Theme Parks Witness Strong Consumption Demands

By Joe Zhang

Universal Beijing Resort（Universal Studios Beijing） opened up officially on September 20. This theme park project was signed off 20 years ago， and project construction has lasted 7 years. Universal Studios Beijing is the worlds fifth， Asias third and the largest Universal Studios theme park globally.

According to Qcc.com， China has about 5，000 theme park companies. During the first 8 months of this year， about 276 companies were newly registered， down by 32.1% from last year. Guangdong features 1，288 registered companies， the largest number of all provinces and followed by Sichuan Province. Shenzhen， Guangzhou and Huizhou are also top 3 cities featuring the largest number of theme parks.

Universal Studios Beijing stimulates investment into surrounding areas

The opening of Universal Studios Beijing is good news for the tourism market during the summer holiday. It also injects great momentum into the cultural and tourism market which is recovering from the COVID-19 pandemic.

As a studio entertainment themed park enjoying equal popularity with Disneyland， Universal Studios Beijing features popular IPs like “Harry Potter”， “Minions”，“Transformers”， and “Jurassic World”. Excited fans represent increasing consumption demands. It is currently very difficult to buy a ticket， as the theme park has become extremely popular. The high price of tickets in the scalper market is only one example of the popularity of the park.

As early as 2020， China Securities made a forecast that Universal Studios Beijing would attract a total of 15-20 million tourists each year after opening up to the public. Average expenditure for each person was estimated to surpass RMB 1，500 and the annual turnover was estimated to reach RMB 25-30 billion. In addition， Universal Studios Beijing will also increase the number of tourists visiting restaurants， hotels and taking part in tourist shopping in Beijing by about 15%， and the annual incremental GDP as a result of the park will be about RMB 65 billion. The total revenue including the themed park will reach RMB 100 billion.

As branch a company of Universal Pictures， Universal Studios features rich IP resources. Besides selfowned IPs， Universal Studios also purchased content from other companies. In addition， Universal Pictures also designed its themed parks in different countries by incorporating local cultural elements. Universal Studios has extended its business from upper chain to lower chain of the market， from marketing channels to consumption， and created a large cultural and entertainment business layout.

According to the Survey Report on World Themed Parks issued by AECOM， the Universal Pictures Group has seen the number of its received customers rising from 2011 to 2019， ranking fourth in the world in 2019.

According to Wang Songsheng， Deputy Director of Tongzhou Cultural Tourism Zone Management Committee， phase I of Universal Studios Beijing is expected to receive between 12 million and 15 million visitors per year. The annual sales will reach at least RMB 500 million， if calculated by the minimum one-person ticket price of RMB 418. If all projects are put into operation， the annual sales revenue will reach up to RMB 20 billion.

On September 17， Yu Xuezhong， Deputy General Manager of the Beijing Tourism Group， said at the 2021 Beijing Municipal Administration Center Cultural Tourism Industry Summit that Universal Studios Beijing is expected to receive 10-12 million tourists per year， which will directly create a local cultural tourism consumption market of nearly RMB 100 billion.

Dai Bin， President of the China Tourism Academy， said in a recent media interview that according to public data， the supporting investment of the Universal Beijing Resort has reached RMB 53 billion. Calculated by the investment multiplier of 3， the project will stimulate a total investment of RMB 200 billion directly or indirectly. Plus the investment into the themed park， Universal Studios Beijing will lift Beijings GDP by 1.02% each year. According to Dai Bin， Universal Studios Beijing will increase Beijings tourism revenue by 4.8% each year after opening up.

Chinas themed park industry revenue will reach USD 13.8 billion

According to international analy sis institution Research and Markets， Chinas themed park market scale（by sales revenue） reached USD 8.5 billion in 2020. It is estimated the CAGR during 2020 and 2027 will reach 7.2%， and the market scale is expected to reach USD 13.8 billion in 2027.

According to Qcc.com， there are currently 5000 theme park-or park-related enterprises in China， and the registration of related enterprises has shown an increasing trend in the recent decade. The number of registered enterprises was small in the year before 2015， and it exceeded 900 for the first time in 2016. During 2017 and 2019， each year saw more than 1，000 newly-registered enterprises， with the year 2017 featuring 1，075 registered enterprises， the largest of the three years and up by 12.3% from the previous year.

From January to August， 2021， there were 276 newly-registered theme park-and park-related enterprises in China， down by 44.2% from the previous year. According the data of registration in the first 8 months， the registration volume of theme parks and parks in China will show a downward trend this year.

With the rapid growth of Chinas economy in recent years， the theme park industry has also seen huge development momentum. In terms of regional distribution， the theme parks are mainly concentrated in the Pearl River Delta with Guangzhou and Shenzhen as the center， the Yangtze River Delta with Shanghai and Suzhou as the center and the Bohai Sea ring area. Large-scale theme parks can also be seen regularly in first-tier cities of central and western China， including Changsha， Wuhan and Chengdu.

In terms of regional distribution， data from Qcc.com shows that Guangdong Province features 1，288 theme park-related enterprises， ranking first in China. Sichuan Province ranks second， with 325 theme park related enterprises. Anhui Province ranks third， with 298 theme park-related enterprises.

In terms of city distribution， data from Qcc.com shows that Chinas themed park related enterprises are mainly distributed in Shenzhen， Guangzhou and Huizhou. Shenzhen features 699 such enterprises， having a long lead in the ranking. Guangzhou and Huizhou rank second and third， with 256 and 157 such enterprises respectively. Xian ranks fourth， with 116 enterprises. Haikou， Hefei and Chengdu and other cities follow the ranking.

There are more theme parks in Chinas south than the north. The opening of Universal Studios Beijing has reshaped the landscape of Chinas tourism industry. Chinas top theme park industry will see a dual player pattern with “Disneyland in the south and Universal Studios in the north”. The tourism market of Chinas north has changed completely as it posses a heavyweight theme park.

In terms of the types of theme parks in China， entertainment/facility-supported theme parks currently take half of the market share. All the types of theme parks， including traditional facility-supported amusement park （like Happy Valley）， scenic spot featuring tourism and performing arts （such as Worldland）， and sea animal theme parks （such as Chimelong， Haichang， etc.）， are transforming towards leisure and vacation business through expanding venues， creating city block scenes， and developing new projects and tourism facilities. Now in the Chinese theme park market， China OCT， Chimelong and Huangqiang Fangte are the top 3 players. The other market shares are mostly taken by Dalian Shengya， Songcheng of the Yangtze River Delta region and Haichang Sea Park.

Theme park competition between domestic and international brands

Since Disneyland opened up its theme park in Shanghai in 2016， international theme park giants including Universal Studios， Six flags， Lego and DreamWorks have been targeting the broad space of Chinas theme park market and accelerating their investments. The entry of foreign players has kindled domestic tourists enthusiasm of consumption， raise peoples acceptance of the high ticket prices of theme parks， and help reduce the dependence of theme parks revenue on ticket price through diversified consumption models. In the future the theme park industry has longterm growth potential. The domestic market competition will focus on contents， IP industrialization and differentiated operation.

With the rise of domestic brand theme parks， local original brands have gradually developed from Panyu Wildlife Park， Windows of the World， OCT， Happy Valley to brand families including Chimelong， Wanda， Haichang and Songcheng. These brand families have occupied important position of Chinas theme park industry and formed a new competition pattern with overseas brands.

At present， theme parks in China are mainly distributed in Beijing， the Yangtze River Delta， the Pearl River Delta and other economically developed regions. The theme park market of first-tier cities has become saturated. Domestic players shall also face competitions from international giants such as Disney and Universal Studios. Theme park operators are expanding their businesses in second-tier and third-tier cities. For example， Huaqiang Fangte have built Fangte park projects in Fuling of Chongqing and Mianyang and Zigong of Sichuan； Haichang Ocean Park， which features marine animals， has opened the Caribbean Sea World and Haichang Polar Ocean Park in Chongqing and Chengdu respectively； Time Warner and DreamWorks will invest RMB 200 billion in Zhuhai to build a theme park； the parent company of Paramount， a Hollywood film and television company， plans to build an animation studio in Foshan with the animation IP of Nick. Most of the above mentioned theme parks are located in second-tier and third-tier cities where the land and operation costs are low. Considering the rising consumption of domestic market， in the future there will be more theme parks in lower-tier cities.

Industry insiders pointed out that with the comprehensive implementation of the second-child policy in China and the relaxation of thirdchild policy at the meeting of State Council in May 2021 means that there will be sufficient customers for theme parks. Family trips frequently include theme parks，with 2-3 times each year or 1-2 times each quarter， which brings great potential for consumption. Family trips also feature high customer loyalty and re-visit rate. Theme parks conform to the characteristics of the family trip and will benefit a lot from more family trips.

In addition， after several rounds of repeated international pandemics mean that the future trend is still unclear. The persistence of strict quarantine policies has forced Chinese tourists to mostly travel at home， which has created a large market for short-trips and travel at home. Tourists who would have traveled outside before the pandemics are now looking for quality opportunities domestically， providing high travel consumption within China. The theme parks have seen a rapid recovery of tourist reception， as they are important destinations for suchtrips. Different from traditional natural sight-seeing travel， shorttrip travel mainly focuses on leisure and relaxation and theme parks are important travel elements for those areas that might lack natural scenic spots.