Summary of Key Points
The Zhengzhou Yellow River Night City, which invested 160 million yuan, shut down just three months after its opening and has now become a free parking lot for the surrounding residents. Merchants, project developers, and villagers have all suffered losses in this situation. This is not an isolated case; many similar "night city" districts across the country are facing the dilemma of having large crowds but failing to generate significant profits. Despite appearing bustling with activity, they continue to lose money due to high costs, limited revenue sources, and flawed business models, making it difficult for them to sustain.
Detailed Analysis
1. From a "Dreamy Blueprint" to an "Empty Street": The Gap Between Idealism and Reality
The planning for the Yellow River Night City was initially very appealing, aiming to create a 24-hour entertainment park with holographic projections, free live performances, and 360-degree interactive shows, claiming to be an "immersive panoramic cultural and commercial complex." In reality, it was merely a 500-meter-long flood control road in the suburbs of Zhengzhou converted into a commercial area, with villagers' self-built houses (three stories high, each containing two to three hundred square meters of shops) on both sides. At the opening, the project developers spent money to hire actors and organize performances to create a lively atmosphere, but within three months, the place was deserted, with only rental advertisements remaining. The villagers' houses have been unsold for over a year.
In simple terms: It's like buying a "luxury gift package" from an ad, only to find it's just a regular plastic bag with items that break down after a few days.
2. A Huge Revenue Gap: The Free Admission Model Leads to Losses
The Yellow River Night City adopted a free-admission policy to attract visitors, but this cut off its most stable source of income. Where did the money come from? It mainly came from a percentage of the merchants' sales (for example, the Treasure Hall in Yufengling had to pay 20%). However, the expenses were substantial:
- Labor costs: Actors were hired for daily performances, costing over 5,000 yuan per month each; 40 security guards were employed at a cost of over 300 yuan per day.
- Rental costs: Dozens of houses were rented from villagers for an annual rent of 50,000 to 150,000 yuan each, resulting in monthly rental expenses in the hundreds of thousands.
- Operation costs: Lighting, equipment maintenance, and performance props all required significant funding.
As a result, the income from the snack stalls was not enough to cover these expenses. One merchant, Liu Ying, said, "This huge night city is barely surviving off the few snack stalls that are open."
In simple terms: If you run a business and let people in for free but still have to pay rent, hire staff, and buy materials, how long can you last if customers just stroll around without buying anything?
3. Blame-Shirking Among All Parties
After the project shut down, everyone blamed someone else:
- Project developers: They claimed that the villagers raised the rent prices when they saw more tourists and refused to negotiate, forcing them to withdraw.
- Villagers: They said the project developers failed to pay the rent, leading to the recovery of their houses.
- Merchants: They felt the project was unprofitable, and the rental issue was just an excuse. "You invested 160 million yuan; if it were really profitable, you could have agreed to higher rents."
In the end, everyone lost: the developers' investment went down the drain, the villagers couldn't rent out their houses, and the merchants either had to close their businesses (like Liu Ying) or struggle to continue (like Yufengling, who wanted to move but faced relocation costs of tens of thousands).
In simple terms: It's like a partnership where no one wants to take responsibility for the losses, resulting in mutual harm.
4. A Common Industry Problem: "Many Visitors, Little Profit"
The Yellow River Night City is not an exception. Even the pioneering Xi'an Tang Dynasty Night City, which welcomed 86 million visitors in 2025 (the highest number of night tourists in the country), had a net profit of only 235,300 yuan in the first half of 2024, with the operating company, Qujiang Culture and Tourism, suffering losses for several years (196 million yuan in 2025).
Experts have identified four main reasons for this:
- Public good nature: Night cities are considered a city's landmark, but the government should bear part of the costs, yet companies bear them without any support.
- Lack of stable income from free admission: Without ticket sales, businesses rely on percentages from merchant transactions.
- High operation costs: Lighting, performances, and maintenance are all costly.
- Vicious cycle of limited revenue: More visitors during peak seasons lead to fewer customers in off-seasons, causing merchants to close, resulting in even less income and making it harder to attract new businesses, leading to further decline.
In simple terms: It's like running an internet-famous store with many people but no sales, resulting in high costs and ultimately failure.
5. The Dilemma of Merchants: Caught in the Middle
Merchants like Yufengling and Liu Ying faced a difficult situation. They invested heavily in the project, only to see it fail within three months. Yufengling's business is still open but has no customers, and he can't afford to move due to relocation costs. These small businesses became victims of the project's failure, losing all their investments.
In simple terms: If you invest in a franchise and the main store goes bankrupt, your branch can't survive on its own, and you can't withdraw either.
Conclusion
The failure of the Yellow River Night City highlights the collapse of a business model that focuses more on attracting visitors than generating profits. Many places that attempt to create "night cities" rely on free admission to attract crowds without properly calculating the costs or finding sustainable revenue sources. As a result, such projects not only fail but also harm the merchants and local communities. For such initiatives to be successful, it's essential to understand that having many visitors does not equate to generating cash flow, and free admission is not a solution. A sustainable profit model must be established; otherwise, even the most ambitious plans remain unattainable.