Disney Shanghai: A Great Hotel Play

By newsdoug on April 9, 2011

Plenty of room for growth at the inn So, what new can I say about Disney’s (NYSE: DIS) official ground-breaking for its Shanghai theme park, a development that caps years of hype about the potential of the China market for the world’s best known theme park operator? The official groundbreaking for the park in Shanghai included some of the first formal financials we’ve seen, including a $3.7 billion price tag for the first phase and Disney’s 43 percent stake in the project. Local construction companies will surely benefit in the park’s construction, but one more overlooked group that’s likely to get a boost are the city’s hotels, especially budget operators that will cater to the droves of out-of-town Chinese who want to see Mickey but don’t want to spend $200 a night for a room at the Inter-Continental or Westin. So who am I talking about? In this case, it would be the usual suspects with strong property portfolios in Shanghai, including Home Inns (Nasdaq: HMIN), Jinjiang Hotels (Shanghai: 600754), China Lodging Group (Nasdaq: HTHT), operator of the Hanting chain, and Motel 168.

Bottom line: Shanghai-focused budget hotel chains will see business boom after Disney opens its new theme park in the city.

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