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The US and China share one unique trait: an unabashed desire to be No. 1. In Olympic swimming races or taxi app battles, the similarity breeds competitiveness. But in building up new tourism and entertainment options, it can lead to great business.

California-based Disney, in its bid to sustain global dominance as an entertainment brand, designed a theme park that feeds Chinese tourists' own tastes for the superlative. The iconic castle at the center of Shanghai Disneyland stands as the largest and tallest of any Disney property. The highest-grossing musical in Broadway history, The Lion King, makes its Mandarin-language debut within the park, which opened to the public in June. And with a $5.5 billion price tag, Shanghai Disney Resort is the largest foreign investment to date for the company. As Disney CEO Bob Iger put it, “We didn’t just build Disneyland in China. We built China’s Disneyland.”

China's tourists, domestic and international, want the best, and they have the spending power to demand the best. China's tourism industry adds up to $610 billion, and the China National Tourism Administration estimates that investment into the sector will grow to $306 billion by 2020. Chinese outbound tourism also continues to rack up astronomical numbers. In 2015, 47 percent of Chinese who traveled overseas did so for fun, according to PhocusWright's May 2016 report, and when leaving China, leisure travelers spend an average of $2,807. Passenger volume between China and the US is forecast to triple in the next five years, the result of China's growing consumer class, improved US visa policies and the designation of 2016 as the US-China Tourism Year, according to AmCham China's White Paper.

International brands, when trying to capture the domestic market, face increasing competition to deliver their finest and newest offerings, particularly in theme parks and cruise ships. Overseas destinations, such as US cities like Chicago and LA, work to hold on to or bolster their shares of Chinese tourism by establishing more direct flights and developing more Chinese-friendly service on the ground. In wanting to deliver the best possible experience to Chinese tourists, foreign and domestic brands are finding themselves in an increasingly crowded and challenging market. Difficulties can arise in creating the same quality product within China and navigating global threats such as terrorism and currency fluctuations. Additionally, the newest trends in theme parks and cruise lines require massive investments in infrastructure. While the market justifies the expense, the risk remains.

The Chinese government currently supports tourism, as it fits into national priorities to move from a manufacturing economy to a service and consumption-based economy. Premier Li Keqiang, as quoted by Xinhua, said the tourism industry contributed 4.9 percent of China's GDP in 2015. Cruise ships present another key overlap between policy priorities and the tourism industry: If China can capitalize on partnerships with foreign brands, it could become the only Asian country with the technology to manufacture cruise liners, according to Caixin, meeting a goal laid out in the Made in China 2025 plan, which encourages more highly technical manufacturing.

Megacity magic

When Disney selected Orlando, Florida, to be home to its expansive Walt Disney World Resort, the city was a small, swampy spot with good interstate connections and cheap real estate. The arrival of Disney on the outskirts of Shanghai places it alongside one of the world's largest, most dynamic cities, and within three hours of 330 million income-qualified people. Let that sink in – 330 million people is just above the entire population of the US.

Six Flags Entertainment Corp, headquartered in Texas, will enter China using the same tack, building its first theme park in Haiyan, Zhejiang, to tap into the same Shanghai market, then a theme park and water park in Chongqing, Sichuan, to appeal to a local population of 120 million. The Sichuan parks are slated to go live in 2019.

“While China’s population is about four times the size of the United States, there are fewer entertainment options for its citizens,” said John Odum, President of Six Flags International Development Company. Odum also cited the fact that Sichuan is already a huge tourist destination within China thanks to the pandas and year-round pleasant weather.

The Chinese government had previously put a hold on approvals of new theme parks. But the string of new projects set to go live in the next three years shows attitudes have changed. Universal's Beijing-area project was approved last September by China's State Council and the National Development and Reform Commission last year, a 13-year-long negotiation process. During the official signing ceremony, Li Shixiang, Vice Mayor of Beijing, traveled to New York City to meet with Comcast, NBCUniversal and Universal Parks and Resorts executives. The government's willingness to play a role in moving theme park projects forward fits into the pro-tourism stance of Li. The Universal project will go up in Beijing's Tongzhou district, and the total investment of $7.85 billion includes a park, hotel, CityWalk entertainment complex and expansion of subway Line 7. And, in classic American-Chinese grandiosity, the Tongzhou park will be the largest of Universal Studios' six parks worldwide.

Measuring up while building abroad

Foreign entertainment brands benefit from Chinese consumer aversions to local brands, but meeting these expectations while operating in a vastly different environment can be difficult to deliver on.

Disney, when building Shanghai Disney Resort, had to take time to train local construction crews to achieve the same level of quality in construction to the local market.

“Disney has very high and exacting design and quality standards and this is different from typical Chinese construction practices,” said Chris Yoshii, Global Director at Aecom and APAC President of the Themed Entertainment Association. “The pace of construction in China is breathtaking and many projects are quite rushed through the design and construction process. It's not uncommon to start construction of a building or facility in China without fully understanding what goes inside.”

Besides the challenges of recreating the magic of their brands in China, foreign theme parks will increasingly face fierce local competition. Wanda announced an aggressive plan to launch 15 parks across China and overseas in the next five years. Their winning strategy, as proclaimed by Wanda Chairman Wang Jianlin, is cost efficiency: Wanda's Jiangxi park will go up for $2.3 billion less than Disney's nearby resort and will charge guests RMB 198 to Disney's RMB 248. Wang sees power in numbers.

“Disney’s 'magic' is surprisingly hard to replicate. Most would-be Disneys have failed,” said Jeffrey Towson, professor at Peking University’s Guanghua School of Management and author of The One Hour China Book. “However, in China entertainment and large scale real estate are both political. And Wanda is very strong in this. Plus they have a lot of capital and aren’t subject to the boom-bust economics of making movies.”

As the flurry of theme park opening dates continues, Towson said, “When the dust settles, there will be some winners and a lot of losers.”

Royal Caribbean's Ovation of the Seas launches out of Tianjin

Cruises pick up speed

US and European cruise lines eye the Chinese market with the same salivating statistics in mind: From 2012 to 2014, the Chinese cruise market grew by 80 percent, putting it on track to become the second largest market in the world by 2017, according to Cruise Line International Association. The organization's Asia Cruise Trends 2016 Report states, “China is the main driver of passenger growth in Asia, adding 770,000 more cruise travelers since 2012.”

China's ports are about to get more crowded. A decade ago, only one cruise operator had a vessel with 900 cabins. Now, there are 12 operators, 613 vessels and a total of nearly 30,000 cabins. American-British cruise company Carnival, headquartered in Miami, Florida, operates four ships in China, and will add five more to its fleet by 2018. On shore, it will have 16 offices across the country by the close of 2016.

“We can tell from the increase in cruise line numbers that more international cruise lines are now turning to China as their strategy market,” said Liu Zinan, Royal Caribbean's President of China and North Asia Pacific Region. “But we now have eight years of homeport experience to pull from to better tailor our product and market strategy to the local consumer. We keep bringing out “firsts” in the market, which consumers can recognize.”

China's ports continue to expand to fit the influx of luxury cruise ships. Shanghai's Baoshan Port is undergoing phase-two construction that will allow four ships to simultaneously dock, expected to be complete by 2017. Second-tier coastal cities are also developing their ports, with places such as Zhoushan building to become a new homeport. Liu from Royal Caribbean, when asked about overcapacity, says the current infrastructure of East China and North China ports can support current demands, with space to grow.

China is looking to grow its local skills along with the industry, too. The China State Shipbuilding Corp. has launched a joint venture with top Italian shipyard Fincantieri SpA to start building luxury cruise liners in China. Until now, cruise ships had to come a long way to start operating in China. The Made in China 2025 plan specifically mentions cruise ship manufacturing as a priority. Currently, no other shipbuilders in Asia have the capability to manufacture a luxury cruise ship. A China-based builder could feed the developing China demand as well as the very active nearby markets of Japan and South Korea. Both Carnival and Royal Caribbean have had public, high-level meetings with CSSC to discuss potential partnerships in shipbuilding. The initial opportunity for cooperation, before jumping into start-to-finish manufacturing, may lie in ship repair and modification.

Taking the battle for overseas tourists back to China

While infrastructure-heavy, domestic tourist attractions pick up speed in China, overseas travel destinations are pulling out all the stops to attract Chinese tourists.

Take the Los Angeles Tourism Board, for example, which will celebrate its 10-year China anniversary this September. In the last decade, the organization has set up three offices across China, first in Beijing, then in Shanghai and Guangzhou. Last year was a game changer for Chinese tourism in LA: China outpaced Canada to become the city's No. 2 biggest international market after Mexico. Kate Chang, Regional Director of China for the LA Tourism Board, said this is the eighth consecutive year of double-digit growth for Chinese tourism to LA.

A major part of her job, as more and more destinations vie for attention, is securing more direct flights to LA. Direct flights cut down travel time, and more of them cut the prices, although Chang said that in focus groups with Chinese tourists, price rarely comes up as a concern. While Beijing and Shanghai airports are nearly at capacity, she sees great opportunities still in cities like Chengdu.

“We have been trying to do a lot of surveys, data and more to tell the airlines that if you have the connection (between Chengdu and LA), our China office will help you on marketing,” Chang said. She approaches Chinese airlines alongside an organization representing the LA airport. “We work together to approach airlines and attend aviation shows. This really helps us reach out to the root.”

Chicago, another major gateway city for Chinese entering the US, has seven direct flights between the two countries every day. Choose Chicago's President and CEO David Whiteaker said between 2012 and 2014, China went from the sixth international inbound tourism market to the top one. Similar to the LA Tourism Board, he's now eyeing other routes that can bring more visitors in.

“In the past two years, with a boost in the number of direct flights, an easier visa policy for Chinese travelers and increasing marketing investment form major tourist destinations, the Chinese traveler has more choices and easier access when it comes to selecting a destination,” Whiteaker said. “As we compete with other destinations, accessibility will be key.”

Visit Seattle's Director of Tourism Development, John Boesche, said direct flights were a major selling point of Seattle as well. China is already Seattle's top overseas market. The challenge for his city isn't necessarily in bringing over people, but the on-the-ground tourism infrastructure.

“One of Seattle's biggest challenges is a lack of hotel inventory,” Boesche said. “The city is growing rapidly, with major infrastructure plans already in motion, but the addition of hotel product has been slower.”

Global threats

Chinese tourism isn't immune to the threat of terrorism and other geopolitical events. Marlene Otepina, Editor and Research Analyst at Hill & Associates, calls the impact of ISIS-related terrorism on Chinese tourists “limited or short-lived.” Tourism companies reported many cancellations in the wake of the Paris mass shootings and the airport attacks in Turkey. She said it's more likely that an event in Europe would divert tourists to North America, or vice versa, rather than remove the desire to travel altogether.

“What does affect Chinese tourists is the value of the RMB,” Otepina said. “For instance, Japan tends to become attractive when yen depreciates and a weak euro has a similar effect on Chinese tourists travelling to Europe. Recently it was reported that the number of Chinese tourists to the UK has increased after Brexit thanks to the purchasing opportunities brought about by the weakening pound.”

The Chinese RMB has fallen 2.8 percent this year, but travelers aren't being swayed to stay at home. Ctrip's 2016 Outbound Trips Report states that in 2015, when the yuan started to stumble, outbound trips were up 12 percent year-on-year.

National sentiments can also impact Chinese tourism. Taiwan, a budding luxury shopping destination for mainlanders, has seen a slump in tourists, with a 15 percent drop off in mainland tourists after President Tsai Ing-wen assumed office. Japan saw similar decline during China's anti-Japanese riots in 2012.

The next generation

Besides long-term efforts in increasing airline and hotel infrastructure, the LA Tourism Board is also putting energy into making sure experiences on the ground also meet the rising expectations of Chinese travelers, especially the new generation of post-80s and post-90s.

“Millennials are different form their parents and the older generation,” Chang said. “They have their own way of connecting to the outside world. (A good hotel experience for them) isn't about slippers and tea – that's not the only thing you should focus on. They need people to engage with them.”

According to Ctrip, those between 25 and 35 make up the largest segment of Chinese overseas travelers, at 45 percent.

Choose Chicago hopes to win over younger travelers, too, with free customized tours of Chicago with a local, possibly Chinese-speaking, guide. But Whitaker says they have their sights set higher.

“We aim to have the largest Chinese New Year celebration in North America,” he said, as only an American or Chinese could.

Chicago Navy Pier Chinese New Year

Chicago woos Chinese travelers by hosting Chinese New Year activities such as this lion dance at the Navy Pier.