China’s Dalian Wanda Group has announced its second US$15 billion development project in a week as the chairman Wang Jianlin steps up his efforts to surpass Walt Disney as the world’s largest tourism company by the end of the decade.
The Beijing-based conglomerate has signed an agreement with China’s Shaanxi provincial government to pour 103bn yuan (Dh55.09bn) in investments to build theme parks and commercial centeres there, including a Wanda City complex in the capital Xi’an, the company said. Last week, Wanda announced a similar project in China’s central Hunan province.
Wanda plans to have 15 Wanda City projects across China by 2020, betting on strength in numbers to become the biggest Chinese theme parks operator amid rising competition from overseas. The $5.5bn Shanghai Disneyland, which opened in June, attracted four million visitors in its first four months and the company expects it to be close to breaking even in its first full year of operations.
In Shaanxi, projects will include the construction of 19 Wanda Plaza shopping malls across 10 cities in the province, according to Wanda.
Yet the centrepiece will be the company’s signature Wanda City complex, which will involve about 50bn yuan in investments in the city that is home to nation’s treasured Terracotta Army. Besides in Xi’an and Changsha, Wang opened two Wanda City projects this year in Hefei and Nanchang. The tycoon also plans to open five of the complexes overseas.
It is the latest front in Mr Wang’s intention to corner his country’s booming tourism and theme park businesses via a strategy of pure speed and scale. When asked about Disney’s Shanghai Disney Resort in May, Mr Wang – China’s richest man – 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.”
Mr Wang has since softened his public stance towards the foreign competition – if not his intention to eventually smother it out of China. More recently he has emphasised that Wanda and Disney are friendly partners in some areas and fierce rivals in others. Mr 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 this year in Hefei and Nanchang. It 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 two 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 per cent 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 visit to Hollywood in October, Mr Wang unveiled a generous 40 per cent production incentive to try to lure US productions to his studio.
Dalian Wanda Group began with – and its core business remains – property development. Mr 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 $3.4bn project in France.
But the company’s most eye-catching overseas moves have been in the film exhibition and production business. A $2.6bn buyout of the American cinema circuit AMC Entertainment put the company on the map in 2012.
On Tuesday, Wanda-controlled AMC was granted shareholder approval for a $1.2bn takeover of Carmike Cinemas. Once combined – a review of the deal by the US department of justice is expected to conclude this year – the company will be the biggest movie theatre group in the world by far.
Its movie exhibition position secured, Wanda has been snapping up entities on the production end of the film value chain with equal aggression. The company bought Legendary Entertainment for $3.5bn in cash in January. A $1bn deal for Dick Clark Productions, the owner of the Golden Globes awards show and a TV production business, was announced two weeks ago. Last month, Mr Wang said he planned to set up a major fund to invest billions into films produced by all of the big six Hollywood studios.
* Bloomberg
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