World's Biggest Legoland Adds to China's Amusement Park Glut
While construction of the project began when Chinese tourism was on its rebound post-pandemic and theme park tickets were selling out during major holidays, amusement destinations are now raking in less cash.
The recent three-day Dragon Boat Festival public holiday saw spending per trip go down 2.2% on year to 359 yuan , though the data refers to all travel trips and not just theme parks.
'The number of visitors to major foreign theme parks in China remained flat or rose slightly in 2024, but their revenue from secondary consumption within the parks decreased,' said Lin Huanjie, director of market research organization Institute for Theme Park Studies in China.
Morgan Stanley estimates that the Shanghai Disneyland, the top performing theme park in the country, will see revenue decline from $1.5 billion to $1.4 billion this year, according to a research note.
With theme parks no longer the novelty they once were and newer attractions set to open, the competition for visitors is set to grow fiercer. Warner Bros Discovery Inc. plans to open a Harry Potter studio tour in Shanghai in collaboration with Jinjiang International Group in 2027, while Asia's first Peppa Pig outdoor theme park is expected to open its doors also in Shanghai the same year.
Meanwhile, construction of the Shenzhen Legoland Resort is progressing with no official completion date.
While tourists have continued to visit parks based on foreign intellectual property, such as Disney and Universal Studios, domestic attractions have taken a knock. The number of visitors to large theme parks in China declined in 2024 compared to a year earlier due to economic pressures and volatile weather, according to a report from the institute. Almost a quarter of large theme parks lost money.
Vivian Lian, a theme-park loving housewife from Shanghai, said she will go to the new Legoland only if she can lay her hands on discounted tickets. Among those who feel the pinch of China's slowing economy, she has set strict limits on what she and her daughter can spend on visits to theme parks — a minimal amount on food is fine, while buying souvenirs is out of the question.
'The attendance in China is still quite good. It's just per capita spending isn't quite as high.' Hugh Johnston, chief financial officer at Walt Disney Co., said during an earnings call in May. 'Consumers are tightening their belts a little bit in that particular market.'
In recent years, Disney launched two land themed attractions — Frozen and Zootopia — with an eye on the surging domestic travel demand. Disneyland opened in 2016, with the Burbank, California-based entertainment company owning 43% of the project and the rest held by state-owned consortium Shanghai Shendi Group Co.
For local governments and business partners, the main appeal of investing in theme parks lies in the knock-on effects, such as the boost to business activity and property prices. According to Lin's calculations, every 1 yuan of revenue can generate 12-15 yuan income of relative industry such as hotel, restaurant, transportation in first-tier cities or provincial capitals.
However, the incentive for local governments to open large theme parks is generating concerns about oversupply. Although theme parks do not release their operation data, Lin noted that the revenue of theme parks in China decreased by an average of 15%-20%, compared with 71.84% on-year growth in 2023. Visionland in Liuzhou, Guangxi Province suspended operations in 2024 after seven years. The approval for new large theme parks has been tightened at the national level, Lin said.
Faced with more cost-conscious customers, theme parks are offering promotions to get people through the gates, such as cheaper tickets or discounts on food.
For Jessica Zhang, a Shanghai-based insurance broker, who drove nearly two hours to Legoland with her daughter and husband in early June before its official opening, the experience was enjoyable and she's considering returning. Still, 'it would be better if the tickets were cheaper,' she said.
This article was generated from an automated news agency feed without modifications to text.
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