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With Evergande at risk of complete collapse thanks to US$305bn worth of debts, the future of its portfolio of 15 theme parks across China is currently uncertain
Tom Anstey | Planet Attractions | 06 Oct 2021
Evergrande announced plans in 2017 to overtake Disney as a world leader in theme park development Credit: Evergrande Tourism Group
A collection of 15 theme park developments across China originally touted as ones to “surpass Disney” are all facing uncertain futures with parent company Evergrande’s future currently hanging in the balance.
The property giant is best known for its mass housing developments but in recent years it had joined China’s theme park boom in an attempt to dominate the domestic attractions market.
Announced in 2017, Evergrande boldly declared its ambition to overtake Disney as the world’s top theme park operator, with plans for major theme park and waterpark developments across China.
All focusing on elements of Chinese culture, Evergande’s Fairyland projects have been touted to feature cutting-edge rides, high-tech facilities and a range of online entertainment.
Targeting the emerging middle class in second-tier cities in China, each park, which came with a US$7bn (€6bn, £5.15bn) price tag, had a target of 15 million annual visitors with predicted tourism-related revenues of US$3bn (€2.6bn, £2.21bn) a year.
Construction of the parks, most of which are still under development, are scheduled to be completed by 2022. All parks will operate as all-season indoor and outdoor venues.
Game changer?
The Fairytale brand was billed as a game changer by those involved in the mega project – raising the bar for domestic theme parks in China, bringing a quality experience to more cities and emphasising Chinese culture, themes, stories and legends.
Among its tourism projects, Evergrande's marquee is Ocean Flower Island - a major development in the tropical island province of Hainan.
Boasting three major developments – a Fairytale Theme Park, a marine park and a waterpark. It was originally scheduled to open in 2020. According to the group’s most recent annual report, it started taking customers on a trial basis earlier this year, with plans for a full opening “at the end of 2021”.
Overall, Evergande invested a reported US$100bn (€86.6bn, £73.6bn) into its theme park division. In the first half of 2021, the real-estate arm of Evergrande, which includes its theme parks, recorded losses of US$600m (€519.7m, £441.7m).
Government intervention
The eyes of the world are currently on the Chinese government, which could approve a bail out for Evergrande in the form of a debt restructuring or through guarantees. What might save the property giant is that the company is seen as “too big to fail”, with a collapse potentially having disastrous effects on the wider Chinese economy.
The company’s liabilities total about US$305bn (€264.17bn, £224.55bn), including offshore bonds and US$26bn (€22.5bn, £19.14bn) owed to Chinese banks. It also owes money to homebuyers who were sold high-interest investment products at the same time as agreeing to purchase property.
According to a report from Bloomberg, in an attempt to alleviate these massive debts, Evergrande is exploring the prospect of listing the tourism side of its business, including its theme parks, with a sale taking place as early as next year.
While looking at selling its tourism businesses, the company is currently averting bankruptcy by servicing the interest payments on its massive debt by selling valuable assets at unfavourable prices.
Theme park
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