Zhangjiajie Invests Over 2.2 Billion Yuan in "Dayong Ancient City," Sells Fewer Than 20 Tickets Daily, Forced Into Bankruptcy

The Taiping Heavenly Kingdom statue at Tianxin Pavilion in Changsha was removed. (Online screenshot)

[People News] In recent years, the "ancient city craze" swept across China, with various regions investing heavily in such projects. However, the results often failed to meet expectations. The "Dayong Ancient City" in Zhangjiajie, Hunan, is a prime example. With a cumulative investment exceeding 2.2 billion yuan, the site has suffered continuous losses since its trial operation in 2021. In the first half of this year, only 2,300 tickets were sold—an average of fewer than 20 tickets per day. The project has now entered bankruptcy restructuring proceedings in an attempt to attract new investors. If the restructuring fails, the court may declare it bankrupt.

According to Radio Free Asia, Zhangjiajie was historically known as Dayong. In 1994, Dayong City was renamed Zhangjiajie City. "Dayong Ancient City" was developed by the publicly listed Zhangjiajie Tourism Group, which invested around 2 billion yuan in the project. Designed in the architectural style of the Ming and Qing dynasties, the site covers 160,000 square meters and was the largest single-city cultural tourism project in Zhangjiajie. Construction began in 2016, trial operations started in June 2021, and the site was fully completed in August 2022.

Hunan Daily and Jimu News reported that the project's original projections anticipated annual revenue of 485 million yuan and a net profit of 185 million yuan. However, the reality has been a worsening financial situation: losses of 83.66 million yuan in 2021, 151 million yuan in 2022, and 249 million yuan in 2023. According to the group’s semi-annual report released on August 26, only 2,300 tickets were sold in the first half of this year, an 81.89% year-over-year decline.

“We’re Just Barely Hanging On”

Despite repeated local media promotions, Dayong Ancient City has failed to attract visitors. Two months ago, a court accepted a bankruptcy restructuring application filed by Hunan Hongrui Elevator Co., citing the ancient city's inability to repay overdue debts and its clear lack of repayment capacity.

The National Enterprise Credit Information System shows that only 18 stores currently operate in the ancient city, apart from Zhangjiajie Dayong Ancient City Development Co., and three of them have already closed.

"We're just barely hanging on," said one merchant, who revealed that they spent nearly 2 million yuan in 2020 to open two stores in the ancient city. Each store employs two staff members, with a combined monthly salary expense of about 9,000 yuan. The business has been operating at a loss and is barely sustainable. Another merchant mentioned that their shop has remained unopened after renovations, resulting in losses exceeding 100,000 yuan. They hope the ancient city's operators can revive the site through restructuring and attract more visitors.

The Dayong Ancient City features replicas of the Zodiac bronze statues from the Old Summer Palace and ethnic minority architectural styles. However, Li Bohuai, director of the Tourism Development Research Institute at Sichuan University, criticized the project.

"The investors did not seriously research what Dayong’s original ancient city looked like," Li said. "What they’ve built doesn’t make sense from any perspective. It doesn’t resemble an ancient city and has no connection to history."