Walt Disney OKed to Open Disneyland in Shanghai

The Walt Disney Company (NYSE: DIS) has gained go-ahead from the Chinese regulators to set up a Disneyland in Shanghai, eastern China, a move that will give the US-based entertainment titan a larger foothold in the world's most populous market.

The company will discuss details about the construction and management of the project with its partners in Shanghai in the future, said Walt Disney Co. on November 4, noting that a fascinating Kingdom-style theme park with characteristics tailored to Shanghai and holiday resort facilities will be included in the first phase of the project.

The theme park, to be set up in the prosperous Pudong New District, will be jointly launched with some big-sized state-owned companies in Shanghai, according to the Burbank, California-headquartered company, without giving details. There were widespread reports that the Shanghai project would be 43% held by Walt Disney Co. and 57% taken by companies under the aegis of the municipal government of Shanghai, a proportion similar to the holdings allocation in the Hong Kong Disneyland.

As much as CNY 24.48 billion will be poured into Shanghai Disneyland, which is likely to come into operation in 2014, predicted people familiar with the matter at the beginning of the year, although Walt Disney Co. said that financial details about the project would be subject to the agreement with its Shanghai cooperators.

The presence of a Disneyland in the eastern metropolis will mark a milestone for Walt Disney Co. in Mainland China, a market of great potential, said Robert A. Iger, president and chief executive officer for the company. The US entertainment giant has set foot in China as early as 2005 by opening a Disneyland in Hong Kong.

The Shanghai Disneyland will enable Walt Disney Co. to get a new profit generator at a time when its business at home is on the decline amid the financial crisis, pointed out chief consultant at HotelSolution Consulting Ltd. In its financial report unveiled at the end of this July, Walt Disney Co. posted a 19% drop in global Disneyland theme park operation for that quarter.

For Shanghai, the world-acclaimed Disney theme park is expected to serve as a driving force for the local economy, bringing 3 million to 5 million tourists a year, boosting sectors such as hotel, transportation, and catering, and pushing consumption up CNY 40 billion, predicted market observers.

(USD 1 = CNY 6.83)

Source: dycj.ynet.com (November 05, 2009)

Related terms: business, california, ceo, china, consulting, economy, entertainment, government, hong kong, hotel, market, nyse, president, shanghai, transportation, SinoCast China Business Daily news, SinoCast China Financial Watch, Disneyland, theme park, foothold, project, agreement, holdings, tourism, consumption