Tottering theme parks may find new life in corporate venture capital, largely for knowledge-transfer reasons. And while it may be too early to identify a trend, we are intrigued by the announcement that China’s Fuson Group will be buying a minority stake of the Dutch-themed Huis Ten Bosch park in Nagasaki, Japan.
Details of the transaction have yet to be announced publicly. But the arrangement appears to call for a 25% share in the Japanese amusement complex. The longstanding destination in southwestern Japan is now owned entirely by H.I.S., a Tokyo Stock Exchange-listed firm. The Japanese company is credited with turning around the park financially; Huis Ten Bosch declared bankruptcy in 2003. One new feature is a robot-operated hotel.
Shanghai-based Fosun may be best known in the entertainment world for its purchase of a chunky piece of Cirque du Soleil. The move was an early stepping stone in its desire to be master of the still-crude Chinese theme-park industry. The Huis Ten Bosch investment parallels that effort. The long-term strategy is to build, if not rethink the design of, expansive leisure complexes in China. We should expect to see other bolt-on, boutique acquisitions by this cash-rich corporation.
The dark side of this story is that US-based theme parks may be missing out on investment opportunities by Chinese firms. The lingering trade war between Washington and Beijing is likely taking its toll on the US leisure sector. We note that Chinese tourists now dominate the international travel business. Second-tier theme parks near major American cities could be lucrative targets. Until the political backdrop is more stable, however, Chinese capital will likely be deflected elsewhere.
Industry insiders acknowledge that the Chinese theme-park business is set to smolder for the foreseeable future, despite conventional wisdom on soaring growth. Dalian Wanda, another corporate behemoth, all but abandoned its expectations in this industry last year by selling off its theme-park assets. And while many analysts are looking for smoke signals from Shanghai Disney Resort, that campfire is still being kindled. ■
Our Vantage Point: Multinationals may look to bolster their entertainment-industry acumen by buying into the theme-park business. The move has less to do with generating cash from operations and more to do with knowledge-transfer possibilities.
Learn more at the Nikkei Asian Review
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Image: Huis Ten Bosch builds on 400 years of trading ties between the Netherlands and Japan. Credit: H.I.S., Co. Ltd.