Developers shift their focus to theme parks
Real estate groups cash in on the growing demand for leisure due to 2nd child policy
Evergrande Group, a major real estate company based in Guangzhou, capital of Guangdong province, has launched a series of theme parks, aiming to diversify its business.
The parks, which will incorporate Chinese culture and history, will feature characters from China’s myths, legends and literary masterpieces to populate their “children-oriented, all-indoor and all-season” playgrounds, according to the company.
“We are targeting a growing number of visitors, especially families with children aged between 2-15,” said Xiao En, chairman of Evergrande Tourism Group, a subsidiary of the Evergrande Group.
Each of the theme parks, called “Children’s World”, will include 33 major rides, compared with 18-22 rides that Disneyland parks have on average, according to Xiao.
“All the parks will be designed by the world’s top designers,” Xiao said.
According to Xiao, Evergrande will build 15 Children’s World parks within the next two to five years.
“Each park will meet the demand from visitors living in a surrounding area of about 500 kilometers,” said Xiao.
The company, which announced its ambitious expansion plans in late August, is confident about the market performance of the theme parks, which it estimates will attract about 15 million to 20 million visits each year.
“Building children-featured facilities will become a major part for Evergrande’s diversified business in the near future as there will be a growing number of families wanting to go on leisure activities with their children,” Xiao said.
Like Evergrande, an increasing number of big Chinese real estate developers have shifted their focus towards theme parks. That’s to diversify their business while grabbing the opportunities offered by the burgeoning demand for leisure travel, especially from those families with a second child.
Wanda Group, owned by Chinese billionaire Wang Jianlin, has developed an aggressive goal to build as many as 15 Wanda Cities by 2020, comprising 51 different types of theme parks. The destinations earmarked for Wanda cities include Chengdu in Sichuan province, Wuxi in Jiangsu province, Guangzhou in Guangdong province and Chongqing municipality.
In its latest commitment to the country’s booming leisure industry, in July Wanda opened its third theme park in Harbin, capital of northeastern Heilongjiang province.
With an investment of 40 billion yuan ($6.2 billion), the project in Harbin, the largest recreation project in the country’s northeastern region, includes Russian-style theme park facilities, a movie theater and the world’s biggest indoor skiing and snow entertainment park covering an area of 1.5 square kilometers.
Income from Wanda’s services businesses, which include commerce, culture, the internet and finance, accounted for 55 percent of the company’s total earnings last year. They exceeded profits from its real estate operations for the first time, according to the company’s annual financial report.
Separately, the company’s tourism industry income reached 17.43 billion yuan in 2016, a growth of 37.1 percent year-on-year.
China’s rapidly growing middle class has become a major factor behind the wave of development of theme parks, said Feng Shengping, director of the Guangdong Provincial Situation Research Center.
“China’s growing middle class, whose families often now have a second child, have developed a strong taste for leisure activities,” Feng said.
China readjusted its longstanding family planning policy by allowing couples to have a second child in 2016.
“The second-child policy will help boost a family’s growing demand for leisure activities,” Feng said.
There are about 300 parks in operation already across the country, according to Macquarie Group, a global investment banking and diversified financial services group.
According to industry consultancy Aecom, a total of 59 new theme parks will open in China by 2020, serving an estimated 220 million park-goers and rivaling the United States in terms of scale.
China’s leisure industry will be worth 10 trillion yuan in the years to come, according to the China National Tourism Administration.
In addition to Chinese developers’ focus on theme parks, a number of overseas leisure tourism operators have also pinned high hopes on the Chinese market.
The world’s famous Shanghai Disneyland welcomed more than 11 million tourists, a year after it opened its doors in June 2016.
The Walt Disney Company’s chairman and CEO Robert Iger was quoted by Xinhua News Agency as saying that Shanghai Disneyland was likely to break even during the 2017 fiscal year, extremely quick for a global theme park.
Ye Bi, a Guangzhou-based nurse, said development of more theme parks would help meet the needs of bringing her family to leisure activities.
“Whether they are indoor or outdoor parks, we are expecting to have special experiences with the family in these facilities,” Ye said.
Ye added she had made plans to visit Shanghai Disneyland during the National Day holidays, with her 8-yearold daughter and a second child, an 11-month old baby boy.