can be explained by better attraction uptime and capacity as the park and its operators gain experience, but declining daily attendance also plays a part.
More troubling for the park at the moment, however, is per-guest spending. The journal offers anecdotal reports that Chinese visitors aren't spending much on food or souvenirs in the park due to relatively high prices. From a western perspective, prices at Shanghai Disneyland are cheap — a one-day ticket costs $53.50 on weekdays, compared to a minimum of $95 for one day at Disneyland in California or $97 at certain Walt Disney World parks. But with the median income in Shanghai under $870 a month, according to the journal, even Shanghai Disneyland's prices are a tough sell.
(As a resident of the Los Angeles area, allow me to pause a moment to note the irony of a seemingly endless supply of Chinese investors willing to spend a million bucks on 1,200-foot townhomes from San Diego to Vancouver, while others can't come up with $10 for a meal at Shanghai Disneyland. Perhaps everyone in China with enough money to splurge at Disneyland has left for North America already?)
In the long term, Disney will figure out the right mix of price points to extract the most money possible from the Shanghai market. The park has started offering seasonal passes and Disney frequently changes menus and souvenir line-ups at its other parks to match consumer demand. Shanghai Disneyland will be no exception.
But given lower incomes among local visitors, one way for Disney to boost guest spending in Shanghai would be for the park to attract more foreign tourists. With admission and food prices lower than any other Disney theme park, Shanghai Disneyland could be an attractive destination for Disney and theme park fans throughout the Pacific Rim, especially with the park's unique mix of attractions, including the Theme Park Insider Award-winning Pirates of the Caribbean Battle for the Sunken Treasure and the TRON Lightcycle Power Run roller coaster.
For that to happen, though, international visitors would need to find it easier to visit China. The country already offers visa-free travel for short transit visits through Shanghai. But that requires traveling onward to a third nation after visiting the city, rather than returning directly to your home country. The Chinese government owns the majority share of the Shanghai Disneyland, so it has an interest in the park making more money. Perhaps that might entice China to expand the Shanghai visa exemption, allowing direct returns for international travelers who book a trip to Shanghai Disneyland?
Short of that, perhaps the park could start an international marketing campaign, in which travelers who book through the Shanghai Disneyland website would be guided through the process of obtaining any necessary visas.
One way or another — through price adjustments, marketing, or easier accommodations for international visitors — Disney has options to boost guest spending in the park. And among the many things Disney excels at, high on that list is exercising its options to make money.
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Disneyland Paris is the most visited EU theme park. For some part due to the fact it's open all year, most other EU parks close in the winter, but it is very popular. Still it is loosing money due to several reasons that are probably the same as for other non US parks.
>>> Most EU parks I know don't have a souvenir shop at the end of the ride so they are not used to shell out and buy a momentum of the ride.
I was just at Shanghai Disneyland last month as part a boarder trip to China. I have to say it was less impressive than I imagined it would be.
As a US citizen who frequents DLR CA since childhood, WDW also since childhood (growing up in the midwest made that the closer park), our visit two Christmases ago to DLRP was both positive and surprisingly negative.
Even the rich will look for bargains. If the Chinese travel in one way in China, they won't make Disney the exception. When they are outside China, these expectations are discarded and they will spend accordingly. Disney culture must be carefully nurtured as it was in the USA. It took many years. The lack of high standards is a shame in Shanghai Disneyland. Perhaps Disney should consider catering to the upper class and upper middle class, not the median to lower class. The uncrowded parks should be considered an advantage, but not really for that has worse negative implications. This is a long term play. China is in it's own industrial age.
Well, history has shown that Disney doesn't do very well at opening the parks, but do well in the long run. DLP, DCA, and AK were pretty lukewarm when they opened. Disney corrected some wrongs and they thrived.
Just visited Shanghai Disneyland in November as well, and I found the food to be not great, and not cheap. Was a shame actually. I was hoping a brand new park would have really knockout food, since they've been slowly improving the food in their US parks at least (for the most part). I wished I brought in a lunch of some tasty street noodles or soup dumplings. Mmmm soup dumplings.
Another funny or irritating that happened at SDL was on the Voyage Crystal boat ride thing where two young couples got on, the men sat in the front and the women behind us. Why they didn't sit together I don't know? One of the guys talked (and laughed) loudly almost nonstop. When he wasn't enjoying listening to the sound of his own voice he was texting, taking pictures or face-timing the women behind us. Periodically one of the young ladies would yell to the guys in front in an incredibly loud and shrill voice and since she was leaning over it was practically in our ears. It was so magical.
My Asian friends in the U.S. are typically very price conscious, so I imagine it would be even more so in China. It's hard to compete with the local street food or restaurants just outside the gate, hopefully Disney knew this would be an issue, and will be willing to adjust their pricing structure.
This is the problem that SDL faces, the upper class/upper middle class that can afford to eat and shop in SDL are also the ones that can afford to visit TDR, DLP, DLR and WDW.
I'd consider Shanghai Disneyland to be succeeding, but I do think they'll need to adjust their model a bit to guarantee success long-term. While the park's attractions certainly seem popular (I just read a trip report from someone who visited and experienced 2.5 hour waits for all the E-tickets), I don't think the traditional Disney model is likely to work with a primary Chinese audience. From what I understand, most Chinese treat amusement parks more like city parks, where they'll go to hang out for a few hours, do some rides, and then leave without buying anything. It may be good for Disney to take a close look at the Chinese theme park chains (OCT Group, Chimelong Group, and Fantawild) and borrow some of the operational and pricing models from these parks. Additionally, Shanghai Disneyland needs to be marketed to a wider audience. While it probably won't get much business from North America, I could see it doing decently among tourists in the rest of the world (especially Asia), as it offers unique attractions compared to other international Disney resorts and is the least expensive of them.
Inspired by Robert's thought about visas... I wonder if there'd be any mileage in Disney offering some sort of 'Asian Adventure' package for international visitors. Get a discounted rate for on-site stays if you book a Shanghai/HK combo trip.
I think Adventures by Disney is trying to set it up. I saw a brochure in the DVC lounge at EPCOT and remember something similar to what you are describing.
An offering from Disney that would be "super expensive"!? Naaaaaaaah! :D
When has Disney ever managed a successful foreign park? The answer is NEVER. The Tokyo resorts are owned and operated by a Japanese company. Disneyland Hong Kong has failed to pay for itself after 15 years. Disneyland Paris has failed to pay for itself after 25 years. And Shanghai Disney will also fail to pay for itself.
Disney will still profit from royalties from their overseas parks. Paris is one example where Disney bought a larger stake in cooperation with big pocketed investors and screwed the original investors. It has a much larger ownership and risk, but a turnaround is more possible after retiring debt. China had yet to work out its problems. This is a long term play where the government in partnership with Disney will work together to fix the problems. This will take decades. The US parks are clearly profitable and getting more profitable.
The thing about Shanghai Disneyland is that they actually allow visitors to bring food and drinks from outside the park, hence the many recreation hotspots that can be seen around the park. I think it's part of the Chinese culture for families to sit down on an open-air area and have meals.
Disneyland Paris opened 25 years ago. Investments that take take three decades to pay off are poor investments. When a CEO makes poor investments, he should be fired.
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