What’s Behind the China Theme Park Boom?
Posted by Elizabeth Alton on Friday, January 17th, 2014
Asia is currently one of the hottest theme park markets in the world. If you follow theme park news closely, this trend quickly becomes evident. China has been an epicenter of activity with news of major theme park investments, brand new park openings, and hot attraction developments hitting the wire on a weekly basis. Just last week, one park made international headlines with the news that it will be reenacting the Titantic shipwreck. What’s driving China’s theme park boom?
First, it’s helpful to understand what’s fueling the growth. Investors are banking on both increasing demand and the industry’s profitability. Recent legal changes have made it much easier to seek approval for new park development. In 2013, the Chinese government lifted a ban on approvals for new theme parks. Now, except for massive scale projects exceeding 5 Billion Chinese Yuan (or more than 800 million USD), approvals can be handled at the provincial level. This has opened up numerous opportunities for motivated investors.
AECOM released its China Theme Park Pipeline Report 2013, offering some insights into the market size and trends. In 2012 and 2013, 12 new theme parks and 1 new water park opened. Park attendance surpassed 108 million visitors. The report estimates that based on current attendance growth, by 2020 theme park visitor turnout in China will outpace the US market. As of the time of this writing, a staggering 59 new theme parks and water parks are in development throughout the country.
What’s driving the demand? China’s massive population is one factor. The Chinese middle class is growing quickly. Domestic tourism (Chinese residents traveling within China) is rising 10% year over year. But is this growth big enough to support the bevy of ticket prices at all these new theme parks?
Likewise, foreign tourism in China presents another potential consumer base. The Chinese National Tourism Administration estimated just over 118 million visits to the country between January and November of last year. But there are a number of factors to consider about foreign tourists as a target market. First, Chinese tourism has actually stagnated in recent years. Second, it’s important to look at what experiences tourists want when they visit China. It may be difficult to argue that tourists spend their limited vacation days at theme parks, when they’ve traveled thousands of miles to a vast country with over five thousand years of history and culture to take in.
The types of attractions vary, from massive clusters of parks that aim to rival Orlando to simpler entertainment complexes that integrate with urban environments. Hong Kong Disneyland is one very recognizable brand in the market. Shenzhen Happy Valley is a modern park, with multiple sections along familiar themes such as Cartoon City, Adventure Mountain, Gold Mine Town, Shangri-la Forest, and Maya Water Park.
Another iconic Chinese theme park with a foreign focus is Window to the World, where visitors can check out 130 different global tourist attractions. With nighttime cultural shows, it’s not unlike Epcot. Others center on Chinese cultural and mythic themes. The China Folk Culture Center offers an inside look at the cultural traditions of China’s 56 distinct ethnic groups. One interesting park, Splendid China, is described as “the largest and most comprehensive miniaturized theme park in the world, covering 30 hectares.” It features more than 80 attractions at 1:15 scale that have been organized around the property relative to a map of China.
AECOM’s report takes a look at what’s on the horizon for Chinese theme park development. The authors suggest that the future is in integrated projects, combining theme parks with hotels and conference facilities. More diversified theming is expected, along with more water parks and additional attractions that connect to Chinese culture. Conceptually, you can argue that these parks run the gamut and already offer creative entertainment design. But there’s room for growth and diversification, and we’re interested to see how the nearly 60 parks under development deliver on that promise.
China’s theme park boom is clearly getting both government and private sector support. A number of factors remain to be seen that will determine the eventual success and sustainability of this industry. Can so many new theme parks all survive in the same country? At a certain point, wouldn’t the market become over saturated? Safety and stability is also critical. How much oversight and regulation is going into ride development, construction, and operations? In a country with an unfortunate history of natural disasters, this has to be taken into account. Development also has to take consumer preferences into account, and innovate on traditional theme park concepts with an eye toward the Chinese market. It’s clear that a renaissance is happening, but right now it’s hard to predict what the Chinese entertainment design landscape will look like a decade from now.
Image credits: SCMP, Forbes, Disney, and Daikon