This week, Wanda Group announced that it was reducing its stake in the theme park business, selling a majority of its ownership stake to rival developer Sunac China. So much for the wolves.
I'd like to imagine Bob Iger, ensconced in a Beverly Hills karaoke bar, queuing up the latest Katy Perry song... "Swish, swish, bish." Oh, who am I kidding? Bob Iger cares about the Wang Jianlin the way a Mack windshield cares about a bug.
And so ends the latest challenge to the established players in the multi-billion-dollar global theme park industry. At least a couple times a year, I get calls from reporters in communities across the United States, asking about some local developer's announcement to build "the next Disneyland" in their community. They always promise at least three to five million visitors a year and making tax dollars rain down on the community like Floyd Mayweather booking another
And their proposals last as long as a Mayweather opponent.
In recent years, the focus has returned abroad, as new challengers in China and the Middle East vow to cut into the global theme park marketplace. In the past year, we've seen four new theme parks open in Dubai, and a slew of Chinese parks have started moving up the annual TEA/AECOM Theme Index global attendance report. But Disney — and ascendent challenger Universal — remain far above the pack, taking advantage of the decades-long head start they've had in the business, as well as the global appeal of their affiliated entertainment franchises.
Some challengers try to close the gap by signing expensive IP licensing deals, which often end up sending money into Disney's and Universal's bank accounts. IMG Worlds in Dubai licenses Disney's Marvel characters while neighboring Motiongate Dubai licenses Universal's Dreamworks Animation, for example. But just licensing IP doesn't move you beyond the five-million-a-year attendance mark, as any Six Flags executive (or fan) can tell you. To run with the big dogs in the business, you need the patience — and the courage — to spend like Disney and Universal and then lose that money until the public comes around to believing that you are as serious about this business as Disney and Universal are.
You see, the public had been reading all those stories about all those developers promising "the next Disneyland." And after watching developments from Hard Rock Park to Motiongate Dubai over-promise and under-deliver upon opening, theme park fans have grown skeptical of new parks. Even Disney and Universal can't escape this skepticism, as parks such as Hong Kong Disneyland and Universal Studios Singapore struggled for years to build fan bases anywhere near the size of their corporate siblings. Disney learned that lesson and made sure to wow new fans with awe-inspiring new attractions such as Pirates of the Caribbean Battle for the Sunken Treasure and TRON Lightcycle Power Run when it opened Shanghai Disneyland last year.
If you want to open a new park and have it survive — much less take on Disney or Universal — you've either got to spend billions of dollars per park to win over fans immediately or show the patience to endure years of losing money while you build the park up to the point where fans will take it seriously as a vacation destination option.
After all, why take a chance on an unknown when you could just book with Disney and get the real thing?
I don't believe for a moment that Disney never can be beat in the theme park business. But I know that corporate bosses' ego, attitude, and grand ideas don't mean a thing to families thinking about where to spend their money on vacation. They want to see results — well-designed, attractive, engaging and welcoming parks that provide great value for their money. A tiny fraction of theme park fans will run to check out the start-ups. But the vast majority — the big chunk of the market where all the money is — will commit to visit only well-established parks. They can't afford to take a risk on disappointment.
That's the lesson for the Wandas of the world. If you want to get into this business, go big and stay in or don't bother. Developing a park on the cheap or expecting an immediate return? Well, quote the aforementioned Ms. Perry, you'll just be another one in the casket.Tweet
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