The Walt Disney Company (NYSE: DIS) has made its first mainland China theme park a reality with the grand opening of Shanghai Disneyland. Costing a grand $5.5 billion, the project included a theme park and hotel complex and joins the company's other international theme parks, Disneyland Paris, Tokyo Disney Resort and Hong Kong Disneyland. Arriving to the point at which the Chinese government was receptive towards the park, however, was not an easy task. In order for the foreign entity to fully back the project in 2009, the Walt Disney Company and its CEO, Robert A. Iger, had to make significant concessions.
All in all, the Chinese government has a 57% stake in the resort and all of its future revenues and owns 30% of the Disney management company that is to run the park. Viewing the act of importing rides, such as Space Mountain, the Jungle Cruise, etc., from the American parks to Shanghai as an act of cultural imperialism, the Chinese government also ensured that 80% of the new park's rides were brand new. Additionally, the Walt Disney Company had to end its long-standing desire for the Disney Channel's presence in China in order to appease the Chinese government. This was an especially painful concession to make, as it went directly against the company's proven-successful strategy of brand building through media. Perhaps Mr. Iger was showing a great deal of prescience when he once claimed that "We're kidding ourselves if we think that we are going to get everything we want," in reference to commencing negotiations with Chinese officials.
The long list of fulfilled demands the Chinese government made only gets longer. This begs the question, why was the the Walt Disney Company willing to give in so much? The prospect that Shanghai Disneyland will be the most visited park in the world, according to some analysts, with at least 15 million and up to 50 million visitors a year may be motivation enough. A market research firm called YouGov reported that 44% of the people it surveyed in China claimed that they planned to visit the brand-new park within its first year and that 80% planned on bringing family members. The fact that more than 330 million people live within a 3-hour train or car ride from the park only adds to the prediction that the actual visitor amount will be closer to higher estimates.
With only one amusement-park competitor, Nanchang Wanda Park, for China's $600 billion dollar tourism industry, the Walt Disney Company certainly looks to benefit from a massive source of revenue with its Chinese endeavour. The park's political backing from home doesn't hurt the project, either, with President Obama declaring that Shanghai Disneyland "captures the promise of [China's and the United States'] bilateral relationship."