Theme park has always been a magnet for urban tourism consumption. The wave of upgrade of China's domestic consumption has once again brought it into the focal point of the market. The fast-growing China market, along with its volume for growth, is attracting world-class operators of theme parks to the country.
In Shanghai, for example, the recent opening of a world-class theme park is seen as a catalyst to the long-term growth of the local tourism market, expected to increase revenue across tourism, hotel and retail sectors over the city. In the ensuing five years, CBRE expects the new theme park:
- To bring an additional demand for hotel rooms by 2.3-2.9 million per year and improve the annual occupancy rate of the total market by 2.8 to 3.2 pts ;
- To add extra revenue for tourism by 6.6 to 8.2 billion RMB per year which come from domestic visitors out of Shanghai;
- To add 2.0 to 2.5 billion RMB of retail sales for the city. However, the amount of consumption spilled over to retail projects across the city differs due to their distance to the theme park and their category of product.
There is a sign of mania for development of theme park over China. CBRE believes that whether one theme park can achieve a sustainable success is attributed to the supply and demand of the market, together with the owner’s capacity of operation. To win over long term, investors should watch for the escalating competition and the risk of failure brought by homogenization and low-quality. Refining the research before investment, strengthening capacity of operation and build a synergy to incorporate companies from upstream and downstream industries will define the success among the fierce competition of theme parks.