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Asian Theme Park

Merry-go-round in Asia

THEME PARKS SPRING UP ACROSS THE REGION AS INTERNATIONAL AND REGIONAL PLAYERS HOP ON BOARD TO RIDE THE GROWTH
WORLD’S STEEPEST ROLLER COASTER “TAKABISHA” AT FUJI-Q HIGHLAND AMUSEMENT PARK IN
FUJIYOSHIDA CITY AT THE FOOT OF MT. FUJI IN JAPAN. AFP PHOTO / YOSHIKAZU TSUNO

By PEARL LIU in Hong Kong, October 2015.

Thrilling rollercoaster rides, cuddly costumed characters and lots of snacks. These are just some of the attractions that keep children flocking back to theme parks, accompanied by adults, to share the experience. And fanatics across Asia now have even more opportunities for fun days out than ever before.

By the end of this decade, more visitors will hit theme parks or amusement parks in Asia than in any other region in the world. And companies are lining up to ride this growth.

Nearly 223 million people visited the top 25 theme and amusement parks around the world last year, 4 percent more than in 2013, according to the Themed Entertainment Association. About one-third of those top 25 parks, measured by attendance numbers, are now in Asia.

Although North America – the United States in particular – is home to the largest and busiest theme parks in the world, Asia is fast catching up as new parks crop up at a rapid clip while existing ones expand. Asia’s largest theme parks grew between 5 and 7 percent per year for the past couple of years, about twice the rate of their US counterparts. The top 20 amusement or theme parks in Asia last year saw their total attendance expand by 5 percent between 2013 and 2014 to 123 million. By comparison, attendance at the top 20 parks in North America grew by a little more than 2 percent to 138 million.

“The theme park market has seen the steepest increases in the world (in Asia),” Chris Yoshii, vice-president for economics at industry consultant Aecom, toldChina Daily Asia Weekly. “We’ve forecast that Asian parks will overtake American parks in 2020.”

As with any industry driven by consumer spending, the huge potential of markets across Asia has attracted global corporations.

In September, Comcast, the US-based communications conglomerate, inked an agreement to purchase 51 percent of Universal Studios Japan in Osaka. Although the park trails the hugely popular Tokyo Disneyland and Tokyo DisneySea in terms of visitor numbers, it has been growing every year, most recently thanks to the huge popularity of its Wizarding World of Harry Potter attraction that opened in July last year. The Comcast deal is estimated to be worth 183 billion yen ($1.5 billion).

Annual visitor numbers to Universal Studios Japan jumped by about 20 percent to a record 12.7 million visitors in the last financial year. “We are excited to expand our global footprint with this wonderful theme park in Osaka and are excited by the opportunities that lie ahead in Japan and all of Asia,” Brian Roberts, chairman and CEO of Comcast, said in September.

The company is now looking to the next huge market for theme parks – China. At the end of 2014, plans were rolled out to build a Hollywood-style Universal Studios theme park in Beijing.  Comcast is now looking to get a jump on market leader Disney, which is also expanding its offerings in the region.

In Shanghai, the $5.4 billion Shanghai Disney Resort is scheduled to open next spring. The park will see some of Disney’s favorite characters – including Mickey Mouse, Cinderella and Frozen’s Elsa – speaking in Mandarin, adding one more language to their long multilingual list, which includes English, Cantonese, Japanese, French and Malay.

Walt Disney Company chairman and CEO Bob Iger speaks in front of a model of the new Shanghai Disney Resort during a press event in Shanghai on July 15, 2015. US entertainment giant Disney gave the first detailed preview to the media for its planned theme park in Shanghai, promising Chinese features and new attractions unlike its five other resorts, executives said. AFP PHOTO / JOHANNES EISELE.

Walt Disney Company chairman and CEO Bob Iger speaks in front of a model of the new Shanghai Disney Resort during a press event in Shanghai on July 15, 2015. US entertainment giant Disney gave the first detailed preview to the media for its planned theme park in Shanghai, promising Chinese features and new attractions unlike its five other resorts, executives said. AFP PHOTO / JOHANNES EISELE.

The Shanghai resort is a joint venture between Disney, the world’s biggest theme park group, and State-owned enterprise Shanghai Shendi. The two companies have been building the park in the Pudong district of the city since 2011 on 400 hectares of land. Underscoring the importance of tourist revenue generated by new theme parks are the resort complexes that typically spring up around the new locations. Shanghai Disney also includes two themed hotels with 1,220 rooms as well as a retail, dining and entertainment complex.

A number of movie-inspired theme parks are also set to open in the region in the coming years.

Twentieth Century Fox World at the Genting Highlands Resort outside of Kuala Lumpur, Malaysia, is planning its grand opening for next year. The 25-acre park will feature more than 25 rides and attractions based on Fox films such as Ice Age, Alien vs Predator, Planet of the Apes and Night at the Museum.

“The world’s leading theme park groups are boldly stepping into the untapped market in Asia, especially developing Asia, with its burning demand for entertainment,” said Aecom’s Yoshii.

Although Asian economies are slowing, a growing consumer class is emerging. Average GDP per capita across the region is expected to double from about $6,000 currently to about $11,000 over the next decade. At the same time, the overall population of 4 billion people is expected to grow by another 300 million in the same period, according to BMI Research.

It’s not just big international names getting into the market, Asian companies have also been keen to tap into the growth.

In the early 1980s, families across developing Asia would plan for weeks or even months to travel to a nearby city. Regional incomes have risen enough that international travel has become fairly commonplace. According to Citibank, when families’ incomes hit the $20,000 mark per year, people start traveling. At $35,000, they travel globally.

“The increasing favoring of tourism among people in Asia is driving up the popularity of theme parks in the main tourism destinations such as Japan, Singapore and mainland China,” said Yoshii.

And it is not just big international names getting into the market. Asian companies have also been keen to tap into growth. Australia’s Village Roadshow is teaming up with Chinese State-owned finance giant Citic to create a $500 million fund to invest in Asian theme parks. A potential site has been identified in Chengdu, capital of Southwest China’s Sichuan province – home to the much-loved panda bear.  Another site is in Johor Bahru in Malaysia, a shopping attraction for tourists from Indonesia, Singapore and South Korea as well as the home of Legoland Malaysia.

In the past decade, three Chinese theme park operators – Overseas Chinese Town (OCT) Parks, Chimelong and Songcheng – joined the ranks of the top 10 theme-park groups worldwide. The parks attracted 28 million, 18.6 million and 14.6 million visitors, respectively, last year.

Numbers from print

In September, the Dalian Wanda group opened Wanda Xishuangbanna International Resort in Wuhan, Central China’s Hubei province. The resort cost $2.5 billion.

China is already a preferred destination for theme park operators, attracted to the country’s large population. Out of the 20 largest and most popular amusement parks in Asia, 13 are in China.

“Theme parks in China have been transformed,” said Ba Zhaoxiang, a professor at the department of tourism at Fudan University in Shanghai, who researches theme parks.

“Before, theme parks on the Chinese mainland mostly targeted young people who like adventure and excitement and can be satisfied with the fancy thrilling facilities,” said Ba. But the niche was too small, he noted. “A new generation has emerged in the last three or four years that is more focused on visitors’ experience, not only visually, but in all aspects. “Now the parks are more like resorts that entertain all age groups, from small kids to even the elderly,” said Ba.

Hence, the parks are no longer small parcels of land with a merry-go-round and a rollercoaster, but huge complexes with attractions themed on Western and local cultures as well as facilities for entertainment, sports, gaming, shopping and hospitality.

But there are concerns that the economic growth that has been such a big motivation for theme park operators is now fading. And this could lead to difficult times for theme parks, a repeat of the dark days after the 1997-98 Asian financial crisis. On Oct 19, China reported growth of 6.9 percent in the third quarter of the year, the slowest growth since 2009. For the time being, those worries seem to be unfounded. Rather, theme parks have proven to be much more resilient than other sectors. “On the contrary, while industries like manufacturing slow down, investors are turning to new markets. And theme parks are a promising sector that is still underserved in China as well as in the region,” said Yoshii.

The Asian market is undersupplied, whereas most markets in advanced economies are mature or saturated.

“Asian theme parks are getting bigger, adding and expanding to leverage a growing market, especially tourism.”

Lotte World in Seoul, South Korea, experienced a big increase in attendance almost entirely due to Chinese mainland tourists visiting the park. In Hong Kong, Ocean Park and Hong Kong Disneyland are reporting their highest ever visitor numbers thanks to growing tourism.

Yet, the veteran industry consultant believes there is still room for growth. “The Asian market is undersupplied, whereas most markets in advanced economies are mature or saturated,” Yoshii said.

Avoiding a rollercoaster ride THEME PARKS MUST ADAPT TO LOCAL TASTES AND REINVEST IN ATTRACTIONS TO KEEP VISITORS COMING BACK

ATTENDANTS WEARING MICKEY MOUSE EARS DURING A PRESS EVENT FOR THE NEW SHANGHAI DISNEY RESORT IN SHANGHAI ON JULY 15, 2015. AFP PHOTO / JOHANNES EISELE

By PEARL LIU in Hong Kong

Fun is serious business in Asia.

Although developing a successful theme park is not easy, the potential of a huge and currently underserved market is attracting domestic and overseas investors. But what is the magic ingredient that can make a theme park a success or a colossal failure?

“The success and failure stories in theme park industry often have different reasons. Location is critical yet not always thought through,” said Dan Steinbock, a researcher who focuses on investment and risk. Theme parks generate some $25 billion in revenue every year. It is estimated that some 550 million people around the world will visit a theme park this year.

“The most profitable theme parks tend to be located in big countries, big markets. That’s the best way to leverage them,” said Steinbock.

He referred to Hong Kong Disneyland as “a different story”. Like Singapore, Hong Kong Disneyland hoped to leverage its attractiveness regionally, via Guangdong province – which borders Hong Kong and other parts of China – as well as Southeast Asia, said Steinbock. “Nevertheless, that’s not easy because there is more and more competition in all these locations,” he said.

When the American Dream theme park opened in Shanghai in 1996, it did so with great fanfare. The park was the first in China styled like its counterparts in the United States. It was built by the Hong Kong-based American Dream Parks & Entertainment Group and cost $50 million. The park had 31 rides, including a rollercoaster, and featured US-focused themes such as an area similar to Disneyland’s Main Street, USA and a Wild West World.

Starry-eyed investors envisaged 3 million visitors a year and expected them to pony up 100 yuan per person, which was a hefty fee at the time – double that of an average Chinese person’s monthly wage. But by 1999, only a few dozen people were showing up daily. Five years after it opened, the American Dream had given way to Asian reality. The park closed in 2001.

In contrast, Hong Kong Disneyland is a great example of a theme park that has seen both failure and, later, success.

Hong Kong Disneyland is a great example of a theme park that has seen both failure and, later, success.

Opening its gates for the first time in September 2005, Hong Kong Disneyland only started turning a profit in 2012. It took years to find its footing with new attractions such as Toy Story Land, Grizzly Gulch and Mystic Point. Disney Paint the Night, an interactive light parade every evening, strengthened its appeal as a tourist destination and drew an influx of Chinese mainland visitors. But in its first seven years of operation, the park lost HK$5.4 billion ($700 million). However, in 2012 Disney turned a profit of HK$109 million, boosted that to HK$242 million the next year and to HK$332 million in 2014, a 37 percent increase.

20150727liu05s.jpg
Star Wars characters march during Star Wars fan parade at Hong Kong Disneyland, Lantau Island, Hong Kong on 27 July 2015. One of the biggest Star Wars fan parade in Asia Pacific at Hong Kong Disneyland. The park that opened in 2005 only started turning a profit in 2012. Roy Liu / China Daily.

Another park that struggled was Universal Studios Japan, located in Osaka. The theme park opened in 2001 and listed on the Tokyo Stock Exchange’s Mothers Market, which encourages high-growth startups. The park struggled with dwindling numbers of visitors and delisted in 2009 due to its lackluster performance.

Sim Choo Kheng, founder and CEO of the Sim Leisure Group, said there have been many similar failures of “imported theme parks” in Asia. “They must be treated as a warning sign for theme park investors,” he said. “It is just one of the best examples of ‘we know best’ – the fallacy of ‘if it works in the West, it must work elsewhere’.” The 20-year-old Dubai-based company has been involved in designing, building and managing theme parks across the region, including the Legoland Malaysia resort in Johor Bahru and Universal Studios Singapore.

Even the well-established parks can have down years.

Hong Kong’s longest-running amusement park, Ocean Park, has been profitable since its grand opening in 1977, but it has seen its earnings drop. In 2014, it reported a net profit of HK$96 million, down 24.5 percent from 2013. “The drop is mainly due to the downturn of group tourists and the government tightening its policy on Guangdong visitors,” said Allan Zeman, who served as the chairman of Ocean Park for more than 10 years from 2003.

Chinese mainland visitors to Hong Kong account for nearly half of the park’s attendance, while 40 percent of all visitors are local. The rest are overseas tourists, mainly from Southeast Asia. A tightening of mainland tourists has hit Ocean Park’s bottom line so the destination has had to adapt its offerings.  “Ocean Park has added more Hong Kong elements to attract more local (visitors),” said Zeman.

One telling example is the park’s annual Halloween celebration. The park is decorated with the usual pumpkins and vampires, but also has a Chinese twist with yellow paper talisman and eyeball-shaped siumai — a popular dim sum offering in Guangdong province.

Theme parks may have originated in the West but they must be tailored to local tastes to attract local visitors. This is a costly lesson that some park operators have learned the hard way.

Theme parks may have originated in the West but they must be tailored to local tastes to attract local visitors. This is a costly lesson that some park operators have learned the hard way.

“How could anyone design the biggest surf pool in the world in a country where 70 percent of the population can’t swim?” said Sim from Sim Leisure, referring to the Sunway Lagoon theme park in Selangor, Malaysia.

He explained with a metaphor: “The Chinese may patronize McDonald’s restaurants but fast-food noodles and dumplings shops will eventually give McDonald’s a serious nightmare. Same thing here.”

And the inherent difficulties that experienced Western operators have to overcome to develop successful theme parks are now exacerbated by the emergence of Asian investors and developers, flush with cash and eager to take a piece of the action.

Among them are many local conglomerates whose main businesses are in real estate or hospitality, who are looking to the untapped theme park industry, where growth is fast and volumes keep rising.

Among them is Dalian Wanda, the Chinese conglomerate that opened a $2.5 billion resort and theme park in Wuhan, capital of Central China’s Hubei province, in September.

For many of these new players, money and funding are not a concern. But what they have in deep pockets they may lack in experience.

“Theme parks require high-profile brands and franchises,” said Steinbock, the researcher. “Disney has Mickey Mouse and Donald Duck, Universal has Tom and Jerry and so on. That’s why entry is a lot harder for new players.”

Theme parks may have originated in the West but they must be tailored to local tastes to attract local visitors. This is a costly lesson that some park operators have learned the hard way.

One lesson new entrants should learn is to reinvest constantly and win repeat visitors. They also have to keep refreshing themselves to bring people back.

Hong Kong’s Ocean Park is an example of a park that has found a way to offer something different every time. Unlike many of its competitors, it also has animal exhibits including pandas, and a large aquarium. “Luckily Ocean Park has our animals, who are cute in different ways every day,” said Zeman. “At the same time we have never stopped bringing new projects to our visitors these years.”

Starting last year, the park is expected to add 30 attractions in its latest round of development projects. The makeover includes a 400,000 square-foot Water World featuring an indoor surfing simulator, 13 slides and wave pools. After a yearlong discussion over land premium with the government, the park is finally kicking off plans to add the Ocean Hotel, a four-star 495-room hotel expected to open by 2017.

The most valuable part of a theme park is not necessarily the up-to-date equipment. What counts most may be uniqueness.

Successful theme parks create their own stories and content in which the faster, higher, scarier rides and high-tech facilities play the biggest supporting role. The star attraction in this business is inimitability. “If there is no soul but just some big fluffy toys and characters that no one knows in a grand area with some big equipment, then it cannot be called a theme park,” said Zeman. “And I have seen many fail in Asia.”

What makes Ocean Park different, he said, is that it focuses on education and conservation of the ocean and animals. Sim said that the biggest challenge in the theme park business in Asia is for the investors “to realize whether they really have the heartbeat for the business”. “If you take up music because you think you can make tons of money, without the passion and the flair, you will ultimately fail,” he concluded.

Asian theme parks grow at a fast clip FROM CHINA TO INDONESIA, THE REGION IS NOW HOME TO SOME OF THE BIGGEST AND MOST DIVERSE PLAYGROUNDS IN THE WORLD

YOUNG NOVICE BUDDHIST MONKS RIDE ON A ROLLER COASTER IN THE EVERLAND AMUSEMENT PARK IN YONGIN, SOUTH OF SEOUL. ASIA’S BIGGEST THEME PARK IS FACING INCREASING COMPETITION ON ITS HOME TURF. AFP PHOTO / JUNG YEON-JE

By ALFRED ROMANN in Hong Kong

Massive efforts and huge investments have led to the creation of new and interesting parks in Asia, while older and more traditional destinations have continued to expand.

Some of the best fun parks in the world are now in Asia – thanks to a series of openings in recent years and a fair amount of cash – with the biggest players mushrooming in China, Japan, South Korea, Malaysia and Indonesia.

The UN World Tourism Organization includes theme parks as one of the key reasons why people visit cities, and city tourism is poised to grow rapidly over the next two decades. Theme parks, which provide a lot of entertainment options packed into a tight area, are an ideal way to attract more tourists to cities.

But building these attractions is not cheap and the risks can be significant. One of the more interesting theme park gambles was Hong Kong Disneyland, which opened in 2005. The Hong Kong government paid 88 percent of the HK$4 billion venture for 57 percent of the equity.

It was a huge risk taken to attract tourists, but necessary to boost an industry and an economy that had been hit by the Asian financial crisis of 1997. And it was backed by Disney, the most successful theme park operator in the world. In 2014, Hong Kong Disneyland attracted 7.5 million visitors.

Hong Kong is also home to another large and successful theme park. Ocean Park, opened in 1977, is split on multiple levels atop a hill that overlooks the southern bays of Hong Kong Island. It attracted 7.6 million visitors last year, just shy of the record high of 7.7 million turnout in 2013, and earned HK$2 billion in revenue.

The theme park industry on the Chinese mainland may have had a later start, but it is making up for it by its huge size and the sheer number of destinations across the country. Dozens of parks of different sizes open every year.

The theme park industry on the Chinese mainland may have had a later start, but it is making up for it by its huge size and the sheer number of destinations across the country. Dozens of parks of different sizes open every year. The Happy Valley chain alone has parks in Shenzhen (2002), Beijing (2006), Chengdu (2009), Shanghai (2009), Wuhan (2012) and Tianjin (2013).

The biggest new entrant may be the Wanda Group, a property developer with major interests in cinema, which opened Wanda Xishuangbanna International Resort in Yunnan province this September. It took four years to build and cost a hefty $2.5 billion. It is also the company’s first public park. “Tourism is a key developing industry in Wanda’s fourth transformation, and we intend to become the largest travel company around the world, with 200 million tourists, and realize revenue of 100 billion yuan within five years,” Wanda chairman Wang Jianlin said at the opening ceremony of the new park.

The Chinese people’s fervent response to theme parks is something developers are counting on as they launch dozens of new ventures every year. According to the China Theme Park Pipeline Report 2013 from professional services firm AECOM, based on current attendance growth, by 2020 visitor turnout in China will outpace that of the United States. Park attendance surpassed 108 million visitors in 2013, and with a 10 percent rise of domestic tourism year-on-year, China’s theme parks will only expand.

A new Disney park in Shanghai that will open next year will complement the ones in Hong Kong and Japan.

Japan may be home to some of the most interesting theme parks in the region. Japan’s Oriental Land, operator of the Disney theme parks in Japan, has run Tokyo Disneyland since the 1970s and then built DisneySea in 2001. With a price tag of $4 billion, it was the most expensive theme park ever built.

Theme park art

The Disney brand carries clout. As a theme park company, Disney is the largest in the world by far and its parks often do well. The biggest theme park in Japan is Tokyo Disney Resort, which includes Tokyo Disneyland and Tokyo DisneySea. The two parks attracted 14.37 million customers between April and September, a drop of almost 5 percent from a year earlier, which has been attributed to bad weather.

WOOING THE CROWDS

Numbers AW two

“The main reasons for the attendance being so high (the previous year) were the popularity of new products and special events held at both parks,” explained Kyoichiro Uenishi, Oriental Land’s president and chief operating officer.

Movie-themed parks run by US film studio Universal are also opening up even as domestic players look for more market share. Universal Studios Japan attracted 6.54 million visitors last year, an 18 percent jump from a year earlier.

South Korea is also a big player and home to the largest theme park in Asia, Everland, which opened in 1976. Everland went public in 2014. The company that controls the park, a Samsung subsidiary, was valued at more than $8 billion last year. Among other attractions, it is home to the fastest rollercoaster in Asia, which reaches speeds of 200 kilometers per hour. It also has the largest water park in the country, two safari parks and a racing track. But Everland is facing increased competition on its home turf. As well as other major parks like Lotte World, after being delayed by the global financial crisis, a Universal Studios theme park costing $2.7 billion is scheduled to open next year near Seoul.

There are other, more niche, theme parks scattered across the region. Johor Bahru is a city in the south of Malaysia that is not generally well known to tourists. It has a population of half a million and, more importantly, Legoland Malaysia that opened in September 2012.

BUILDING UP INTEREST

Lego, a Danish company, spent around $311 million on the park. It attracts around 2 million visitors per year to check out mini cities built of Lego (using an estimated 30 million blocks) and a Project X rollercoaster, as well as a Star Wars area that opened in late 2014.

Most importantly for the park are the daily direct buses from neighboring Singapore that deliver large numbers of foreign tourists. Many of these tours are organized by JTB, a Japanese travel agency.

Nearby is another theme park, focused on Hello Kitty and related characters as well as a new park themed on Angry Birds, the popular video game.

Genting Malaysia is also working with US movie studio Twentieth Century Fox to open a theme park outside Kuala Lumpur in 2017, with the hope of attracting up to 5 million visitors a year. The park is part of a decade-long makeover of Genting Highlands Resorts that started in 2013.

But, highlighting the dangers that such large investments carry, Genting slowed down the project after the Malaysian ringgit dropped in value by about 20 percent against the dollar this year, according to CIMB Research.

Meanwhile, Indonesia has Trans Studio Bandung in Java and the older Trans Studio Makassar on the island of Sulawesi. The Bandung park has 20 rides and is indoors. The beach resort of Bali is also home to Waterbom Bali, famous as one of the best water parks in Asia.

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