Swift action needed to revive Disneyland
This month, milestones are marked in the world of Disney theme parks, but these events also serve as a reminder of how difficult it is to operate the parks profitably. Yesterday, Tokyo Disneyland celebrated its 25th anniversary. Later this month, Hong Kong Disneyland will open the long-awaited It's a Small World ride, its first signature addition since the park was launched more than two years ago.
The woes that have beset the Hong Kong park are well known. They include disappointing attendance figures, complaints about a lack of major attractions and what appear to be mounting losses. Their precise extent, however, has never been disclosed.
This performance contrasts sharply with the success of Tokyo Disneyland, the first of its kind to open outside the US. Over the years, it has been highly profitable. Now it says it is hoping to expand in Southeast Asia. With reports constantly surfacing about plans to build a Disney park in Shanghai, the latest development from Japan should be a wakeup call. Swift action is needed to revive our park.
It should be noted, though, that Tokyo's latest expansion plan is a response to unfavourable trends developing in Japan that make past profit levels unsustainable in the long run. Unlike Hong Kong, the Japanese theme park is operated as a franchise by Oriental Land. So, while it deploys the same beloved cartoon characters, its facilities and rides - though based on Disney themes - have been localised to appeal to Japanese tastes. More than 95 per cent of its visitors are Japanese and most of them are repeat customers. The majority are, interestingly, women. But despite its successes, the company realises the country's ageing population can only mean fewer visitors in future. The only room for expansion is, therefore, to attract foreign visitors and make a move outside Japan.
The situation facing Hong Kong Disneyland is very different. Since its opening, corporate Disney from the United States has run the show, making it essentially an American-style park with Chinese-language services. This is despite greater latitude being granted to local managers after a series of embarrassing mishaps and bad publicity. Unlike the local customer profile of Tokyo Disneyland, the Hong Kong theme park will only be profitable by attracting more mainland visitors to make up for the declining number of locals. And compared with its Tokyo counterpart, Disneyland at Sunny Bay is small; its rides do not compare favourably with the far wider variety of facilities and games the Japanese park offers. Its fairytale castle, for example, is tiny in comparison with that at Tokyo Disneyland.
For Hong Kong to have a fighting chance, its park cannot afford to be so far behind in quality and size. The way forward is clear. It must expand not only its size quickly, but bring in new exciting attractions - to draw fresh mainland tourists and bring back local visitors. For this, new capital investment is needed. Corporate Disney and the government are open to the idea, from hints that have been dropped by senior officials from both sides over the past few months. Secretary for Commerce and Economic Development Frederick Ma Si-hang, for example, has said the government is prepared to consider new options. His predecessor, Stephen Ip Shu-kwan, refused to consider fresh capital investment.
No one wants to see more public money being wasted. But as its majority shareholder, Hong Kong has a vested interest in Disney's success. Unfortunately, negotiations, as always, have been behind closed doors. It's time to disclose the levels of extra investment both sides are planning, to help dispel suspicions and restore confidence.
