Why the Asian Theme Park Business Is Exploding
This story first appeared in the July 4 issue of The Hollywood Reporter magazine.
The theme park business in Asia is exploding, with 2013 attendance up 7.5 percent compared with the previous year, according to a new report from the Themed Entertainment Association. That compares with a modest 2.5 percent increase for North and South America and a dip of nearly 1 percent in Europe and the Middle East.
"A lot of the Asian economies are growing and have potential way beyond North America," says Wall Street analyst Harold Vogel, noting the U.S. and Europe are growing at a slower pace.
Disney finally has fixed problem parks in Japan and Hong Kong, and Universal is riding a hot streak from Orlando to Osaka -- and activity may grow in China, where megasize real estate projects have floundered and developers see parks as a way to invigorate them.
The largest Chinese park operator is OCT Group, with 11 parks and two under construction. China's Fantawild, which became one of the 10 largest group owners in the world in 2013, has 10 parks that enjoyed a whopping 43 percent increase in 2013.
The biggest project in Asia, Shanghai Disneyland (opening in 2015), was expanded in June, bringing the estimated cost to a total $5.4 billion.
Borrowing money to build them is cheap, says Vogel: "It's a function of low interest rates and an absence of alternatives."