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Shanghai Disney Resort fuels local hospitality market

08/29/2016| 10:20:18 AM|

Since the two in-house Disney hotels in Shanghai can hardly meet the demand for accommodation, real estate developers are investing heavily in hospitality projects.

Oriental Pearl Real Estate Ltd. announced on Aug 8 that it is investing in a project that will transform 50 blocks of villagers' homes into a bed-and-breakfast village, just 5 km from the Shanghai Disney Resort.

A shuttle bus will link the village and the theme park.

This is the latest example of real estate developers investing heavily in a variety of hospitality projects aimed at providing accommodation and other services to millions of visitors who are expected to throng the Disney destination in the years to come.

The two in-house Disney hotels in Shanghai receive 1,000 tourists per day who spend RMB 2,950 each on average. That is, the two hotels gross around RMB 3 million in daily revenue on average occupancy rate of 95%, higher than the city's average of 70%, according to the Shanghai Tourism Bureau.

That's hardly enough to meet the current and expected demand for accommodation.

A branded budget hotel chain 1.5 km from Disney now charges RMB 700 per night for a room, up about 120% from August 2015. In comparison, the corresponding rate at its sister concern at Lujiazui, Shanghai's financial hub, is about RMB 600 now.

According to the Shanghai Tourism Bureau, Disneyland may attract 15 million tourists per year, among whom 30% need to stay in a hotel. This means, 4.5 million visitors will likely seek to stay at a hotel in the area every year.

However, currently, there are fewer than 20 three-star or above hotels within 10 km of Disney. The hospitality market sales in the area are estimated to increase by more than RMB 100 million every year, according to a report by Shanghai-based RET Real Estate Consultancy Ltd.

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TAGS: Shanghai Disneyland | Disney | Shanghai | China
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