Six Flags joins theme-park rush in China
Updated: 2014-06-25 07:06
By ELIZABETH WU in New York (China Daily USA)
The Shanghai Disney Resort, the first Disney park in the Chinese mainland, is slated to open at the end of 2015. And sometime in the next decade Disney is going to find it has competition from another US-based company, Six Flags theme parks.
Six Flags Entertainment Corp and Riverside Investment Group Co Ltd, a leading real estate developer in China, announced on Tuesday that it had formed a partnership to build multiple Six Flags-branded theme parks in China over the next decade. Terms of the arrangement were not disclosed. Six Flags could not be reached for comment on the location of the proposed theme parks.
"China is without a question the hottest spot on the planet," said Dennis Speigel, president of International Theme Park Services in Cincinnati, Ohio. "Where there's smoke there's fire."
In the 1990s, according to Speigel, Six Flags'foray into the European market did not work out, but now under different management with President and CEO Jim Reid-Anderson, "Six Flags is spreading global wings," said Speigel, a veteran consultant in the theme park industry for 50 years. "If I were him, I'd do the same."
Speigel said China, the Middle East, specifically the United Arab Emirates and Russia are currently the top three countries for investing in theme parks.
Texas-based Six Flags — with $1.1 billion in revenue and 18 parks across the United States, Mexico and Canada —announced in April it would expand in Dubai.
"Our international expansion strategy is focused on finding the right partners in the right markets, and Riverside Investment Group will be the perfect strategic partner for us in China," said Reid-Anderson.
In addition to Disney's new park in Shanghai, there is the Hong Kong Disneyland. The company has invested $5.5 billion in the Shanghai project, according to the International Business Times.
In 2012, DreamWorks announced plans for a Shanghai Entertainment District, and in 2013 an indoor theme park to be built in a major city in the Yangtze River Delta.
In the past, China's amusement-park business was a "boom and bust" situation and the parks that currently operate in China are not earning a lot of money, Speigel said. The biggest Chinese theme park companies like OCT and Wanda are trying to expand their projects too, he said.
Speigel said 59 theme parks are being planned throughout China by companies, including Warner Bros, Paramount and Sea World. "They can't all really develop, some of them won't happen," he said.
Ian Corydon, an analyst at Los Angeles-based brokerage firm B. Riley & Co, who follows Six Flags, said: "There is room for destination theme parks in China like Disney, but also room for regional theme parks like Six Flags." He added that Six Flags'expansion might not be on the same scale as Disney's.