Disney dreams come true as Shanghai resort opens doors
Potential for profit in China huge as entertainment goliath takes great lap forward
SHANGHAI — “Mickey Maose” has officially arrived.
In a rain-dampened ceremony attended by Chinese dignitaries, the Walt Disney Co. on Thursday opened its $5.5 billion (U.S.) Shanghai Disney Resort, a theme park and hotel complex that represents a hard-fought victory in China for the singularly American entertainment conglomerate.
“Our dream comes true,” a beaming Robert A. Iger, Disney’s chief executive, said in Mandarin at the ceremony’s start. The park — Disney’s first on the Chinese mainland — was held up as nothing less than a historic symbol of U.S.-China relations. Iger read aloud a letter sent by President Barack Obama that heralded the resort as capturing “the promise of our bilateral relationship.”
In a letter of his own, China’s president, Xi Jinping, called the project, which took nearly two years of bruising negotiations to realize, a sign of China’s “commitment to cross-cultural co-operation and our innovation mentality in the new era.”
On a lighter note, Wang Yang, one of China’s vice-premiers, stood onstage in front of the park’s lavish storybook castle and joked that the rain was a sign of good luck — the “rain of U.S. dollars and RMB,” he said, referring to China’s currency, the renminbi. Disney owns 43 per cent of the resort, with the majority stake held by a Chinese state-controlled consortium.
With that, fireworks exploded, fountains danced and jubilant performers dressed as Disney princesses took to the stage as more than 30 dancers and flag twirlers frolicked.
It was a discordant scene with happenings elsewhere in the Disney empire. Iger was awakened at 4 a.m. Thursday with the news that the authorities in Florida had found the body of a toddler, Lane Graves, who had been dragged by an alligator into a hotel lake at Walt Disney World on Tuesday. Iger phoned the child’s parents and said in a statement that “as a parent and a grandparent, my heart goes out to the Graves family during this time of devastating loss.”
Iger and his public affairs teams, working nearly around the clock from Shanghai in recent days, also had to contend with the mass shooting on Sunday in Orlando, Florida, which is in many ways a Disney Company town. Disney employees were among the shooting victims; it was subsequently reported that the gunman, Omar Mateen, had scoped out a Disney World shopping complex.
In Shanghai, more than a year of meticulous planning resulted in an opening that was surprisingly smooth. So far, the park in Shanghai has suffered none of the cultural mis- steps that marred Disney openings in France and Hong Kong over the decades.
“I brought my daughter here because she loves Mickey,” said Zhang Yan, 28, who came on opening day with her daughter Li Xinyi, 7, who was wearing pink princess regalia. Zhang said she had driven three hours from Yangzhou.
Iger’s goal for Shanghai Disneyland was nothing short of immediate perfection, but no amount of experience, planning and focus-group research could prepare Disney for what would happen when Chinese patrons began to pour through the gates. Would they buy mouse ear headbands? How long would they stay? Would they understand that waiting in line was part of the experience?
“On a lot of things, we had no idea,” Iger said, striding through the park Saturday, an extremely sticky day on which roughly 35,000 people turned out as part of a soft opening.
So far, the answers have been mostly positive.
“Turkey legs, corn dogs, hamburgers, popcorn — what you might call American food — is blowing the doors off,” Iger said. “We didn’t expect that.”
Mouse ears are one of the biggest sellers in stores. “I’ve even seen men wearing them,” Iger said.
Although Disney holds only a minority position in the park, the profit potential for the company remains nothing short of spectacular, analysts say. It will receive 43 per cent of revenue from the park, which includes merchandise, food sales and hotel income.
Single-day adult ticket prices cost $75 (U.S.) on weekends and holidays, a healthy price in China, and $56 for nonpeak days. (That compares with $125 and $105 at Disney World.)
Disney will also receive a fee for its role in managing the resort and royalties for the use of its characters and will also get a bump in interest in its movies, toys, books and games. Even a little growth in China would have a big financial impact on Disney. The entertainment conglomerate generated $52.5 billion in revenue in its last fiscal year and Asia represented about 7.5 per cent of that total.
Disney does not release more detailed information, but Anthony DiClemente, an analyst at Nomura Securities, estimates that Disney had $1 billion in revenue in China in 2015; excluding Hong Kong, the total is closer to $700 million — a drop in the Disney bucket.