Beijing, China — Following is the full text of Dalian-Wanda Group Chairman Wan Jinalin’s remarks at the China (Sichuan) International Tourism Investment Conference held at Chengdu on July 23. He announced Wanda’s intentions of achieving 200 million visitors to its tourism projects and more than RMB100 billion in annual tourism revenue by the year 2020, with the goal of overtaking Disney and becoming the world’s largest tourism enterprise.
Firstly, my congratulations to the success of the inaugural China (Sichuan) International Tourism Investment Conference. I have attended many conferences but this is the first time I am attending one that is dedicated to tourism investment. The subject of my speech today is Wanda’s tourism development strategy and it focuses on four points:
I. Objectives of Wanda’s tourism development plan
As you know, Wanda’s transformation is at full swing and we had set our sights on achieving full transformation by the year 2020. However, this year, our Board of Directors decided to bring the date forward to the year 2018. By the year 2018, the two core indicators of service revenue and net profit shall account for more than two thirds of the Group’s total revenue and net profit, and four pillar sectors, namely Wanda Commercial, Wanda Cultural Industry Group, Wanda Financial Group and Wanda E-commerce, shall take shape at Wanda Group.
Wanda Cultural Industry Group has established four holding companies in film, tourism, sports and children entertainment, respectively, this year. The film holding company integrates all of Wanda’s film production and distribution and cinema operations and it will officially receive a business license soon. It can be said to have the greatest dominance in the Chinese film industry as few players in the industry have film production and distribution and cinema operations concurrently. The tourism holding company represents one of the key pillar industries that Wanda is focusing on. A report by World Leisure Organization best illustrates the situation. Headquartered in New York, the World Leisure Organization has close to twenty thousand members worldwide and they include travel agencies, design companies and construction companies. The Organization has five senior members and Wanda is its only senior member in Asia Pacific. Senior members need to be approved by a unanimous vote by the Organization’s Board of Directors. Three of the senior members are from the United States and they include Disney and Universal Studios. The remaining senior member is European company Merlin Entertainments which is well-known for its Legoland theme parks and Madame Tussauds wax museums. Wanda is the only senior member in Asia Pacific and this is indicative of its position in the global tourism industry.
In the report by World Leisure Organization, Disney was the world’s largest tourism company in the year 2014 with nearly 130 million visitors. Shanghai Disneyland is slated to open next year and its annual visitorship is expected to reach 20 million. As such, we predict Disneyland visitorship will reach 150-160 million by the year 2020. With this in mind, Wanda has set the strategic goal of 200 million in visitorship and more than RMB100 billion in annual tourism revenue by the year 2020, so as to overtake Disney and become the world’s largest tourism enterprise. The reason for setting such an ambitious goal is that the goal of Wanda Group is to achieve US$200 billion in assets, US$200 billion in market capitalization, US$100 billion in revenue and US$10 billion in net profit by the year 2020 and tourism is one of our important development directions.
II. Building world-class tourist destinations
How will Wanda achieve its goal of 200 million in visitorship and RMB100 million in tourism revenue? Innovation will be the core. We are not adopting the traditional tourism model. Instead, we are putting our best efforts to create an innovative model in the world – jumbo-size integrated “cities” for cultural tourism that we call Wanda Cultural Tourism Cities (or “Wanda Cities”). There are now ten Wanda City projects in China, and three of them, namely the White Mountain Resort, Wuhan Central Cultural District and Xishuangbanna Resort, are in operation, while the remain seven are undergoing construction.
So what is innovative about Wanda Cities? Firstly, we analyze China’s climate. China’s climate characteristics determine that there are limited places in the country where one can engage in outdoor entertainment all year round. With the exception of Xishuangbanna and Sanya, most regions in China are restricted by winter and the rainy season, and year-round outdoor tourism is difficult in these regions. As such, indoor entertainment is a core aspect of Wanda Cities. Each Wanda City has a large building that can be even bigger than Beijing T3 Airport. They are generally greater than 500 meters in length and have a width of over 300 meters, housing various attractions. They each have a large outdoor theme park as well. All Wanda Cities offer innovative and top-notch performances, as well as hotel complexes. Wanda has its beginnings in commercial operations and all Wanda Cities have large commercial centers and hospitals. The one in Xishuangbanna, for example, has a Grade A Class 3 hospital with 500 beds. We invested more than RMB1 billion to build the hospital which was given to the Yunnan Provincial People’s Hospital upon construction for its management. It is now the best hospital in Yunnan.
I shall now give a brief introduction of the Chengdu Wanda Cultural Tourism City. Construction of the city will begin in the near future. The people of Chengdu are fond of snow and many of them go to other places to ski. Hence, we decided to innovate and began planning of the construction of a fourth-generation indoor ski slope in Chengdu, as well as the world’s only horror theme park. A movie theme park that incorporates the picturesque mountain views of Sichuan, as well as a large shopping center, restaurants and a large outdoor theme park are also part of the plan. We are planning innovative programs that combine the characteristics of Sichuan culture, Taoism culture and Qingcheng Mountain. We are also building high-end hotels, a professional folk music bar and a variety of music bars and pubs so that people can enjoy the programs offered in the evening. According to our plan, three Wanda Cities are in operation and the Hefei Wanda City and Nanchang Wanda City will be opened next year. Going forward, approximately three to four Wanda Cities will be opened annually. By the year 2020, there will be at least 15 Wanda Cities in operation in China. Annual visitorship of each Wanda City is approximately 10 million. It is more than 30 million for bigger cities such as the Wuhan Central Cultural District. The collective visitorship of all 15 Wanda Cities is expected to achieve the target of 200 million.
III. Establishing a comprehensive industrial chain
With destinations in place, will visitors naturally come?
We are in the era of information explosion and there are far too many channels of information. As such, one has to peddle one’s wares no matter how good they are. The era of “gems are uncovered no matter how deep they are buried” is over. As such, we made endeavors to establish an industrial chain after building tourism destinations.
Firstly, we founded the only cultural tourism planning institute in China a few years ago. What is the biggest issue that needs to be addressed to engage in cultural tourism? Cultural tourism, especially modern cultural tourism, is not about sightseeing and taking in sceneries. It is not “traveling from a place that you are tired of to another place that someone else is tired of”, as some would put it. It requires something that is innovative. This requires creativity first and foremost. Where does creativity come from? From talented people. Wanda Cultural Tourism Planning & Research Institute has more than 300 employees. More than half of them are foreigners and most are world-class masters. Take for example Mr. Mark Fisher who was the chief architect of our Wuhan “Han Show”. A legendary set designer in the world, he was the foreign chief designer of the opening and closing ceremonies for the Beijing Olympic Games and the chief designer of the Asian Games in Guangzhou and the London Olympic opening and closing ceremonies. Our chief special effects engineer has won four Oscars for Best Visual Effects.
Wanda acquired more than a dozen major domestic travel agencies in the past three years through capital operation. We are now the largest travel agency in China. Our travel agency revenue is expected to exceed RMB10 billion this year and breach the RMB20-billion mark over the next two years. It is set to reach RMB40 billion by the year 2020.
The Internet is also very important in the information age. A such, we invested in LY.com a fortnight ago, thereby forming a comprehensive travel industrial chain that encompasses creativity, offline travel agencies, online channels and tourist destinations. We also have our own hotels in tourist cities. If Wanda’s travel industrial chain can be said to be still lacking, then we do not rule out the possibility of Wanda making its foray into the aviation industry in the future. Presently, accessibility is not an issue when it comes to tourism in major Chinese cities but transportation supply fails to meet demand in places such as Xishuangbanna and Changbaishan. There are five flights plying the Beijing-Changbaishan route daily and the tickets for such flights are at full price. One can only secure a ticket by making bookings 20 to 30 days in advance. There is demand but not enough supply. Changbaishan Airport has also set a record with full price tickets during summer vacation and for ski trips in winter. Based on our experience and goals, one needs to command pricing power and have a “closed-loop” industrial chain in order to achieve the best efficiency in the tourism industry.
IV. Internationalization strategy
The ultimate goal of Wanda’s internationalization strategy for its tourism business is to become a leader in the global tourism industry. This means growth beyond China. We will definitely have to venture overseas to become an international enterprise. As such, we mainly carried out two things. Firstly, we are building high-end luxury hotels overseas under the China brand. Seven hotels are under construction and they are in major cities of major countries in the world. For example, we are building one in London which is beside the River Thames and a stone’s throw away from the Buckingham Palace and Hyde Park. At 200 meters, it is the tallest building by the River Thames and one can have a view of the Buckingham Palace and Hyde Park from the hotel. Our hotel in Madrid is also the tallest in the city at a height of 117 meters and it is located at the center of the city. In Australia, which is a renowned tourist destination in the world, we have built landmarks at core districts in Sydney and the Gold Coast. We also built landmarks at landmark locations in Chicago and Los Angeles and all of them use the Wanda Vista brand.
Despite its accomplishments in terms of atomic bombs, missiles and satellites, China has yet to have its own high-end hotel brand. Mr. Shao Qiwei, former director of China’s National Tourism Administration, told me on two occasions that Wanda should take the lead to build China’s first high-end hotel management brand. He said that Wanda opened more than a dozen hotels annually and no other Chinese enterprise would have the courage to build a high-end hotel brand if Wanda did not have the courage to do so. Hence, we held many internal meetings at Wanda and despite the objections of the majority, I insisted that we set up our own hotel management company. Today, we are seeing some early results and we have an outstanding standard of hotel management in the country. After the hotel industry headed into the doldrums in 2014, foreign-managed hotels that managed our hotels failed to meet their goals while our hotels that we managed ourselves all met our goals. Secondly, we have embarked on the acquisition of tourism companies and attractions overseas and we do not rule out building large tourism projects overseas.
As a private enterprise in China, Wanda is expected to achieve assets of more than US$100 billion and annual revenue of nearly US$50 billion this year. We may be doing everything on a large scale but we continue to put in efforts and chase our dreams. Everyone including me is working very hard every day, clocking more than ten working hours daily. Why do we do this? It is because we are driven by our dream. And what is our dream? It is to make Wanda a top-notch super enterprise in the world and our tourism holding company will be a strong force propelling us towards this goal.