Dalian Wanda Cautions Shanghai Disney Resort on Return of Investment

Existing facilities of Dalian Wanda Group may pose a challenge that could make it difficult for Shanghai Disney Resort to turn a profit even in two decades, the conglomerate's Chairman Wang Jianlin said in a program hosted by China Central Television (CCTV).

Wang added that as an outdoor theme park, the Shanghai Disney Resort is vulnerable to the effects of weather, a Global Times report said.

The China Entrepreneur, a Beijing-based magazine, also pointed out the lack of creativity in the resort's business modes and cartoon images.

According to Wang, the resort would lose customers easily unless it adopts a high-price strategy to be able to operate its theme park, which has a total cost of $5.5 billion.

The opening of the Shanghai Disney Resort is scheduled for June 16, as the Walt Disney Co. and Shanghai Shendi Group earlier announced.

Wang added that more than 15 theme parks are owned by Dalian Wanda in China, while Disneyland has only one theme park in Shanghai.

A report by the Financial Times said that Dalian Wanda is shifting its core business as Wang believes that real estate business is on the decline.

In 2012, the property giant's diversification efforts started when it acquired U.S. film-theater chain AMC Entertainment Group for $2.6 billion.

In Sept. 2015, Dalian Wanda opened its $2.5-billion resort in Yunnan Province, with the aim to earn 100 billion yuan ($15.7 billion) in revenue in the next five years.

According to the company, its subsidiary and China's largest cultural enterprise, Wanda Cultural Industry Group, has assets worth 90.3 billion yuan and earned 51.2 billion yuan in revenue in 2015. It has four companies engaged in sectors such as children entertainment and tourism holdings.

The report, however, said that both investors and analysts doubt Wanda when it announced its privatization plan in April, which could help raise money for the company in the short term but could affect its long-term expansion plan.