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source: zhiku travel

in 2016, at an industry conference, tourism expert wei xiaoan publicly called for "being vigilant against tourism investment bubbles." he criticized with pain and helplessness, "in the past two years, i have watched this investment bubble rise! are these large projects worth tens of billions or hundreds of billions of dollars an investment in tourism, or are they just scams?"

at that time, the real estate market was booming, and developers took advantage of the cultural tourism investment to build cultural tourism towns everywhere, with cultural tourism projects worth billions and tens of billions of yuan blooming everywhere. local governments, cultural tourism companies, and practitioners were all immersed in this "feast", and no one paid attention to the call of an old expert.

in the same year, the dayong ancient city project under the state-owned tourism listed company zhangjiajie (000430.sz) broke ground. this project with a total investment of nearly 2.3 billion yuan is the largest cultural tourism project in zhangjiajie so far. according to the official blueprint, dayong ancient city will reproduce the splendor of dayong (the old name of zhangjiajie city) during the ming and qing dynasties.

the ancient city of dayong after its completion

the main reason for building dayong ancient town was that local leaders at that time took into account that many tourists only visited zhangjiajie for sightseeing and did not stay overnight, which wasted the economic benefits of tourism. dayong ancient town could increase the leisure industry in the old town. during the day, tourists could climb mountains and visit scenic spots, and at night they could go shopping, eat, and watch performances in the old town. this was their ideal future scene.

zhangjiajie, a listed company, is naturally the best candidate to implement this plan. zhangjiajie can raise money from the stock market to solve the capital needs of project investment. to this end, zhangjiajie first issued more than 800 million yuan in stock increases and more than 600 million yuan in convertible bonds (unsuccessful).

in order to build the dayong ancient town, a block in the old city of zhangjiajie was demolished, the residents were relocated, and rows of reinforced concrete antique shops were built. it is planned to introduce tourism performances and high-tech 3d cinemas as the two core business formats, and then attract foreign investment to attract a number of snack shops, cultural and creative stores, etc. this is almost a standard template for an antique cultural tourism town.

dayong ancient city

however, the logic of tourism is that tourism cannot be "standardized". tourists go to experience the characteristics, and only with characteristics can it be attractive. if it is a standardized project, why would tourists come all the way to your place?

around 2016, developers were building cultural tourism towns in various places, all of which were imitations of ancient times, without any characteristics or connotations. near dayong ancient town alone, there are many cultural tourism ancient towns such as xibu street, guyong town, and dayong prefecture town. tourists soon avoided such copy-pasted imitation ancient towns.

in june 2021, two core businesses in dayong ancient town began trial operations. high-tech 3d cinemas are similar to those in other places, and tourists have already experienced them, so they are not uncommon. the cultural and tourism performance "meet dayong" faces strong competition from another tourism listed company, songcheng performance "zhangjiajie eternal love".

as a private enterprise, songcheng performing arts strictly follows the market logic when investing in each tourism project. it clearly knows that tourism performances are supporting popular tourist destinations and it is difficult to attract traffic independently, so most of songcheng performing arts' projects are to take advantage of the traffic of popular tourist destinations. "zhangjiajie eternal love" is located at the entrance of wulingyuan, the core scenic spot of zhangjiajie, and tourists can reach it on foot. and the total investment is only 600 million yuan, which is only a quarter of dayong ancient city, so as to ensure the sustainable operation of the project.

"meet dayong" hopes to attract tourists to the old town of zhangjiajie, more than 30 kilometers away from wulingyuan, through a performance, and preferably stay overnight in dayong ancient town. in zhangjiajie city, two large-scale tourism performances compete with each other, one acts according to market rules, and the other acts according to the good wishes of local leaders. in this way, how can "meet dayong" compete with "zhangjiajie eternal love" for tourists?

dayong ancient city

therefore, tourists have no motivation to go to dayong ancient city. since its trial operation, dayong ancient city has always been faced with sparse passenger flow and difficulty in attracting investment, and the business is depressed and the passenger flow is even sparser, which is a vicious cycle.

the high depreciation and financial costs incurred by the investment of nearly 2.3 billion yuan have become a heavy burden that the listed company zhangjiajie cannot bear. the financial report shows that the operating income of dayong ancient city in 2023 will be 5.2 million yuan, and the net profit will be -249 million yuan. the main source of the 5.2 million yuan in revenue is not the rent of shops, nor the tickets for tourist performances and high-tech 3d cinemas, but parking fees. according to the feasibility analysis disclosed in 2018, after the operation of dayong ancient city, it is expected to generate 500 million yuan in revenue and 180 million yuan in net profit each year. it is a great irony that it can only rely on the income from parking fees now.

zhangjiajie certainly cannot continue to carry this burden, otherwise its status as a listed company will be lost.

on september 19, 2024, zhangjiajie issued an announcement stating that the zhangjiajie intermediate people's court has ruled that dayong ancient city has entered bankruptcy reorganization procedures. if the reorganization fails, dayong ancient city is at risk of being declared bankrupt by the court.

who would be willing to take over such a hot potato? the so-called bankruptcy reorganization is nothing more than separating dayong ancient city from the listed company zhangjiajie system. as for the takeover party, it is most likely to be a local tourism investment group or urban investment group.

in fact, the failure of dayong ancient town is just one of many failed cases of antique towns. nowadays, except for a few antique towns in popular cities with developed economies and dense populations, which can barely maintain their vitality, most of the antique towns in third-, fourth- and fifth-tier cities have almost become empty "ghost towns".

a large amount of tourism investment has been wasted and a large amount of tourism assets are idle, which is shocking. today, the tourism industry has been listed as one of the key areas for the state to revitalize existing assets. tourism expert wei xiaoan had predicted today's situation as early as 2016, so he urged "beware of tourism investment bubbles", but no one paid attention.

are these tourism investment bubbles difficult to avoid? in fact, it is not difficult at all. some mistakes are made knowingly, not because of cognitive problems, but because of the various interests behind them. this is the case with dayong ancient town, and it is also the case with many failed antique cultural tourism towns.