HONG KONG, China (CNN) -- Walt Disney Co. will delay any plans to build a theme park in Shanghai, to appease authorities in Hong Kong. "In all likelihood, a second park would not open in China until 2010," Irene Chan, head of Disney's communications in Asia, told CNN on Monday.
The media giant is already building the Hong Kong Disneyland funpark, which breaks ground in January 2003 and is slated to open in 2005 or 2006.
"We have been in discussions for a second park in China for some time," Chan said. "But we have priorities and a focus. We have a first park in China already, and we want to make it successful."
A heavy investment
The Hong Kong government has awarded hefty incentives to attract Disney and is investing $2.8 billion in the project itself. Reclamation, landfill and infrastructure work has been under way for three years at the 310 acre site near the airport.
The government based its investment on a projected economic benefit of HK$148 billion ($19 billion) from the project's first phase.
But Disney alarmed Hong Kong officials when it said earlier this year that it has also been in talks to build a park in Shanghai. The company did not sign an exclusivity agreement, meaning it can open more than one theme park in China. (Full story)
Now Disney says it will wait at least eight years, until 2010, before constructing a park in that Chinese boomtown.
"If you look at the time schedule of a park, this is being realistic about it," Chan said.
Hong Kong officials also worried a Shanghai park would compete with the Hong Kong Disneyland for tourists from mainland China.
Hong Kong Chief Executive Tung Chee Hwa reportedly made his case successfully to Disney President Robert Iger during Iger's recent trip to Asia.
Universal gets head start
That means Universal Studios is getting the jump on its rival in mainland China. Universal announced over the weekend that it will build an $870 million theme park in Shanghai that is slated to open in 2006. (Full story)
Universal said it will own 25 percent of the project, with the rest held by its mainland partners, logistics company Waigaoqiao Group and developer Shanghai Jinjiang Co.
Universal is expected to invest less than $100 million of the project's cost and to take a fee for managing the park when it opens.
The company is targeting 8 million visitors a year for the Shanghai park, less than the 5.6 million visitors Hong Kong Disneyland projects. But the Shanghai ticket fees will be lower than those collected in Hong Kong.
Both Universal and Disney say they are exploring further expansion possibilities in China, where the nascent middle class and a population of 1.3 billion may be able to support a handful of theme parks.
"China is such a big country, two Disney parks is always a possibility in the future," Chan said, and possibly even three parks in the long run.
(c)
http://asia.cnn.com/2002/BUSINESS/asia/12/09/hk.disney/index.html
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