Disney to Pour an Additional $800 Million into Shanghai Theme Park

Walt Disney Company (DIS) is betting big on its prospects in mainland China, after it announced today that it would spend an additional $800 million to expand capacity and increase the number of attractions at its upcoming Shanghai Disney Resort.

Disney’s newest theme park property in China is slated to open by December 2015. The increased investment in the Shanghai resort will allow Disney and its joint venture partner in China, Shanghai Shendi Group, to speed up construction of rides that were originally expected to be operational sometime after the opening date. The total amount invested in the Shanghai Disney Resort will now be some $5.5 billion, up from the previous figure of $4.7 billion.

Under the company’s partnership agreement in the China, the state-owned consortium Shanghai Shendi Group owns 57% of the joint venture to develop the Shanghai Disney Resort. Disney owns the remaining stake. The two parties also said they would split the resort’s investment expenditures in proportion to their ownership stakes.

In a statement released yesterday, a Disney spokesperson said that the company will not use any debt or budget overruns to fund the increased investment. Although the company has not yet disclosed details of where the money will be spent, it is likely that a large part of the new spending will go toward Shanghai Disney’s boat-theme attraction, Pirates of the Caribbean: Battle of the Sunken Treasure.

Industry experts also highlight that, by expanding the Disney Shanghai resort in time for the opening, the company is proving that it has learned from the mistakes made almost a decade ago. In 2005, when the diversified media giant first opened Hong Kong Disneyland, the launch was considered less than a success, mainly due to the limited number of attractions it began with.

Disney’s newest resort, which is being developed in the modern Pudong district of Shanghai, is almost three times the size of the one in Hong Kong, and Disney wants to make sure that most of the attractions are open and operational on opening day, in order to avoid an underwhelming response.

Shares of Disney were down 0.6% yesterday by the close of normal trading. The stock is currently up 0.3% today in pre-market trading.