Prolonged Wait Pays Off For Universal Studios With Beijing Nod
My award this year for the world’s most patient company goes to Universal Studios, which has just received the official green light to build one of its trademark theme parks in Beijing after more than a decade of perseverance. I’ll admit I’m writing about this particular story partly for sentimental reasons, since Universal Parks & Resorts first announced its plans to build theme parks in Shanghai and Beijing shortly after I first arrived in Asia in 2002. Now some 12 years later, China’s powerful state planner has reportedly finally given the green light for such a park to be built in Beijing, in an investment totaling more than 20 billion yuan ($3.2 billion).
Word of the park’s approval comes amid a broader building boom for similar theme parks in China, being driven by demand for top-rate entertainment from a new generation of upwardly-mobile Chinese tourists. Industry watchers will also note that the new park’s approval by the National Development and Reform Commission (NDRC) comes as Shanghai prepares to open the mainland’s first Disneyland (NYSE: DIS) next year. Shanghai earlier this year also announced plans to build a $2.4 billion entertainment village anchored by US entertainment giant DreamWorks Animation (NYSE: DWA), leading me to suspect this new approval for a Universal Studios in Beijing was probably spurred at least partly by civic rivalry between China’s 2 largest cities.
I’ll return to the 2 Shanghai mega-projects shortly, but for now the spotlight certainly belongs to Universal Studios, which needs to be commended for its incredible perseverance in getting approval for a China park. According to the latest reports, the new Beijing complex will include not only one of the company’s signature Hollywood-themed parks, but also a Chinese edition of its retail and dining concept Universal CityWalk located on a 300-acre land parcel in Beijing’s suburbs. (English article; Chinese article) The complex will also feature a first-ever Universal-themed resort hotel.
On the financial side, Universal, a unit of Comcast NBC Universal, will develop the complex with 4 local companies that formed a partnership, Beijing Shouhuan Cultural Tourism Investment Co, to hold their share of the project. The complex itself is expected to open in 2019, or 4 years after Disneyland’s opening in Shanghai. Like Disneyland, the Universal Studios complex will include additional land for future expansions that could see it eventually encompass up to 400 acres. The park would join other Asia-based Universal Studios parks in Singapore and Osaka.
I’ll be frank and say I won’t completely believe that this park is moving forward until we start seeing structures being built at the site. That’s because Universal announced similar parks in Beijing and Shanghai 12 years ago, only to see both projects quietly shelved for reasons that were never fully explained. The earlier Beijing park never really went anywhere, but the Shanghai project actually saw early preparation of a specific park area on a suburban site in anticipation of construction.
But then all work came to a halt just a year or two later, and Universal finally announced the project had been scrapped a year or two after that. Just 2 years ago, another report emerged that Universal was working on a deal to open a park in the city of Tianjin, which is just a half hour ride from Beijing by high-speed rail. (previous post) But that plan never went anywhere, and from a strategic standpoint Beijing certainly looks like a better choice due to its central location that makes it easily accessible to far more locals and out of town tourists.
As a longtime observer of this project, I have to say that this time it looks like the park may actually be built. That’s because the official green light from the NDRC is usually the critical final step for this kind of mega-project, which must be approved by the central government. As I’ve said above, I also do suspect that Beijing officials made a strong argument to open the park after seeing Shanghai move quickly ahead with its Disneyland and DreamWorks parks. This kind of civic rivalry ultimately benefits everyone, and at the end of the day should boost regional economies and provide Chinese tourists with a growing crop of world-class entertainment options for their domestic travel.
Bottom line: Universal Studios latest plan for a Beijing theme park is likely to finally get built after several false starts, and could auger a jump in new approvals for world-class entertainment projects in China.
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