Disneyland beware: Chinese property developer Wanda invests US$577m in record deal to 'reshape' tourism industry
China’s Dalian Wanda Group, the country’s largest real estate developer, has made a 3.58 billion yuan (US$576.8 million) investment in online travel service platform Ly.com as it seeks out new revenue streams and eyes a shake-up of China's tourism industry, it said Friday.
This is part of a larger investment in Ly.com featuring other players, including a unit of China’s Tencent Holdings and Citic Capital, estimated at 6 billion yuan.
That would make it the largest investment in an online travel company ever made in China.
“The latest investment is being carried out in line with the ‘Internet Plus’ strategy, as Wanda bids to transform [China's] tourism industry," said Wang Jianlin, the group’s chairman, at a launch event in Beijing.
Premier Li Keqiang has made the 'Internet Plus' buzzword a centrepiece of his economic policy. It has since become a common theme picked up by many IT companies in China.
This is the group’s first investment in on online travel agency, said Wang, who along with Alibaba founder Jack Ma ranks as one of the richest men in China.
“We aim to build the world's first online to offline model in the tourism industry, accelerate the fulfilment of Wanda's tourism-related targets, and contribute to the transformation and upgrading of China's tourism industry," he added.
Wanda is now either operating or about to launch a dozen large-scale cultural and tourism projects in China, including water-themed amusement parks and indoor skiing venues. It said it will invest in eight more projects by 2020.
The group anticipates that its portfolio of attractions will attract 200 million people a year by that deadline.
California-based Disneyland Park, formerly known as Disneyland, currently ranks as the world’s most-visited tourist attraction, but Wanda aims to have its attractions claim the coveted title by 2020, Wang said.
Disneyland received 132.5 million visitors in 2013, according to a report by economic planning consultancy Aecom.
Founded in 2004, Ly.com, which is headquartered in Suzhou, a tourist hot spot in Jiangsu province close to Shanghai, helped 30 million people reserve tickets for scenic spots in China last year, it said.
Wanda said its strategic cooperation with Ly.com will help open up online channels to reach more customers.
Ly.com is also expected to gain access to vast travel destination resources, as Wanda Travel Agency ranks as one of the largest travel agencies in China.
It has recently seen annual income growth of 50 per cent, it reported.
The latest deal should lead to improved user experience and trigger more investment in online and mobile access to the tourism industry, said Ly.com CEO and founder Wu Zhixiang.
Chinese tourists undertook more than 3.6 billion individual and group tours in China last year, according to official data.
The country is also experiencing an outbound tourism boom, with over 100 million package tours made overseas in 2013.
In May, Chinese travel website Tuniu raised US$800 million from Chinese e-commerce giant JD.com and American venture capital firm Sequoia Capital to expand its offline service centres. Tuniu mostly sells group and individual package tours.