Wanda challenges Disney Wanda City "fledgling" profit problem to be solved

Wanda Group Chairman Wang Jianlin recently publicly challenged Disney's background may come from Wanda City, which is expanding rapidly. Wanda Group Chairman Wang Jianlin recently publicly challenged Disney's background may come from Wanda City, which is expanding rapidly.

Jianlin, chairman of Wanda Group, recently publicly challenged Disney, perhaps from Wanda City, which is expanding rapidly. Last week, Wanda Group's first large-scale cultural and tourism complex project, also the first project named Wanda City, was officially put into operation in Nanchang. In the future, Wanda City will be built in some cities in China and abroad at the speed of 20 by 2020, which is an important pillar for Wanda to be promoted to the world's largest cultural tourism enterprise. Although Wanda is ambitious, Wanda City is not yet "full-fledged": large investment, long cycle, new brand, etc. are all unsolved problems of Wanda City.

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a few days ago, Wang Jianlin publicly said,"Disney should not come to the mainland, good tigers can't stand wolves, Wanda will make Disney China unable to make profits in the next 10-20 years." Wang Jianlin's "group of wolves" refers to Wanda City, one of the important engines of Wanda transformation.

On Saturday, Nanchang Wanda City, Wanda's first super-large cultural and tourism complex project named Wanda City, officially opened. Wang Jianlin introduced that from Wuhan Central Cultural District and Xishuangbanna International Tourism Center opened before to Nanchang Wanda City, Wanda City is not only a change in name, but also a transformation of business form.

It is understood that Nanchang Wanda City has a total construction area of 4.8 million square meters and a total investment of 40 billion yuan. Project formats include Wanda Mall, large outdoor theme park, indoor theme park, stage show, hotel group, bar street, etc. After opening, Nanchang Wanda City is expected to receive 20 million tourists every year and generate 10 billion yuan of direct income every year.

As Wang Jianlin introduced, after Nanchang Wanda City, Wanda Group's cultural and tourism complex Wanda City will soon be quickly copied to many places. Wang Jianlin further revealed that Hefei Wanda City will be opened in September, Harbin Wanda City in 2017, Qingdao Oriental Film Capital and Guangzhou Wanda City in 2018, and Wuxi Wanda City in 2019. In addition to Wanda City in China, Wang Jianlin revealed that Wanda will also develop abroad. The medium-term goal is to open 15 Wanda Cities in China by 2020 and strive to open 3-5 Wanda Cities abroad.

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addition to what Wang Jianlin calls the "wolf effect," where does Wanda's bottom gas come from? In this regard, the personage inside course of study first introduces, Wanda cultural tourism project idea is, with theater and movie park, amusement park as the center, supporting hotel, commercial street to build Wanda city, each Wanda city project overall investment will usually be more than 10 billion yuan. Secondly, the personage inside course of study thinks that Wanda's advantage lies in opening up the tourism industry chain, and has certain discourse right in destination, channel and tourist source in cultural tourism complex project. For example, in 2013 Wanda successively acquired Hubei New Route International Travel Service and Beijing Ring Wuzhou Travel Agency; in 2015 Wanda announced 3.58 billion yuan of strategic investment in same-trip tourism.

Secondly, the replicability of Wanda City also provides the possibility for the expansion of Wanda Tourism Cultural Complex Project. Although Wanda City has different themes, Wanda City's formats are basically similar, including super-large Wanda Mao, large outdoor theme parks, hotel groups, large-scale stage shows, bar streets and other contents. On the basis of replicability, Wanda develops products with local characteristics in different regions, such as Xishuangbanna International Tourism Center, which runs through Dai customs; Nanchang Wanda City takes blue and white porcelain as the theme, so that tourists have a sense of cultural identity.

Before this, the standardized Wanda Plaza has been successfully replicated all over the country, and Wanda has become familiar with the order-based commercial real estate model, which is one of the keys for Wanda to successfully spread Wanda Plaza nationwide.

Profitability problem to be solved

In the rapid expansion of Wanda City, Wanda how to realize profitability has become the most concerned point in the industry. Although Wang Jianlin has repeatedly said that cultural tourism is a ceiling-free industry, how to find profit points in unlimited play space is the most striking thing in Wanda City. After all, cultural tourism projects are recognized as not only low but also slow return on investment.

Some unnamed industry personage also said, Wanda City investment often tens of billions of yuan, Even if Wanda has abundant capital support, But rely on long return cycle, Low return rate of cultural tourism projects to achieve profitability is more difficult.

In addition, it is widely believed in the industry that the success of Disney theme parks depends on the continuous flow of customers brought by the popular movie IP around the world, and the derivatives developed around IP resources are a gold mine. At this point, Wanda City has not yet formed a truly attractive IP effect. In addition, Wanda's brand strength in cultural tourism complex projects is still difficult to evaluate.

Although the prospects are not optimistic, there are also voices in the industry that if the land price is cheap and equipped with sales properties, it is not a problem to support the source of customers and cash flow, and the low land price cost and sales properties are Wanda's advantages.

Wanda Commercial disclosed the cost of land acquisition in the prospectus disclosed before listing. Among them, from 2011 to 2013, the average land cost of Wanda Commercial Real Estate was only 1821 yuan/square meter, 1171 yuan/square meter and 1096 yuan/square meter respectively. Under the background of rising land price in recent years, the land cost can still decline year by year enough to become Wanda's advantage.

According to public information, each Wanda City is planned to be completed and opened within 3-5 years, which can create 30,000 jobs and pay taxes of more than 500 million yuan annually. The social effect that Wanda City can create also makes Wanda City a hot potato in the eyes of the local government. Therefore, many local governments actively invite Wanda to develop locally, which also gives Wanda bargaining power in the process of acquiring land.

Although Wanda Commercial does not include cultural tourism real estate projects. However, some insiders believe that Wanda will copy the land acquisition mode of commercial real estate to Wanda City project is beyond doubt.

In addition to the advantages of land acquisition, saleable properties in Wanda City are regarded by industry insiders as one of the profit points of the project. At the beginning of the development of Nanchang Wanda City, Wang Jianlin once introduced that about 22 billion yuan of the total investment of 40 billion yuan was used for investment in cultural tourism, and the rest was used for real estate investment of more than 2 million square meters and investment in residential office buildings. "It is impossible for me to recover the cost by cultural tourism in 20 years after buying land. China's financial model (referring to financing cost) does not support this development model, unlike foreign countries with a ten-year financing cost of only 3%-4%. In this case,(funds) can only go through part of sales and part of financing." Wang Jianlin once said so.

Editor: Vivian