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SSLL
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From: http://www.latimes.com/business/la-fi-hkdisney12may12,1,2783619.story?coll=la-headlines-business
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Disney Says Park's Finances OK
From the Associated Press
May 12, 2006

HONG KONG — Attendance at Hong Kong Disneyland has fallen below expectations, but the park's finances are solid, Walt Disney Co. said Thursday.

The park, Disney's latest, has been hit by a slew of bad publicity and reports of poor attendance since its opening in September. Park officials recently offered free entry to more than 40,000 taxi drivers to promote the theme park.

In a statement, Hong Kong Disneyland said the park was in good financial shape.

"Hong Kong Disneyland is on a very firm financial footing. We are in our first year of business and are showing a positive cash flow and great liquidity," it said.

The statement called the park "a solid asset that is going to be a real lynchpin for both Hong Kong and the Walt Disney Co. for decades to come," adding that more than 80% of guests surveyed rated their experience at the park as positive.

The statement said Hong Kong Disneyland expected a busy summer season, with three attractions opening by early July.

Announcing its earnings this week, Disney said crowd figures at Hong Kong Disneyland had been lower than expected, but that it still expected to hit a one-year goal of 5.6 million visitors.

Disney gave no details about the number of visitors or revenue from its Hong Kong park.

"We clearly have a lot to learn about the market," Disney Chief Executive Robert Iger said Tuesday. "Overall, I don't think our marketing efforts have been as effective as they could be. But we're going to figure this out."

Hong Kong Disneyland came under attack last year from environmentalists for planning to serve shark's fin soup — a plan it later abandoned. Critics also accuse the park of exceeding its powers by asking health officers investigating suspected food poisoning at the park to remove parts of their uniform.

In February, park executives sparked a backlash by turning away guests, who had tickets, because the park reached capacity.
 

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I think it is not as good an investment as it could have been, but not because it is a Disney Park. I think they underbuilt it - there really is not a whole lot offered in the park for rides - and that is what is hurting them. I also think there is a tendency for the media right now to be attacking Disney, and Hong Kong may not have been the most favorable place for them to build. But I think that, given time, it will pick up well.
 

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There is a second phase under construction. It will take years to determine whether they payoffs and returns are reasonable. We only have less than a year's results from only the first phase of the park so far.
 

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Isn't this a similair story like Disneyland Paris?
 

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It will go through. These large-scale projects tend to show their real value after many years, therefore this park must have a staying power. A force that would drive people to come again, many visitors tend to say "Oh, Ive been there already, what's the point of seeing it again?", that is the challenge to Disneyland to have attractions that tourists will always be looking for despite having seen it already.
 

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As for now, HK Disneyland is small. If not those from The Mainland, the theme park also targets tourists from South and South East Asia. Those from Korea or Japan would prefer to go to Tokyo Disneyland than HK.
 

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HK Disneyland was originally conceived to a different market. It was felt that the Chinese were less likely to enjoy heavy thrill rides and constant action, and prefered to stroll around and look at things much more. Which is why HK Disneyland has a lot more manicured spaces and fewer rides. As it turns out, they may have gone too far the other way, so I would expect to see more coming in.

Another issue is the funding. Tokyo Disneyland was funded outside the company, sort of like a franchise. It is successful beyond belief. So when it came to building EuroDisney, the Disney corporation kept it inhous.e And that did not fare so well. HK Disneyland is a mid point between the two, investment by Oriental Land Company, but controlled by Disney. Which meant that they were less willing to spend big on it. I think this was a mistake, but I also wonder if the political climate really makes this a safe venture right now.
 

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HK Disneyland was specifically geared towards mainland tourists rather than the Southeast Asia or Japan/Korea markets. The immediate area around HK and other individual visit scheme cities in China are enough to keep HK Disneyland busy for quite a while.
 

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hkskyline said:
HK Disneyland was specifically geared towards mainland tourists rather than the Southeast Asia or Japan/Korea markets. The immediate area around HK and other individual visit scheme cities in China are enough to keep HK Disneyland busy for quite a while.
Its targeted for Mainlanders but alot of prefer to go to Ocean Park. But still, HK Disneyland still gets alot of tourist from South East Asia especially from The Philippines.
 

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due to its bad publicity since the opening esp. the reports on the rudeness of the american staff caused unpopular noises n fall in entry however Disneyland is still a solid trademark and there will always be people wanting to go so therefore i think it still has a possitive future. Moreover, the reason why HK Disney is established is for the Disney co 2 get a glimps of the Chinese market as they are planning to expand onto Shanghai and possibly other cities.
 

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From: http://www.statesman.com/business/content/business/stories/other/02/18/18chinadisney.html
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Disney's magic in China is mixed
Disneyland's entry into Hong Kong has hit cultural bumps.
By Craig Simons
INTERNATIONAL STAFF
Sunday, February 18, 2007

HONG KONG — Before Walt Disney Co. opened its theme park here two years ago, planners carefully considered local customs.

Disney officials brought in a master in the traditional Chinese art of feng shui to "maximize energy and guest flow," convinced actor Jackie Chan to paint eyes on a lion costume — a Chinese symbol for luck — and tested local specialties for restaurants at the park.

Candy containers at Hong Kong Disneyland have traditional Disney characters and Chinese writing, but many of the park's attractions are geared toward English speakers.

Yet despite efforts to adapt to Chinese culture, the meeting of the Magic and Middle Kingdoms quickly turned rocky.

An array of critics accused Disney of endangering the environment, disregarding local customs and unfairly profiting from the joint venture in the Hong Kong theme park.

Disney has repair work ahead as it seeks to expand its media and merchandising businesses in China and looks at the possibility of building an even larger theme park near Shanghai.

For Western companies, Disney's challenges highlight the difficulties international brands face as they try to tap China's lucrative and growing market.

Although there is strong support in Hong Kong for the Disneyland park overall, "management has had some settling-in problems," said John Ap, a theme park expert at Hong Kong Polytechnic University.

"From Disney's perspective, they'll want to sort out the mainland market before they go into Shanghai," he said.

Disney has been considering building a theme park in Shanghai since the 1990s, when Hong Kong beat that city in a competitive bidding war. Although no decision has been made on a Shanghai park, the company "continues to explore possibilities in China," Disney spokeswoman Lisa Haines said.

A report last year by consulting firm PricewaterhouseCoopers LLP estimated that theme parks in China, excluding Hong Kong, will generate $1.8 billion in 2010, up from $1.3 billion in 2005.

A theme park in Shanghai also would boost sales of Disney branded products and movies, Haines said.

"Our research has found that Disney parks help to increase the overall awareness of the Disney brand," she said. "There is good synergy between other Disney products and our parks."

Although Disney does not release specific financial information, it has invested heavily to expand its presence in China.

Disney is working to popularize its characters in China by promoting its movies and television shows. China Central Television will begin showing Disney cartoon "Lilo and Stitch" this summer, and Disney will release its first film adaptation of a Chinese novel, a co-production with two Chinese companies, this summer.

The number of stores in China carrying Disney merchandise has more than doubled since 2005, and management plans to sell branded goods at 6,000 stores by 2009.

Last year, Disney signed an agreement with Chinese company Shanda Interactive Entertainment to develop an online game featuring Disney characters, part of a corporate strategy to expand market presence, said Stanley Cheung, managing director of Disney's China office.

"China is a priority for the entire company," Cheung said in a company news release.

The emphasis on building the mainland market has magnified the significance of problems at Hong Kong Disneyland. The problems raise concerns about whether Disney management will meet even greater resistance on the mainland, where cultural differences are more pronounced.

Last year, roughly 29 percent of Disney's revenue came from its 11 theme parks, which together generated $9.9 billion in revenue. Attendance at Hong Kong Disneyland during its first year was 5.2 million, slightly less than the company's target of 5.6 million.

A Hong Kong group picketed the park's opening and one-year anniversary, arguing among other things that Disney had done too little to incorporate China's cultural legacy.

Environmental groups condemned a decision by Disney to offer shark's fin soup in its restaurants.

More important, average citizens were angered by what they perceived as an unfair deal between the Hong Kong government, which paid for most of the project, and Disney, which received an oversized portion of its shares, Ap said.

The Hong Kong government, which hopes the park will attract tourists to the city for many years, has spent more than $2.9 billion on the project and infrastructure improvements, about 82 percent of total costs, while Disney received 43 percent of the joint venture shares.

A survey conducted by Ap last year found that 56 percent of Hong Kong residents thought the financial deal with Disney was unfair while 70 percent said their "opinions toward Hong Kong Disneyland have become more negative" because of problems since its opening, including several overbooked days during last year's Chinese New Year.

Since the survey was taken Disney has expanded the park and addressed ticketing problems, and local support might now be greater than it was a year ago, Haines said.

For mainland Chinese who visit the park, many of whom don't speak English, a lack of cultural relevance may be more damaging. Some of the shows and rides at Hong Kong Disneyland are presented only in English, and many older Chinese do not recognize Disney characters.

"Younger Chinese like Mickey Mouse, but they should include traditional Chinese culture for adults," said Zhu Yuan, a 64-year-old retired professor visiting Hong Kong Disneyland from China's northeastern Tianjin City.

While she enjoyed "Main Street USA" — a line of shops and restaurants built to look like the Missouri town where Walt Disney grew up — "I'd rather go to a park that has a Chinese town," she said.

But Wang Tingmei, 54, a businessman from China's northwestern Heilongjiang province, said that a park would do well even if it simply copied American versions.

"The rides are good and they manage the park better than Chinese theme parks," he said, "so people will go."

But Disney must also balance keeping Chinese customers happy with maintaining its international reputation, a problem highlighted by management indecision over whether to serve shark's fin soup.

When environmental groups first protested Disney's plan to serve shark's fin at wedding banquets, saying that shark species are threatened because of China's appetite for their fins, Disney said it would offer the food to be respectful of Chinese culture and would ensure that all fins came from legal harvests.

But after increasing pressure, Disney replaced the dish with lobster bisque.

Because many Chinese consider shark's fin soup a delicacy, Disney may have lost business by pulling it from menus, Ap said.

"If shark's fin is not served at a banquet, many Chinese believe their hosts are cheap," he said.

The culture clash was reminiscent of protests in France when Disney opened Euro Disney, later renamed Disneyland Resort Paris, in 1992. Among other things, some French were upset by Disney's decision not to serve wine, a staple of French culture, and in 1993 Disney added alcohol to its menus. Today the park is Europe's top tourist destination, last year attracting 12.8 million visitors.

Some Hong Kong residents have been angered that Disney has not included more local culture in the park.

"Disney did nothing to incorporate Chinese and Hong Kong culture and values," said Lee Wing-yin, the 24-year-old organizer of Disney Hunter, a small group of Hong Kong residents who opposed the theme park's construction.

"It was really a very big investment and the Hong Kong government could have attracted more tourists if they built a park that highlighted traditional Chinese values and the heritage of Hong Kong," she said.

If Disney does stumble over cultural hurdles in mainland China, it will not be the first foreign company to do so.

In 2004, Beijing banned a Nike television advertisement showing NBA star LeBron James defeating a dragon, a traditional symbol of the Chinese state, for failing to "respect the motherland's culture."

In 2003, Toyota pulled a print ad showing two stone lions, emblems of Chinese culture, saluting a Prado sport-utility vehicle. Chinese erupted in anger at what they perceived as cultural arrogance.

"If Western companies don't understand Chinese culture, they risk losing customers," said Fan Yezhong, a tourism development expert at Beijing's China Tourism Development Institute.

At Hong Kong Disneyland, mainland visitors were upbeat that a Disney park would succeed in Shanghai.

Ling Wu, 35, agreed that a Disney park would attract Chinese visitors but said management should make Chinese the primary language and include more elements of Chinese culture.

"Otherwise, how are we supposed to understand?" he asked.
 

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Its targeted for Mainlanders but alot of prefer to go to Ocean Park. But still, HK Disneyland still gets alot of tourist from South East Asia especially from The Philippines.
I'll take Ocean Park over Disneyland any day. It has a much more regional feel and a roller coaster right along the coast. The oceanarium is money!!! Plus, right next door is Water World, which ain't bad either. Disnelyand is lacking such attractions.
 

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I don't think the concept of Disney is foreign, but rather their marketing campaign was badly organized. They suffered quite a number of PR lapses since opening, which the media exploited to the fullest. However, I don't think many attractions in Hong Kong gets over 5 million visitors a year, although the park didn't meet its estimated attendance of 5.6 million.

Mainlanders comprise a large chunk of the visitors mix. According to a South China Morning post article on 9 September 2006 :

During July and August, mainland visitors accounted for about half of the theme park's attendance. Mr Ernest has said they had taken note of the degree of seasonality and will plan next year's calendar and future events accordingly. The first major test will be the National Day holidays next month.

I don't think a more Chinese-style theme park would help boost attendance given the PR gaffes. There are plenty of such theme parks in the mainland, so it wouldn't be much different to come to the Hong Kong park. Ordinary Chinese still don't have exposure to the Disney characters and products, so the brand may not appeal to them yet. Having the park maintain its foreign roots might not be a bad thing after all - it's something different. Macau did the same with their very European-style Fisherman's Wharf, and it looks like that has been successful with the tourists.
 

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No need to argue with WANCH, hkskyline. He is a Filipino, of course he will make comments like
Originally Posted by WANCH

As for now, HK Disneyland is small. If not those from The Mainland, the theme park also targets tourists from South and South East Asia.

HK Disneyland still gets alot of tourist from South East Asia especially from The Philippines.
WANCH, since you are not a Chinese HKer, I prefer you not involve in any politics issue in HK like

It's Hong Kong, not Hong Kong. China!!!
It's no possible a real Hker will say that words, and it's offensive. What if I as a Chinese living in Leuven Flanders say that Flanders is not Flanders, Belgium... :mad:
 

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Hong Kong will always be Hong Kong, CHina... :)
 

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Disney spent a lot of money on building Disneyland Paris, the most beautiful "magic kingdom" ever. When that was snubbed (initially, at least) by the French, they started a policy of building parks on the cheap (Disney's California Adventure, Disney Studios Paris, Hong Kong Disneyland). But building these cheap parks hasn't worked either from a financial standpoint. Hong Kong Disneyland very few rides no real exceptional ones (the Winnie the Pooh ride, for example, is a poor version of the one in Tokyo). Also, there are only three principal themed areas in this park, fewer than in than in the other "magic kingdoms." The park is missing most of the classic Disney rides. A number these are now bieng built - It's a Small World, Pirates of the Carribean, and Haunted Mansion will all be built in the next 5 years. This will undoubtedly increase attendance - but this will cause another problem. The other "magic kingdoms" can accomodate nearly 60,000 people on busy days. Hong Kong Disneyland, on account of its small size, can currently hold less than than 30,000 people, and because of its cramped layout, I doubt that number will double once the expansions to the park are completed. The one redeeming aspect of the construction of this park, and the reason it is so small, is that Disney "imagineers", having to work with a small budget, decided to sacrifice quantity for quality: unlike Disney's California Adventure and Disney Studios Paris, which are poorly themed and look like strip malls, Hong Disneyland is at least very attractive to look at, enhanced by its beautiful setting.
 

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I don't think it is fair to judge the $3.5 billion spent on building a world-class resort by looking at merely the first year's results. While attendance was lower than expected, the difference wasn't very significant (>5 million actual vs. 5.6 million estimate). This is a long-term investment, so as long as the numbers are on the right track and are not off by a lot, I think it is OK. Let's wait and see what the 2nd year is like.

Disney is probably a bit nervous about venturing into China, which is reflected in the park's small design. However, given a few more years of solid results (both attendance and financial), they may be more reluctant to embark on a major expansion. Right now, more bits and pieces are coming online, and it will take a while to grow the park to its full potential.
 

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Totally agree with hkskyline.

And don't forget Disney hasn't been in China for long. Not many too people grew up with Mickey Mouse, Donald Duck and so fro cartoon charater like Americans, Hong Konger and many people around the world. For many mainlander, Disneyland isn't any dream world like many people think it is. Disneyland is just anothem theme park like Ocean Park.

Hong Kong Disneyland has just opened up its first phase, there are room to expand the park. And the mainland travel market has just opened up, many mainlander will start travel around in Asia with Hong Kong as one of the destinations. There is a huge tourists' pool available.

Don't forget HKSAR government put in a lot of money in the theme park and hold about 50% share. The government won't let the tax money flush down the toliet seat.
 

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There are a lot of short-sighted critics that are giving pressure to the government over the first year's results. Disney didn't do much favours by withholding attendance data repeatedly, which was a big PR mistake. They weren't too bad anyway to start.
 
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