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Hong Kong Disneyland Slump Prompts Layoffs

April 16, 2016, 11:34 AM · Attendance is falling at Hong Kong Disneyland... and the park is laying off workers as a result, according to local reports.

"Dozens of employees" are said to be losing their jobs, as Hong Kong Disneyland deals with a 9 percent drop in attendance in its most recent fiscal year. (A Hong Kong official confirms the layoffs in this press conference transcript.) Hong Kong Disneyland reported a HK$148 million (US$19 million) loss in that fiscal year, which ended in October. It was the park's first loss since 2011, when the park achieved profitability for the first time after years of losses following the park's 2005 opening.

Analysts blame political unrest in Hong Kong and a weakening Chinese economy for an overall drop in tourists visiting the city. As one of the more popular tourist attractions in Hong Kong, Disneyland bears much of the consequence of that decline. And that's before June's opening of the much larger Shanghai Disneyland, which could further reduce the number of mainland Chinese visiting Hong Kong Disneyland.

Hong Kong Disneyland will open Disney's first Marvel-themed ride, Iron Man Experience, later this year, along with a third on-site hotel, Explorers Lodge, for 2017.

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Replies (25)

April 16, 2016 at 2:17 PM · Hong Kong Disney is a problematic park. Hong Kong's dollar is tied to the US dollar, so as the US dollar has strengthened, tourism there has dropped. Development in China has focused on the Mainland, so Shanghai and Beijing are strengthening in comparison to the once more powerful Hong Kong, leading to less business tourism.

Also the park was obviously underdeveloped initially and faced bad word of mouth, something they have tried to rectify with fantastic new attractions. Finally, with Shanghai Disney opening soon, I fear drops in attendance will only increase.

The park as it now stands is pretty good, with unique attractions (and the benefit of smaller crowds). Hong Kong is also a fantastic place to visit, with a mix of the more traditional Chinese with the colonial side of the British control. Its not as sterile an environment as Singapore, but more comforting for westerners than many other Asian cities, its well worth a visit

Maybe as a pan-Asian theme park tour your could do Shanghai, Tokyo and Hong Kong Disney, with Tokyo Singapore Universal. Hmmmm, maybe one day.

April 16, 2016 at 2:53 PM · That doesn't bode well for the second Disney theme park opening soon in China.
With Disneyland Paris beeing a non profital resort forever and dw offering 30% off and free diner plan options for their high season this summer the mighty mouse is having a tough time to keep investors happy.
April 16, 2016 at 3:22 PM · Sigh...
April 16, 2016 at 3:43 PM · It will be interesting to see if Shanghai cannibalises Hong Kong attendance.

I always thought HK was an odd choice to put a disney-grade theme park. Typically A level, and even the better B grade parks look for plenty of expansion possibility, something which I imagine Hong Kong was always going to struggle to deliver.

April 16, 2016 at 3:44 PM · (Duplicate)
April 16, 2016 at 3:55 PM · I can already smell more budget cuts at our domestic parks in the near future.... Honestly what's sad is the fact that basically all of WDC's overseas parks are failing with the exception of Tokyo Disney. HKDL, DLP, and WDS are rapidly losing revenue and attendance. On top of that, Shanghai Disney is way over budget and could face the same fate as HKDL considering that China's economy is slowing. Hope everyone's ready for more budget cuts. #Thanksshanghai #ThanksHKDL #ThanksDLP
April 16, 2016 at 7:44 PM · Seems like the only Disneyland Park doing well overseas is Tokyo. Every other market is underperforming. If I were Hong Kong Disneyland, I would make a few big changes. Swap out the embarrassing little Aurora castle for something more grand. Beauty and the Best castle comes to mind at double the size. Build it with a Beauty and Beast attraction/ride and Be My Guest restaurant. Replace Main Street with a British version. The American Main Street is out of place in former British territory Hong Kong. Build the second park with Avatar and Star Wars Land.
April 16, 2016 at 8:39 PM · Looking at Google Maps, it's plain to see that HKD has a LOT of room for expansion. The question is will they spend the required money to use that land in a way that makes the park profitable again? Is it worth it? It takes money to make money, but I'm not sure HKD is ready to spend it, especially after they opend three new lands, which helped, but only temporarily.

I believe SDL will canibalize Hong Kong's attendance. Shanghai and Beijing are the two biggest cities in the country, and Shanghai is a lot closer and easier to get to than Hong Kong. No customs and border crossing, too! Not to mention Hong Kong's weather in the Summer is worse than Orlando, whereas Shanghai is rather pleasant. Think Miami vs Savannah, GA.

With that said, if you haven't been to HKDL, there is no rush. It'll always be a fantastic 3/4 day park with virtually no lines.

I'll write a small review on Iron Man Experience after it opens, though I doubt it'll move the needle attendance-wise.

April 17, 2016 at 2:47 AM · Great suggestions Anon mouse. HKDLand along with CA adventure and Hollywood studios was poorly planned and done on the cheap. Why Disney has made that mistake 3 times is baffling.
April 17, 2016 at 9:16 AM · HKDL is being squeezed in two different directions. Mainland tourists are decreasing rapidly as China's economy sputters, mainlanders have more options abroad and on the mainland for tourism including Shanghai Disneyland, and mainlanders just got tired of the hostility from Hong Kong residents. On the other hand, HKDL is losing the locals battle to Ocean Park, which is seen as a "genuine" HK park, and not some kind of cultural interloper, as well as the lingering bad taste from its somewhat stillborn opening. Disney should have built this park on Australia's Gold Coast as they originally planned. I wouldn't be surprised to see HKDL continue to atrophy until it eventually shuts down at some point in the future.
April 17, 2016 at 2:38 PM · When it comes to #ThanksDLP I hope it is aimed at the DLP management for not building new attractions in the park for 10 years now and the WDC for building a less then mediocre half day Studios park not worth a second visit.

I can already see the commercials for the 25th celebration next year:

“25 years of Disneyland Paris! Come visit us, everything is finally painted and as clean the way a Disney Park should be and what you are paying for! We have nothing new to offer, but come see the working attractions again!”

Think about it: Disney's California Adventure was completely redone, WDW got New Fantasyland and gets Pandora and Star Wars, which is also coming to DL, Hong Kong Disneyland has gotten amazing attractions and don't get me started on Shanghai …

What does Disneyland Paris get? New paint. Working attractions and effects.

Other european parks invested AND did their ongoing refurbishments.

So maybe the tagline should be: #ThanksDisneyManagement.

April 17, 2016 at 3:07 PM · Hong Kong Disneyland has had problems from day one and no matter what Disney does it seems that they can't get the park to work. I can't say for sure, but I have to think the biggest problem is that the park just doesn't have much to draw visitors. Not only is it the smallest of the Magic Kingdom parks, but very few attractions are not cloned from another park and with the number of knockoff Disney parks scattered around China there just isn't enough to justify a special trip to Hong Kong. Shanghai Disneyland appears to address a number of these problems, with many original attractions and basing cloned attractions mostly on more recent rides Chinese visitors likely haven't experienced elsewhere, plus the park was designed from the ground up to appeal to the Chinese demographic instead of just dropping in things that worked at other Disney parks. I do hope the park is successful, but I do wonder if it is possible for Shanghai and Hong Kong Disneylands to coexist. Perhaps if Hong Kong installs only original rides going forward and adds a quality second park it may succeed, but right now it appears to be doing about as well as DCA 1.0 would have done without Disneyland.
April 17, 2016 at 7:47 PM · #Thanksshanghai
I think this is a lot more to do with Shanghai DL going MASSIVELY over budget than HKDL itself suffering from a lack of attendance.

I know you said Disney already budgeted for Shanghai DL's budget issues by postponing Star Wars Land. But that's not how I remember it. I remember Star Wars Land was pushed back because MyMagic+ was going massively over budget. You see how MyMagic+ costed Jay Rasulo's job and now Shanghai DL is costing Tom Staggs job. There is a pattern.

Now every Disney owned property has to find money to foot Shanghai DL's bill.

Anyway, HKDL will re-hire again when Iron Man Experience and Disney Explorers Lodge open, both happening in the coming year.

April 17, 2016 at 9:40 PM · Other than Disney Hollywood Studios Paris, this park was Disney's biggest mistake. Instead of improving the original version, this Disneyland is a copy of the Anaheim version with some changes, most of them to save money. With the exception of Japan, Disney has failed to meet expcations they established in the U.S. They need to spend time and money to fix this. Once all this happens then they can think of opening more parks. Cars Land would be a good addition to Honk Kong. It would set it apart form Shanghai and Japan without having to without having to design a new land.
April 17, 2016 at 11:23 PM · Sitting in a country of one billion residents, this park should be wildly successful. I guess Mystic Manor just wasn't enough, despite being (reportedly) a great ride.

Disney needs to stop their overseas misadventures and focus on maximizing the potential of their domestic parks. And it's certainly a slap in the face when they make cuts stateside just to pay for their foreign mistakes.

April 18, 2016 at 8:10 AM · "mainlanders just got tired of the hostility from Hong Kong residents"

The mainlanders are the most horrible tourists you can imagine. Their bathroom habits are so 10th Century. They will go on the street if they have to.

April 18, 2016 at 11:40 AM · ThanksBobIger# Iger is a network executive. He has zero understanding of the theme park business.

How bad does Iger need to screw up before the board fires him? MyMagic+, Shanghai Disneyland, throwing good money after bad in Paris and Hong Kong.

Bob Iger should be fired. Hong Kong Disneyland should be closed.

April 18, 2016 at 2:17 PM · Maybe Disney will build a 3rd Chinese resort now. They seem to build more and more despite poor performances from foreign parks. Meanwhile us in the US get exponential price increases. Crazy. Tokyo is by far the best disney parks value at $50-$70 per day.
April 18, 2016 at 2:44 PM · Sylvain - I agree with you 100%. All I have to say is Tomorrowland Anaheim... need I say more? With the greatest waste of space - the Innoventions building, Space Mountain with a queue that resembles a mall from the 1970's, an abandoned elevated track for Rocket Rods, and some steam punk touches here and there. If you ask me, Tomorrowland should be an embarrassment for TDA.
April 18, 2016 at 9:24 PM · With all due respect to the previous anonymous post, Hong Kong Disneyland, Shanghai Disneyland and Disneyland Paris were all decisions made by Eisner not Iger who made the call on My Magic plus.

Before people criticize the current state of Disney theme parks, please Do you homework to see who created the mess in the first place.

Yes Eisner was aggressive in expanding Disneyworld until Disneyland Paris opened and then he became as timid as mouse.

April 19, 2016 at 6:23 AM · Yeowser,

Bob Iger has been Disney's CEO for 11 years now. The Shanghai Disney agreement was signed 5 years after Iger became CEO. The original Shanghai budget was $3.75 billion. After massive budget overruns, the cost of the Shanghai project is now close to $6 billion. That's $2 billion wasted due to a failure of planning and control on Iger's part. If Shanghai Disneyland fails, that is 100% Iger's fault, not Eisner's.

MyMagic+ reportedly cost $1.5 billion. MyMagic+ is 100% Iger's fault.

Eisner does bear initial responsibility for the failures at Paris and Hong Kong, but Iger has compounded those mistakes by throwing good money after bad. Mystic Manor has not fixed the problem that is Hong Kong Disneyland. Iron Man Experience will not fix Hong Kong Disneyland either. Disneyland Paris continues to flounder despite Ratatouille and other additions. Meanwhile Disney World Orlando has not opened an e-ticket attraction since Expedition Everest 10 years ago.

Iger has coasted on Disney's natural strengths. Iger's policies are based on short term profit maximization. Disney's long-term success relies on customer goodwill and employee morale. What is the current state of employee morale? What is the current state of customer goodwill toward Disney? It's time for Iger to go. Spin off the TV networks. Let Iger run that, and give Disney back to the people who care.

April 19, 2016 at 8:21 PM · http://www.hollywoodreporter.com/live-feed/castle-stana-katic-exit-season-885130

Even ABC studios is cutting costs now. "Castle" without Stana Katic, unthinkable. So it is the whole Disney empire doing it, not just HKDL.

Eisner might have started MyMagic+, but Jay Rasulo was assigned to get it up and running. He mismanaged and the costs overruns are his fault, so they fired him.

Same with Shanghai Disneyland, Bob Iger signed the deal but Tom Staggs was assigned to get it built within budget. Staggs failed so he got the chop.

The boss has a vision and a manager is assigned to turn his vision into reality within a certain budget. It is not the boss' fault if the manager fails at his job.

April 20, 2016 at 9:45 AM · Whatever happened to "The buck stops here"? Whatever happened to CEO accountability? Iger chose Rasulo. Iger chose Staggs. Iger greenlighted MyMagic+. Iger greenlighted Shanghai Disney. If Iger is not responsible for massive company-wide systemic failures, then who is? If Iger is not responsible, then why is he being paid like he is?
April 21, 2016 at 8:45 PM · Bob Iger's fate should be for shareholders and board of directors to decide. If you own DIS shares then you should vote for his firing.
April 23, 2016 at 11:24 AM · @ 59.148.208.39

Here's the essence of your argument: "might makes right; the public be damned." Is that the kind of country, you want to live in?

Disney shareholders should remember the words of Edmund Burke: "Magnanimity in politics is not seldom the truest wisdom; and a great empire and little minds go ill together."

Disney relies on goodwill. Short term profit maximization at the expense of customer satisfaction is destroying that goodwill.

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