China’s theme parks
face a new era
by Guang Chen, Zi Chen, Steve Saxon, and Jackey Yu
October 20221. China’s theme park
market overviewChina is now the second largest market for theme parks in the world, and this pace of growth is set to
continue—even in the pandemic, the country’s attraction industry continued to evolve, expand, and hold
its global position.^1 Chinese consumers have embraced theme parks with enthusiasm, and operators are
investing heavily with a raft of new attractions planned. The increased competition poses challenges, and
opportunities, for operators to provide new product offerings that can enhance visitors’ on-site and off-
site experiences. This report examines such opportunities for both greenfield developments and existing
destinations.
China’s theme parks have transformed considerably over the past few decades through three distinct
waves: inception, proliferation, and transformation. China’s first theme park, Splendid China, opened in
1989 in Shenzhen and quickly became popular. The new experience that theme parks offer drew visitors
and boosted the market. This initial success led to proliferation from 1996 onwards, with hundreds of
local players tapping into a rapidly growing market, resulting in differentiation and diversification. Some
operators provided a dedicated product offering centered around strong intellectual property (IP) and
distinct branding. Others focused on expanding their real estate portfolios where theme parks were only
one element within a property complex, and the focus was on standardized products that could be quickly
replicated.
Following Disneyland’s Shanghai opening in 2016, the industry entered the current wave of transformation.
Policies have tightened to prevent property bubbles from developing, and international players with strong
IP have upped the game to compete for visitors. By the end of 2021, three new international theme parks
had opened in China including Disneyland Shanghai and Hong Kong, and Universal Studios Beijing.
Despite this growth and clear visitor interest, some theme parks face challenges. Even before COVID-
19-related restrictions, only half of the country’s parks turned a profit.^2 During the pandemic, theme park
attendance declined globally, in some regions by up to 80 percent. Theme parks had to comply with
attendance caps, limits on individual rides, and a ban on indoor performances. Some theme parks shut
down and those that remained open saw sudden, sharp drops in visitor numbers.
In China, there is still a lot of uncertainty related to the pandemic and operators have had to take an agile
approach in response to restrictions by temporarily closing certain facilities or parks, and working hard
to ensure that offerings remain attractive so that visitors return once they reopen. Parks in Shanghai and
Beijing closed for a few months, but visitor numbers rebounded quickly after reopening—in part due to
pent up demand for on-site experiences following lockdowns. Some theme parks hosted events to boost
numbers, for instance Happy Valley Beijing held a summer holiday festival in 2022, including traditional
cultural activities and exhibitions in the day, and a music festival during the night, which increased revenue
by 25 percent, year-on-year, this summer.
However, some operators are still under pressure to make up lost revenues. In Tier 2 and 3 cities, frequent
closures have affected consumer confidence, and many are avoiding large crowds, so some operators are
finding it a struggle to maintain foot traffic. Fantawild, with theme parks in lower-tier cities, reports that in
the first half of 2022 revenue from theme park operations had dropped by over 40 percent, compared to the
same period in 2021.^3
Given the highly competitive environment, volatility due to COVID-19, and the fact that visitors are looking
for new experiences after lockdowns, operators may have work to do to capture market share. But the good
news is that there is still enormous potential in the market. McKinsey analysis suggests that only 27 percent
of China’s population has ever visited a theme park, less than half the average for developed markets, at 68
1 Euromonitor data; “TEA/AECOM 2020 Theme Index and Museum Index: Global Attractions Attendance Report,” Themed Entertainment Association
(TEA) and AECOM.
2 “53% of projects are profitable: Have China’s theme parks solved the business dilemma?,” Beijing Business Daily, November 25, 2019.
3 Fantawild semi-annual report.
1China’s theme parks face a new erapercent. And the market size could more than double from RMB40 billion in 2019, to over RMB90 billion by
the end of 2025.
Despite pressure from leading international operators such as Legoland, Universal Studios, and Disneyland,
local operators such as Happy Valley, Fantawild, and Chimelong are likely to draw more visitors than
international brands. Leading local operators attract the majority of visitors thanks to the sheer size of their
portfolios, number of chains, and their broad geographical coverage. In 2019, 81 percent of visitors chose
local operators. It is expected that by 2025, local theme parks will serve around 70 to 75 percent of visitors.
Trends affecting China’s theme parks
With a growing and increasingly urban middle class, theme parks will likely have a bright future. Operators
can consider the following three trends that are shaping visitor expectations:
New experiences can draw repeat customers
During COVID-19, trips around hometown cities became the first choice for leisure travel. A McKinsey survey
of Chinese tourist attitudes revealed that nearly half of consumers said their first choice for travel would be
a short trip to a new destination. And over 80 percent of consumers said they preferred short breaks of one
or two nights.
Operators can stay relevant by updating their offering regularly, and integrating entertainment and events,
to provide repeat visitors with new experiences. For instance, the Disney characters dressed in traditional
Chinese Hanfu attire to celebrate the Spring Festival in Shanghai soon captured visitors’ attention and
became a trending topic on social media, gaining over 20 million views on TikTok. And when Chengdu Happy
Valley launched its Dunhuang-themed event, cosplayers and influencers arrived in Bodhisattva and Feitian
costumes, creating a hype on social media with over 1.5 million views on TikTok.
Digitization enhances theme park experiences
Consumers are increasingly looking for interactive and immersive storytelling experiences, not just
rides. Operators are now introducing wearable devices and augmented reality (AR) or virtual reality (VR)
technology to elevate the in-park experience. Super Nintendo World at Universal Studios in Japan allows
guests to play video games in real life, throughout the park. Players wear tracking devices and collect coins
with interactive coin blocks and mini-games throughout the area, and can check their real-time ranking via
mobile app.
Social media experiences promote engagement
There is rising interest in experiences that are tailored to social media, making it easy for visitors to post their
experiences online. And consumers are inspired by the influencers they follow to travel or visit attractions.
COVID-19 pushed people to spend more time online—now short-form videos and livestreaming have
become the top online entertainment options. These categories have seen exponential growth, and in the
first half of 2022 short videos accounted for 30 percent of mobile internet use time in China.10
As a result, theme park operators are doubling down on social content. When Disneyland Shanghai
premiered LinaBell through a promotional video and influencer/ce