Disneyland needs still more transparency
We now know why Hong Kong Disneyland kept details of its financial performance and visitor numbers secret: they are woeful. Finally released this week under an agreement with the government, they show HK$4.4 billion in losses in the three years to October and attendance figures four million below expectations. The optimism of quick returns that accompanied the government's decision to use taxpayers' money to build the theme park has, in the light of a minimal degree of transparency, been replaced by uncertainty over when there will be a turnaround. We have a right to be angry, but we also have to be realistic.
Theme parks are, after all, a competitive business. Disneyland's local rival, Ocean Park, has risen to the challenge; after years of poor performance, it is turning a tidy profit and attracting as many visitors. Competition also comes from the region, with the latest, Resorts World at Sentosa, opening in Singapore. Even Walt Disney itself is adding to the competition with Shanghai's Disneyland opening in 2014, the same year our park expands with three new theme areas.
Competition requires innovation. This was lacking with the original management of Hong Kong Disneyland. The park opened in 2005 with few features identifying it as being the first Disneyland to open in China. What we got was an amalgamated smaller clone of the park's American sisters.
This would have been acceptable were it the 1950s and 1970s, when the first two Disney parks opened. But tourists of the 21st century are more worldly wise and demanding. Authorities, in wooing Disney in the 1990s, appear to have perceived the brand in its strictly American form as a guaranteed money-spinner. The numbers prove otherwise.
Hong Kong is a master at building hardware - pouring concrete for prestigious large projects such as bridges and railways. Our reputation is not so sturdy when it comes to the software. Disneyland, with its cookie-cutter model, does not alter such thinking. Ocean Park bucks the trend, though, showing just how inventive and adaptive we are capable of being. The government enticed Disney with an attractive package. We gave a lot of land and put up 80 per cent of the funding and in return got a majority shareholding and Disney's US management. Disneyland should have opened its gates with Chinese characteristics. Instead, what was offered was predictable and expected: hence the commonly expressed sentiment that it is boring.
Ocean Park's management has adopted a more innovative approach. Faced with competition, it revamped what had become a well-worn and tired attraction. Its model involves regular updates, additions and changes. This is creative and proves we have the talent to think in new and exciting ways. Ocean Park is now in discussions to sell its ideas elsewhere.
Disney has thankfully realised its mistake. A new management team is now playing catch-up. Two of the new theme areas will be exclusive to Hong Kong. Better ways have been thought of to entice mainland tourists - but much more needs to be done.
For inspiration, we can look to Disneyland Paris. It opened in 1992 to losses. With the realisation that it had to cater for local tastes, it relaunched three years later. Within months, it was turning a profit and now, with 15 million visitors a year, it is Europe's top attraction.
Our version of Disneyland has to reflect that it is in Hong Kong, China. It has to be Chinese in spirit, look and feel. Change and innovation have to be at the core. As importantly, though, the government and Disney have to ensure that we, as majority shareholders, know precisely how the park is performing, which requires considerably more transparency and openness.