The case for building a Disney theme park in Shanghai is obvious on paper. With a population equivalent to the entire U.S. living within a three-hour drive, the opportunity was simply too big to ignore.
But that doesn’t mean that the $5.5 billion Shanghai Disney Resort — the park, a downtown area, and two hotels — was fated to succeed after opening in June. In fact, the record of Disney’s adventures abroad is spotty at best.
As Shanghai opened, questions lingered about whether the Chinese audience would accept the steep prices ($56 for a single-day admission) or embrace what is, for all the Chinese touches, fundamentally a Western experience.
Four months in, the gamble appears to be paying off. Though there were rumors about attendance softening after the summer rush, Disney CEO Bob Iger announced earlier this month that 4 million visitors have already come through the turnstiles — a robust sign. Though he was careful not to make promises, Iger said the company would be “thrilled” to break 10 million visitors in the first year.
“I think it vindicates Iger’s big bet,” says Martin Lewison, a business professor at Farmingdale State College. “I would not be surprised if those attendance figures continue to grow over time as the Chinese middle-class grows.”
Around the theme-park industry, which Disney rules as the undisputed Goliath, there is widespread acclaim for the new park. Its attractions, including the Tron roller coaster and the Pirates of the Caribbean ride, are widely regarded as the best anywhere. Matched with Disney’s famed attention to detail, the park is drawing rave reviews.
“It’s something only Disney could do,” says Dennis Speigel, president of International Theme Park Services. “It’s an enormous amount of money, but they spent the money correctly. … I’d be surprised if they don’t hit 15 million-plus in the first year.”
That would make Shanghai the fourth- most-visited theme park in the world (after Disney World, Disneyland, and Tokyo Disneyland). Even at 10 million visitors, Shanghai would be in the top 10 worldwide, according to the Themed Entertainment Assn.
“We’re gonna see some huge numbers out of Shanghai for that park,” says Steve Birket, president of the association, adding that it should also provide a lift to non-Disney theme parks across China. “It’s a great time in our market, and certainly a great time in China.”
Shanghai Disney is running at a loss for now, as is generally the case for new parks. But Iger expects it to get near break-even in its second year of operation. The real upside is longer term: By exposing the Chinese audience to Disney characters, it primes the marketplace for other Disney products.
“They’re here to educate you about the Disney brand,” says Edward Marks, CEO of the Producers Group, who worked on some aspects of the park. “They’re not telling Chinese stories. They’re telling Disney stories in a Chinese way.”
Other international parks have been tarred as outposts of cultural imperialism. But at Shanghai, Mark says, Disney struck the right balance. “They didn’t make those mistakes. Shanghai is absolutely a Chinese experience for the Chinese, brought to you by Disney.”