China's Wanda Pledges $30B for Theme Parks and Related Developments
The Chinese conglomerate, headed by the country's richest man, plans to build 15 major resorts to take on Shanghai Disneyland, Universal Studios Beijing and other competition.
Dalian Wanda Group's multi-billion-dollar investment blitz continues.
On Thursday, the Chinese conglomerate unveiled its second $15 billion development project in one week, pledging to build a major theme park in China's historic Xi'an Province for 50 billion yuan (about $7.3 billion). The rest of the investment will go into various developments across the region, including 19 commercial plazas.
Last week, Wanda announced a similar $15 billion development scheme in China's Hunan Province, where it will construct another $7.3 billion theme park, plus a water park, luxury hotels, restaurants, cinemas, live performance venues and more.
In light of their enormity, Wanda calls these developments "Wanda Cities." Altogether, Wang has pledged tens of billions to build 15 Wanda City projects across China by the end of the decade.
China's richest man and one of the country's most influential business leaders, Wang said earlier this year that he intended to corner his country's booming tourism and theme park sectors via a strategy of pure speed and scale. When asked about Disney's $5.5 billion Shanghai Disney Resort in May, Wang said, "One tiger is no match for a pack of wolves — Shanghai has one Disney, while Wanda, across the nation, will open 15 to 20."
Last week, Disney revealed that its Shanghai park has gotten off to a healthy start. The facility had taken in 4 million guests since its launch in June and it is now expected to break even in its first full-year of operation — a much faster pace towards profitability than past Disney resorts achieved.
Wang has since softened his public stance towards the foreign competition — if not his intention to eventually smother it out of China. In recent interviews he has emphasized that Wanda and Disney are friendly partners in some areas and fierce rivals in others. Wang paid a visit to Shanghai Disneyland late last month, calling the excursion "both an observation and study."
Given the size of its investments and the complexity of the theme parks business, Wanda certainly will need to learn fast. In August, the company closed its first indoor movie theme park in the city of Wuhan for upgrades — just 19 months after its opening. Local sources said attendance had been far below expectations.
Meanwhile, Universal Studios is building a major theme park in Beijing, and Six Flags Entertainment is at work on six branded amusement parks in China.
Wanda launched two Wanda City projects earlier this year in Hefei and Nanchang. Wanda says Wanda City Nanchang has been faring better than the one in Wuhan. In July, the company said the theme park took in 300,000 guests in June, while the overall Wanda City development had attracted 2 million visitors in its first six weeks.
One of the largest Wanda development projects is the group's Wanda Movie Metropolis in Qingdao, which features the world's largest film studio as its central attraction. Some 30 percent of the film studio is now operational — Legendary Entertainment's Pacific Rim 2 began shooting earlier in the month — and a series of amusement parks and hospitality facilities are scheduled to open next door in 2018. During a landmark visit to Hollywood in October, Wang unveiled a generous 40 percent production incentive to try to lure U.S. productions to his studio.
Dalian Wanda Group began with — and its core business remains — real estate development. Wang is currently attempting to orchestrate a bold diversification into international entertainment, tourism and sports, as he believes the high-growth era of China's real estate sector is now entering its twilight. Overseas, Wanda plans to build five Wanda City projects, including a $3.4 billion project in France.
But the company's most eye-catching overseas moves have been in the film exhibition and production business. A $2.6 billion buyout of American movie theater circuit AMC Entertainment put the company on the map in 2012. On Tuesday, Wanda-controlled AMC was granted shareholder approval for a $1.2 billion takeover of Carmike Cinemas. Once combined — a review of the deal by the U.S. Department of Justice is expected to conclude this year — the company will be the biggest movie theater group in the world by far.
Its movie exhibition position secured, Wanda has been snapping up entities on the production end of the movie value chain with equal aggression. The company bought Legendary Entertainment for $3.5 billion in cash in January. A $1 billion deal for Dick Clark Productions, owner of the Golden Globes awards show and a TV production business, was announced two weeks ago. In October, Wang told The Hollywood Reporter that he planned to set up a major fund to invest billions into films produced by all of the big six Hollywood studios.