$5.5 Bil Shanghai Disney Resort Greets Visitors With 2-Hour Queues

Tourists in mainland China will now be able to explore Fantasyland, get photographed with Mickey Mouse and ride Dumbo the Flying Elephant at the new Shanghai Disney Resort, which has its grand opening this week. Visitors are already reporting massive queues and jostling crowds at the $5.5 billion entertainment project, Walt Disney & Co.’s fourth outside the United States, after Tokyo, Paris, and Hong Kong.

The resort, which Disney bills as its largest-ever overseas investment, features a Disneyland theme park, two hotels, and a plethora of rides and attractions aimed at China’s burgeoning market for tourism and entertainment. A 1,200-seat theater will host Mandarin-language productions of Broadway hits like “The Lion King,” which was performed during a three-day opening celebration that kicked off on Tuesday. Trial operation of the theme park started early last month.

Long Lines Greet Pre-Opening Guests

Even during the preopening stage, however, guests complained of long waits for the most popular attractions. “The park was brilliant,” said Colin, a Shanghai-based expatriate who visited the park with his family last week. “But we had to wait nearly two hours for rides we wanted.”

Some, however, see the line-ups as part of the cultural experience at the carefully organised them park. “Disney Shanghai is many things to many people, but one undeniable public service, is that an entire generation of Chinese will learn to stand in line,” said one commentator on the popular WeChat online platform.

The Chinese government signed off on the project in 2009, and construction on the 3.9 square kilometre site in Shanghai’s Pudong District began in 2011. Local authorities paved the way by clearing land, relocating residents, and building subway and highway connections. Disney’s local partner, state-owned Shanghai Shendi Group, owns a 57% stake in the project.

Anticipation of the resort’s opening drove price growth in apartments nearby, with a new residential complex developed by China Vanke in Pudong’s Zhangjiang area seeing a 35% jump in selling prices in the year through May 2016.

Disney Deals with Competition, Regulation

Disney is resting its hopes on the 330 million “income qualified” people who live within three hours of the park by car or train, but luring them will be tougher in the face of rising domestic competition. Wang Jianlin, chairman of Dalian Wanda Group, scoffed in a recent interview on CCTV that Disney’s park would not be able to make a profit for at least 20 years. Wanda just launched its own theme park, Nanchang Wanda City, in southern China at the end of May, the latest in a series of 20 such projects planned by 2020.

Disney also has to contend with tight controls on media companies in China, limiting its ability to sell media content such as the Disney Channel (which is barred in the country). For the time being, the California-based firm will have to focus on the Shanghai resort, in addition to its chain of Disney English schools, for revenue in China. The initial signs are promising, with up to 90,000 people flocking to the park daily even before its official launch.

And despite Disney’s careful efforts to blend elements from Chinese culture into its “authentically Disney, distinctly Chinese destination,” the company seems encouraged to find that local consumers have taken to American cuisine. “What we’ve found on food has been surprising,” Disney CEO Robert Iger said in an interview last week, referring to the park’s F&B offerings. “We expected Western food would be about 10 percent of demand. It’s running double that – hamburgers, pizza, turkey legs, corn dogs. That’s something you can’t possibly know going in.”