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Disney Goes to Shanghai

By Rick Munarriz - Updated Apr 6, 2017 at 10:30PM

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The family entertainment giant breaks ground in Shanghai Disneyland.

Mainland China is starting to get its Mickey on.

Disney (NYSE: DIS) broke ground on Shanghai Disneyland this morning, setting the stage for a presence in a financially potent city in the world's most populous nation.

Hong Kong Disneyland got off to a slow start a few years ago, but it should be different this time. The family entertainment giant has learned from its earlier hiccups. The new park is also at a more compelling site.

Shanghai Disneyland will be within a 3-hour drive of 330 million people. Yes, a larger population than the entirety of the United States will be a day trip away. This is also a generally affluent region in China, so paying up for admissions, concessions, and stays at the pair of adjacent hotel resorts won't be a problem when the $3.7 billion attraction opens in 2014. 

Disney has also had time to break in its characters. It's been five years since it struck a deal with Shanda Interactive (Nasdaq: SNDA) to put out Disney online games in China. It has also moved ahead on a much needed expansion at Hong Kong Disneyland to increase the amusement park's brand appeal.

Running a global theme park chain isn't easy, but Disney's not going it alone. A conglomerate of government-owned companies will hold a majority stake in the endeavor and co-manage the park.

Most of the domestic park operators prefer to stay closer to home. Cedar Fair (NYSE: FUN) does have a park in Canada. Six Flags (NYSE: SIX) only kept one park apiece in Canada and Mexico when it sold off its international properties.

Blackstone's (NYSE: BX) Merlin Entertainments has had success growing its Legoland chain globally. There are a couple of overseas parks branded by what is now Comcast's (Nasdaq: CMCSA) majority-owned Universal Studios. However, Disney's parks have historically ranked at the top in terms of annual attendance.

In short, this is a big deal -- even if we'll have to wait another three years or so to see it.

Have you ever been to a Disney park outside of the United States? Share your thoughts in the comment box below.

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Stocks Mentioned

The Walt Disney Company Stock Quote
The Walt Disney Company
$95.92 (-0.71%) $0.69
Comcast Corporation Stock Quote
Comcast Corporation
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The Blackstone Group L.P. Stock Quote
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Cedar Fair, L.P.
$43.51 (0.11%) $0.05
Six Flags Entertainment Corporation Stock Quote
Six Flags Entertainment Corporation
$23.51 (1.64%) $0.38
Shanda Interactive Entertainment Limited Stock Quote
Shanda Interactive Entertainment Limited

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