WUHAN, China—A Chinese property giant believes it can offer China a better time than Disney and Six Flags, and that this city of 10 million is ready for a water-acrobat show and a theme park.
Across China, Dalian Wanda Group Co. is setting up more than a dozen amusement parks, and it is building space rides and flight simulators to attract tourists. Its recipe for how to beat the foreign brands at their game: target lower-profile cities like this central manufacturing hub.
In Wuhan, Wanda has enlisted more than 100 acrobats and artistic director Franco Dragone to create China’s answer to Cirque du Soleil. It hopes that next year three million visitors will pay from 700 yuan to 2,200 yuan, or US$114 to US$358, to ride through a simulated Chinese landscape at its new theme park and watch acrobats dive from 20-plus meters into a giant pool at its “wet and dry” theater.
Both are set to open later this month.
Well-known Western theme-park companies have already planned big launches in China. Walt Disney Co. is set to open a park in Shanghai next year; Six Flags Entertainment Corp. said in June that it would build multiple Six Flags parks in China over the next decade. Comcast Corp. ’s Universal Parks & Resorts is opening a 20-billion-yuan (US$3.25 billion) theme park in Beijing.
Wanda has poured more than US$1 billion into its Wuhan plans. Theme parks can take a decade to turn a profit, said Chris Yoshii, a theme-park expert at engineering-services company Aecom Technology Corp.
Wanda, which pulled in US$4 billion in revenue last year, has built its global profile in recent years: It bought U.S. movie-theater chain AMC in 2012, and it owns British yacht maker Sunseeker. Wanda Chairman Wang Jianlin is one of China’s richest men.
While real estate is Wanda’s bread and butter, Mr. Wang is now aiming to corner the theme-park industry, much as he is trying to do in film. Wanda is now China’s largest operator of cinemas, and it broke ground on its Chinese version of Hollywood in Qingdao last year at a ceremony attended by celebrities including Nicole Kidman and Leonardo DiCaprio.
Wanda declined to comment on its total investment in theme parks.
Six Flags declined to comment on how it plans to compete with Wanda. Universal said it intends to create attractions just for China, with a spokesman adding that “Beijing is the perfect city” because of its tourism market. Disney acted early to build in China and is “uniquely qualified” to fit the growing demands for theme-park experiences in the country, a Disney spokeswoman said.
For major entertainment companies, China is critical growth turf. Over the past five years, revenue for the Chinese amusement-park industry has increased at an annualized rate of 12 per cent, according to research firm IBIS World, which says the industry’s revenue is expected to rise 9.6 per cent to US$2.9 billion this year.
The Chinese government is trying to rev up consumer spending at home and create a home-grown entertainment industry that will one day reach overseas. But amusement parks have a checkered history in China. They require vast tracts of land, and many “themes” have failed to catch on.
Wonderland, an amusement park opened by Thailand’s Reignwood Group outside Beijing, was torn down last year after its castle and villages sat vacant for more than a decade. Meanwhile, the Kingdom of the Little People, near the southwest city of Kunming, draws few people interested in a fabricated village built for China’s dwarf population.
As for Cirque du Soleil, it has scaled back its China ambitions. In 2013, the Canadian company’s Michael Jackson show failed to fill all the seats on stops in Beijing and Shanghai. Cirque du Soleil didn’t respond to requests for comment.
In 2011, the government stopped construction of locally approved theme parks larger than 20 hectares, or about 50 acres, to rein in local government spending and unauthorized development. Some of the bigger theme parks now have to be approved directly by the central government.
For foreign theme-park brands, securing land has been one of the biggest hurdles. Universal’s single project took 13 to 14 years of negotiations with Chinese authorities, said Tom Williams , chief executive of Universal Parks & Resorts. Disney executives have described the negotiations to get Shanghai Disneyland approved as “a long and interesting process.”
Wanda, one of China’s best-known property developers, with 100 shopping malls across the country, has had an easier time.
Its focus on smaller cities has helped. Despite the government’s restrictions, hinterland government officials are still eager to generate jobs and economic growth, and are more likely to grant land contracts, experts say.
In the coastal city of Wuxi, for example, Wanda has dedicated 40 billion yuan (US$6.5 billion) to development centred on a theme park.
Such strategies speed up the process and “help them secure the land at low cost,” said Zhu Guozhong, a real-estate and economics professor at Peking University’s Guanghua School of Management, of Wanda.
Real-estate experts say sales of new condos as part of the theme-park push will also benefit Wanda’s property arm, Dalian Wanda Commercial Properties, which is preparing to raise US$3.8 billion in a Hong Kong listing as soon as this year.
Making money may be harder in the smaller cities, said Mr. Zhu. Beijing and Shanghai, where Universal and Disney have launched projects, have no problem attracting tourists. But, he added, the investment and upkeep needed for Wanda’s parks is also lower.
Wanda in the past has drawn on the Disney formula. A Disney “Little Mermaid” lookalike decorates a fountain outside Wanda’s “Movie Metropolis” in Qingdao. But expect borrowing from the West to change, as Wanda creates its own characters in the new theme parks, said Mr. Yoshii.
Mr. Wang is already ditching Cinderella fantasy castles in favour of Chinese themes, spraying mist at tourists on a simulated ride over the mountains and temples of Hubei province at the Wuhan park.
The goal is to put China “on the stage and lead world-class entertainment,” said Tang Jun, vice president of the Beijing Wanda Cultural Industry Group, at a recent news briefing.
Success is far from inevitable for Wanda, which is a newcomer to a sector in which Disney has six decades of experience. Experts say it may be a steep learning curve to navigate safety, hospitality and entertainment.
Wanda already has some competition at home. A Chinese company called Overseas Chinese Town Enterprises Co. is currently China’s largest amusement-park operator, running 18 parks with traditional roller-coaster-type rides.
Wanda is now racing to get its projects off the ground. In Wuhan, it is readying the opening of “The Han Show,” a 90-minute love story highlighting Chinese history, at its pool-outfitted theater. It isn’t yet clear how the water fits into the story line.
Wanda will learn lessons along the way, said Aecom’s Mr. Yoshii. But he said it was worth noting that in 10 years, “they’ve gone from not being in the business at all to being one of the major players.”