Theme Park Insider

Hong Kong Disneyland Celebrates its Birthday as Analysts Worry About its Future

September 11, 2015, 3:07 PM · Hong Kong Disneyland celebrates its 10th birthday this weekend, but even as the park announced new attractions to celebrate the occasion, analysts expressed skepticism about the park's near-term future.

Disney's 11th theme park opened September 12, 2005 to lukewarm reviews, mostly due to the park's small size and limited number of attractions. However, Disney and its partners invested heavily in expansion, adding the first Toy Story Playland in 2011, Grizzly Gulch in 2012, and Mystic Point in 2013 — home of the Theme Park Insider Award-winning dark ride Mystic Manor. Today in Hong Kong (which is tomorrow for those of us in the Western Hemisphere), Disney Parks Chairman Bob Chapek announced several new additions for the park's "Happily Ever After Celebration," which will begin in November, following the Hong Kong Disneyland's popular Halloween festivities.

Hong Kong Disneyland
Chapek, to the right of Minnie Mouse, at today/tomorrow's announcement

None of the additions will match the scale of the park's previous expansions. The new attractions include:

In addition, a previously-announced new Iron Man-themed motion-base ride will open next year.

The additions come as Hong Kong Disneyland is suffering a decline in attendance. "Figures for July showed a year-on-year decline in visitor numbers of 8.4 per cent, a decrease that was reflected in retail sales, which have seen falls for six consecutive months year on year," according to a local report.

Hong Kong's currency is tied to the U.S. dollar, whose recent strength has made traveling abroad a bargain for Americans, but travel into the country relatively more expensive for foreign visitors. Those exchange rates have made it less attractive for outsiders to visit Hong Kong Disneyland, as well, where more than two-thirds of visitors come from outside the Special Administrative Region. (And the strong dollar makes it easier for Hongkongers to visit elsewhere, accelerating the attendance slide at the park.)

As for the future, a developing economic crisis in China, coupled with the planned opening next year of another, much larger, Disneyland in Shanghai, are leaving analysts skeptical whether Hong Kong Disneyland can reverse its declining attendance anytime soon.

"This time, it is different. It is not a slump. We don't know when it will bounce back," one local politician told the South China Morning Post, in regard to Hong Kong's tourism outlook.

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Replies (19)

September 11, 2015 at 3:55 PM · I would say that Disney will come out ok. Disney is going to put the time and money into parks to make them right. Failure is not an option!

Look at DLP. Granted, it had a quicker turnaround, but it was left for dead at the beginning and now its the place to go!

September 11, 2015 at 4:25 PM · Actually, DLP's attendance tanked last year, too, and even a well-reviewed new Ratatouille ride couldn't help WDS, which is shedding visitors, too.

It seems that, outside Japan - where Oriental Land Co. owns and operates the Tokyo Disney Resort, no Disney park outside the United States is doing particularly well right now.

September 11, 2015 at 4:49 PM · I'd be interested to know how Ocean Park is going in comparison (which admittedly has more local attendance I understand), or how Hong Kong's tourism is as a whole. Unlike other places like Orlando, or LA (for me), HK Disney is not a reason in itself to go to Hong Kong.

I attended the park in about 2007, and it was farely sparse. Nothing wrong with the park, just not the quantity of attractions. This seems to have improved. So I wonder if the problem is not the park itself, but a reflection of Hong Kong which may be being dwarfed by the expansions in mainland China.

September 11, 2015 at 5:07 PM · It's definitely a Hong Kong problem foremost, with the currency issue driving that. But the weakness of the larger Chinese economy is what's driving the longer-term concern.
September 11, 2015 at 5:27 PM · The 'Doom & Gloom' directed at international WDCo parks is always entertaining. When you ask the person spreading the Doom & Gloom, have you been to Paris or Hong Kong, most often you'll hear... No, I would never go!

That impression, to be honest, is interesting as they have no first hand knowledge. But, rather accurate based on resort feedback. And WDCo has admitted that Hong Kong and Disney Studios Paris were built on the cheap. And that Disneyland Paris was allowed to run into serious disrepair.

So what's the solution?

Bob Iger has openly spoken about the solution... investment. Behind the scenes DIS has discussed another $1B is needed at both HK and the Paris studios. Further internal discussions have shown $1B is a minimum at both parks, as the attractions will need to be unique for HK to compete with Shanghai and Paris to compete with upcoming competitors.

Don't forget, Iger committed the WDCo to purchase the Paris resort as part of the on-going recapitalization. Will it happen? Who knows.

WDCo's internal projections continue to show attendance will continue to decline at the Paris resort as all efforts are focused on restoring both park's deteriorated looks.

For HK they seem to be in a holding pattern, rightly or wrongly, to see how Shanghai effects HK. Remember, HK and Shanghai were originally thought of as a replay of LA and Orlando. HK regional and Shanghai wide. HK needs more e-Ticket attractions and they are planned, but another issue continues to be the minority position WDCo holds in the joint venture.

While running around screaming 'Doom & Gloom' can be fun, it becomes a fools errand when you realize WDCo has short-, medium- and long-term plans for all their parks.

Honestly, WDCo hasn't hidden their intention towards HK or the Disneyland Resort Paris.

September 11, 2015 at 6:12 PM · Yes, it's definitely a Hong Kong problem. I make sure to read most stories I see about Hong Kong, because I'm so close, and still need to go for customs every few months. Mainlanders used to flock to HK for all of their luxury stores and goods, dragging their suitcases along behind them. But now mainland China has all of the same stores, and north Chinese are simply going to South Korea, if they really want to leave the country. Not to mention, the recent protests, and Hong Kongers feeling like Beijing is trying to force their culture upon HK, it makes for quite a lot of tension among many.

But in the short-term, it gives me more reason to go! Less crowds means a more relaxed stroll through the park, and multiple rides on Mystic Manor and Grizzly Mountain!

As I wrote some time ago after my visits, December 2014, the park was fairly deserted. Late February this year, it was "crowded", due to Chinese New Year. And when I say "crowded", I'm talking a 45 minute wait for Mystic Manor. That's actually not bad, but compared to a 5-minute wait last year, it felt like an eternity.

Here's hoping for another big expansion - they certainly have the room.

September 11, 2015 at 6:16 PM · I've always been skeptical of the reported attendance for this park. Like all things in China, you never know what the real figures are. I've seen many trip photo reports of this park at different times of the year and it always seems relatively empty. And the business reports I've read generally state that Ocean Park is way more popular with the locals. My personal opinion is that this park will never do well, partly because of the issues Robert has reported, and partly because Hong Kong residents don't really have a passion for Disney. Disney is not necessarily the be all and end all in all countries. And the mainland Chinese are the same way. Shanghai may not be the long term success everyone is expecting. Maybe a big opening year, but then downhill like money pit Paris. China is not the juggernaut the pundits exclaim. I've been saying for many years that China's a paper tiger with lots of long term issues. Mark my words.
September 11, 2015 at 8:50 PM · To 138.229.235.14,
The issue is though, if Hong Kong's tourism is down all the investment hopes to achieve is improve attendance from locals, which may not be enough to keep HK Disney going. Throwing money at the problem may just be a waste. Disney (I think) needs to work on improving local attendance, and work with the Hong Kong tourism groups to try to improve international and mainland visitors - new rides may not be the solution.
September 11, 2015 at 9:55 PM · I've been to the Hong Kong Park - and ultimately the big problem it has is that it's just a very poor park - far too small, far too few attractions. Why anyone would want to stay at the few Disney Hotels around the park would make no sense to me. We went in July, peak tourist season, and the park was pretty empty. They have tried to address a few issues and add a few attractions, but the underlying problem remains. Even looking at the castle - something that should be the showpeice of the park - it's tiny and pointless. What i noticed is you had a fair few tourists in the park, and very few of the indigineous population. As someone mentioned earlier, Disney Parks aren't the be end of everything for people in South East Asia.

Universal is struggling in Singapore too - again a far too small park.

September 12, 2015 at 12:43 AM · It's just not Ocean Park and Shanghai Disneyland that Hong Kong Disneyland has to contend with but also the theme parks across the border in Mainland China especially the ones in Guangdong Province.

Specifically you have Wonders of the World and Happy Valley in Shenzhen which are owned by the Shenzhen OCT group which is #4 in terms of annual attendance ahead of Six Flags.

There is also the Chime Long theme parks in Panyu (like a Busch Gardens)and their Ocean Kingdom (think a supersized Seaworld) and the latter which most more accessible and convenient when the Hong Kong-Zhuhai-Macau bridge opens next year.

September 12, 2015 at 1:10 AM · If Disney wants more locals, then its needs to achieve a greater reach in the local media. Showing a Disney film once or twice a month on local TV is not going to work. We watched Japanese cartoons like Doraemon, Dr Slump, Gundam, Heidi, Little Creamy, Captain Tsubasa and Space Fortress Macross, etc growing up. We know the theme songs of each one. Mickey and friends, not so much.

The 2011 Winnie the Pooh movie and the 2014 Muppets Most Wanted movie were both NOT distributed in HK cinemas, even though both were well received in the USA. So clearly not all Disney properties are marketable here. Disney has a lot of work to do to expand its reach.

September 12, 2015 at 2:22 PM · I'll say it again why the WDCo decided to build in Shanghai when Hong kong and Paris have been struggling for years is a decision that boggles my mind. They could have built a whole second gate in Hong kong, which is necessary if they want to fill those hotel rooms. Disney is not embedded in other cultures like it is in Japan and the USA. Large population does not automatically equal success. People won't go just because it's Disney. Hong kong Disneyland is getting wooped by a Sea World knock off (granted a very good sea world knock off)! That's scary.
September 12, 2015 at 3:38 PM · Nobody mentioned the other variable. Macau is also down from the China crackdown on high roller gamblers. Hong Kong is the gateway to Macau. Wynn reported significant decrease in Macau revenues. There are simply less Chinese tourists going to Macau that would bleed off a side trip to HK Disneyland. Having been there, I mainly feel the whole park doesn't fit the location. Poorly designed and themed. The layout and castle was borrowed from the Anaheim version. In a city with sky high skyscrapers, the tiny pink castle is weirdly small. The American main street feels out of place in a former British colony. It instead should have been Mary Poppins lane. Grizzly Gulch has no charm. Again, the flow doesn't work. They should have just kept the Adventureland theming throughout and towards Mystic Manor. This park is another Eisner legacy of bad design and planning. They need to do a California Adventure style makeover to get the park on track.
September 13, 2015 at 12:48 PM · Universal Studios Singapore and Hong Kong Disneyland are parks with few attractions, little room to expand, and located in areas that just aren't worth visiting for theme parks. California Adventure's makeover only worked because it was located next to Disneyland, one of the worlds top five parks. Why Universal wants to make a park in Beijing and Disney wants to make a park in Shangai is beyond me when their other parks in the area are struggling so.
September 13, 2015 at 2:42 PM · "This park is another Eisner legacy of poor designing and planning."

I could be wrong, but I'm pretty sure HKD was built shortly after Eisner stepped down. Eisner made a lot of mistakes during his reign (like a LOT) but it's important to remember that he did as many good things for the parks as he did bad things. There was more parks opened under him then any other Disney CEO and he gave us the company's best attractions to date, including Splash Mountain and Tower of Terror. Even Walt made a couple of mistakes! Let us not forget how unprepared Disneyland was for opening day. (Thankfully he learned from that experience)

Now that my little rant is over, I have a couple of questions. How popular is Marvel in China? Despite being owned by Disney, it's still not considered full, pure Disney. Does Universal have any properties under it's belt that are popular in China? Any theme park-worthy IP that Disney doesn't get usually hoes to Universal. They're bound to have something the Chinese would be interested in. And, lastly, what countries outside of the US and Japan would be a good idea for a Disney theme park? A huge amount of WDW visitors are foreigners, so obviously other countries out there are interested in the Disney product.

September 13, 2015 at 3:46 PM · They want to make parks in China - as the economy is booming, movies are doing great business out there, capitalism is taking of there in a big way - and they want to be a part of it.

I'm glad Disney are going all the way in with Shanghai - with Hong Kong, and initially with Paris they were very half baked. Hong Kong Disney is just too small. Same with Universal Singapore - far too small.

September 13, 2015 at 5:41 PM · "California Adventure's makeover only worked because it was located next to Disneyland"

So a Hong Kong Disneyland makeover won't work because it is Disneyland? That doesn't make any sense and it ignores how great the full makeover content that includes new attractions and a full theming makeover of California Adventure's Main Street that also includes a recent makeover of Condor Flats to Grizzly Peak. To continue the makeover process, the Hollywood Backlot is next. HK Disneyland needs to re-think its theming and completely change out the tiny pink castle.

September 13, 2015 at 11:09 PM · California Adventure was right next to one of the world's most popular attractions. Many people visited for just Disneyland but California Adventure with its makeover offered a multi day trip at Anaheim with a substantial Disney park
September 14, 2015 at 5:53 PM · Someone mentioned the Hong Kong Disneyland opened after Eisner stepped down as CEO. Eisner was present at the park's opening and led the festivities.

They also said credit should be given to Eisner for the massive expansion the parks experienced under his leadership. No one has denied the expansion has been good for DIS stock. They have agreed with Iger that...

Hong Kong Disneyland -- opened with almost no eTicket rides, became instant brand withdrawal and continues so to this day despite small expansions

--DCA v1.0 was a brand withdrawal until entrance entirely rebuilt, Little Mermaid added and Cars Land added. Some still feel park lacks eTicket rides
--Disneyland Park (Anaheim) fell into disrepair -- leadership team, Presser and Harris fired and backlog of repairs/maintenance implemented

--Disneyland Paris fell into disrepair and, again, financial hardship. Financial stability restored with WDCo as only lender and backlog of repairs/maintenance currently on-going. Lack of new eTicket rides has made the park a brand withdrawl
--Paris Studios -- opened with no eTicket rides, added Tower and Ratatouille, but still considered a brand withdrawl

--Animal Kingdom -- opened lacking eTicket rides, eTicket ride added, but park still lacks attractions to make this park an all day ticket
--Hollywood Studios -- opened lacking eTicket rides, eTicket rides added, but park still lacks attractions to make park an all day ticket

Iger and the WDCo board has agreed to a massive investment in Paris (have a contractual obligation to buy the resort), WDW is seeing a massive investment, Disneyland Resort Anaheim saw a massive investment and will see another massive investment, Hong Kong is in limbo pending Shanghai launch.

Looks like under Iger's leadership, he's done A LOT of clean-up!

BTW...
Shanghai negotiations were started under Eisner!
The Marvel purchase was first floated under Eisner's regime.
Eisner also struck the ORIGINAL Lucasfilm licensing deal.

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