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What does Hong Kong Disneyland need to reverse its slide?

February 20, 2017, 2:02 PM · Disney's planned billion-dollar expansion of Hong Kong Disneyland can't come soon enough, given the park's recent financial performance.

The park last year posted its eighth annual loss in its 11 years of existence, with attendance in 2016 dropping to 6.1 million visitors. That's down from 6.8 million in 2015 and from 7.5 million in 2014 — Hong Kong Disneyland's all-time best annual performance. Last year's attendance at Hong Kong Disneyland was the worst for the park since 2011, when it drew 5.9 million visitors.

For comparison with Disney's other "Magic Kingdom" parks, Walt Disney World's Magic Kingdom drew 20.5 million visitors in 2015, the latest year for which full data is available. Disneyland in Anaheim welcomed 18.3 million visitors that year, with Tokyo bringing 16.6 million, and Paris 10.4 million. Shanghai Disneyland appears to be on track to draw around 12 million visitors in its first year of operation, based on visitor numbers to date. Among all Disney theme parks, Hong Kong Disneyland is beating only the Walt Disney Studios Park in Paris, which drew 4.4 million visitors in 2015.

The problems in Hong Kong and Paris are not limited to Disney. The November 2015 attacks in Paris led to a sharp decline in tourism in that region, and a strong Hong Kong dollar versus the Chinese yuan has made that destination less attractive to visitors from mainland China. Hong Kong Disneyland lost 600,000 visitors from in the mainland in 2016 versus 2015, accounting for almost all of the 700,000-person decline in attendance between the two years.

Hong Kong's population is just under 7.2 million people, so Hong Kong Disneyland can't rely on its domestic audience to propel it to the attendance levels enjoyed by Disney's other Magic Kingdom parks. Hong Kong Disneyland needs international visitors, and with the one-two punch of a currency disadvantage against the yuan and competition from Shanghai Disneyland, it's unlikely that those visitors will be coming from mainland China anytime soon.

To entice more international visitors, Hong Kong Disneyland is adding a Frozen-themed land in 2020 and a major new Avengers-themed attraction in 2023. In the meantime, the park will change its Buzz Lightyear ride to a Marvel-themed shooter, build a Moana theater in Adventureland, and re-top its short, Anaheim-style castle to make it taller and more visually impressive. To house those international visitors, the park is opening its third on-site hotel, Disney Explorers Lodge, which opens April 30.

But will that be enough? Right now, Mystic Manor is the park's only major, unique international draw. The Big Grizzly Mountain Runaway Mine Cars provide another strong attraction, but it's not one unique enough from Big Thunder Mountain or Expedition Everest to draw fans who've ridden Disney's other mine-train roller coasters. And the recently opened Iron Man Experience might be Disney's first Marvel-themed ride, but it runs on a Star Tours-style ride system that many fans have experienced countless times already.

Given the relative ease with which many international visitors can enter Hong Kong versus Shanghai, Hong Kong Disneyland has a logistical competitive advantage over the newer, bigger Shanghai Disneyland park. But if we're talking about competition for international theme park fans in (or traveling to) Asia, Hong Kong Disneyland is going to have a hard time luring Disney and theme park fans away from the widely beloved Tokyo Disney Resort.

Hong Kong Disneyland needs to find a niche — whether that's pricing value, unique attractions, or just a clever marketing campaign — that allows it to prosper along with Shanghai, Tokyo, and even Anaheim in drawing visitors from throughout east Asia and the Pacific rim. And, given its recent financial slump, it probably needs all three.

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Replies (31)

February 20, 2017 at 2:35 PM · GREAT use of facts to support a well thought out presentation!
February 20, 2017 at 2:36 PM · Horrible, small park. Go look at the pitiful attempt at Toy Story Land - and you'll be nervous about what they might do at DHS.
February 20, 2017 at 2:36 PM · Have you ever noticed that all international Disney parks fail/have failed. Oddly the only ones that have worked from beginning to now is the 2 parks that Disney doesn't own.
February 20, 2017 at 2:45 PM · Hong Kong Disneyland needs a massive new attraction. Either Carsland or Star Wars Land. Marvel or Frozen won't add much to the mix. The park should also take advantage of the evening crowds that seem to descend upon downtown Hong Kong in massive numbers. Stay open longer with evening passes and offer evening foods like a night market.
February 20, 2017 at 2:51 PM · What Disney should try to do is offer discounted tickets or even a free day for Passholders from other Disney parks as long as they stay at a hotel on property. That way people have an incentive to visit and those pass holders like myself are usually die hard Disney fans so we would jump on that opportunity. With the contingency of them needing to stay on property they still get money from hotels and any food and merchandise these pass holders buy. And of course the popularity would then spread quickly through word of mouth.
February 20, 2017 at 3:11 PM · I think Disney's biggest problem with its International Magic Kingdom parks is that they're more or less cut copies of the same park. Except for absolute Disney fanatics (and I admit there are a lot), there's no reason for a visitor to want to go to different parks... If I'm a UK visitor, its not "should I visit Paris and Florida", its one or the other... with Florida likely winning that.

I imagine something similar is true in South East Asia. With the exception of Chinese tourists (I understand that, despite the large number of Chinese students and tourists, that its actually quite tricky to get permission to leave China, which means Shanghai is likely the only viable option), you've got the decision of Hong Kong and Tokyo... is there any reason you'd choose HK over Tokyo?

February 20, 2017 at 4:40 PM · Add a Downtown Disney, another hotel a new attraction every year, big or small just keep them coming. And, heavy promotional events. By-the-way, why did they close Autopia so early?
February 20, 2017 at 4:39 PM · Chad, I have to disagree. As an international traveller, the decision between which park you want to go to isn't based on which park is better, but which is in a more desirable location (unless the theme park is the primary reason for the holiday).

When choosing between Paris and Florida, many people would much rather travel to Paris and spend a day or 2 at the parks (unless they simply want to go to the parks, or they want a warm weather resort style holiday.

That is Hong Kong Disneylands current dilemma, Hong Kong is no longer as desirable place to visit. Part of that reason is the tying of their dollar to the US dollar making it relatively expensive, another reason is the development of Shanghai as an alternative

One thing HK Disney can do is to try and increase its appeal to locals, who still tend to favour Ocean Park.

February 20, 2017 at 5:00 PM · If you look at the other articles that the reporter in the South China Morning Post wrote about HKDL, you can see that Disney is not seen favorably by locals who refer to the HK government's original agreement with Disney as "unequal," which echoes the post-Opium Wars unequal treaties that China was forced to sign by Western powers in the 19th century. Disney is seen as heavy-handed by HK locals, who view Ocean Park as their local, hometown park. Mainlanders don't like how they're treated by HK locals and now have a bigger and better park in Shanghai. For international visitors, HK has lost its allure as a tourist destination to Singapore, Tokyo, Phuket, Bali, etc. Post-1997 handover, HK has been receding in profile and image into 'just another big city' in China. In the end this is Eisner's folly for desperately wanting to be near the China market after being rebuffed by China for the Kundun film controversy and blocked from Shanghai, which was always the true prize destination for Disney. HK legislators and citizens are balking at the big price tag for a HKDL expansion, though they have no choice but to continue to throw money at the park. Closing it down would be a surrender to HK's archrival, Shanghai, and signal the end of HK's aspiration to Asia's "global city" (HK government's failing PR ploy to maintain international relevance). In the end, the HK government will ask Disney to put up more of the funding for the expansion and take a bigger, probably majority, stake in the park. Further into the future, HKDL's prospects appear bleak not due to it being a bad park, but due to the structural and historical environment enveloping it.
February 20, 2017 at 5:33 PM · It makes no difference, if Disney "invests" 1 billion dollars or 5 billion dollars. Hong Kong D.L. is not fixable. Pull the plug. If Iger sinks another billion into that park, it will be Iger's folly, not Eisner's.
February 20, 2017 at 5:44 PM · I think it is a similar problem with Shanghai. If you can afford to go to a Disney Park, why not Tokyo, Anaheim, or Florida?
February 20, 2017 at 6:00 PM · "To entice more international visitors, Hong Kong Disneyland is adding a Frozen-themed land in 2020 and a major new Avengers-themed attraction in 2023." And once again, Disney refuses to even consider building something original. If it can't be tied to an existing franchise, they want no part of it. Ticks me off.
February 20, 2017 at 7:21 PM · Maybe Disney can sell "park hopper" tickets so guests can visit both the Shanghai and Hong Kong parks. They should create a vacation package that includes airfare between the 2 parks, hotels and tickets.
February 20, 2017 at 7:52 PM · Is it possible that this may be the first Disney park to fail and close? And or be sold and/or be re-branded as not a Magic Kingdom? With continued expansion of the parks, odds are that this will happen at some point.
February 20, 2017 at 8:11 PM · I can only imagine their dilema with this park. Spend a lot of money and hope it turns its fortunes around, but no sure thing. Scary. I bet some people's jobs are on the line with this.

I think even after the $1.4b expansion and upgrades, HKDL will likely see a modest spike in attendance, followed by a return to the norm, but that is dependent upon the Chinese yuan.

My wife and I used to live an hour from Hong Kong, and it's a fantastic city. But they gave her a hard time at customs, taking her to a room to question why she was going. Very stressful, and so we didn't go very often.

Not to mention, it's expensive, and you need to convert your money, and to a lesser degree, Chinese who don't speak Cantonese may feel a little uncomfortable, it's just easier to go to Shanghai, which is newer and bigger, anyway.

I think the expansion and re-topped castle will be awesome! But I don't really think anything will turn the park around long-term.

I would like to see a Downtown Disney area. Chinese tourists iften come (came?) for the shopping, so throw in some great restaurants and high end stores, and that'd help the cause.

On that note, it is kind of a hassle to get from the Shenzhen customs area to HKDL. The subway is great, but there is no direct route. If HKDL wants to lure mainland Chinese, they should have a dedicated transport from customs. Even just once in the morning, and a return at night - a little like the buses that go from Orlando, directly to Busch Gardens Tampa.

Remove the hassle. Maybe implement some Magic Band that can be loaded with yuan, and used in the park.

Good luck! I'll go back in a few years, to see the castle and Frozen land. It'll be interesting.

February 20, 2017 at 8:21 PM · Only 6 million per year! This is the place to be!
February 21, 2017 at 12:00 AM · Honestly, I think the best option for Hong Kong would be to stabilize attendance, then do what is necessary to make the park work with the attendance they're getting. Unlike the other Disney resorts, there has never been much of a reason for anyone outside of the area to visit Hong Kong Disneyland unless they were already visiting Hong Kong for other reasons. Now that Shanghai Disneyland exists, there is even less draw to Hong Kong Disneyland for anyone that lives more than a few hundred miles away. The new attractions won't work as a long term solution...this park got a couple years of boosted attendance from building three mini-lands, but then everything started to decline again. To me, there's no reason to believe that history won't repeat itself.

I want to see Hong Kong Disneyland succeed, but the traditional Disney model isn't working here. For this particular park, I think it would be in Disney's best interest to abandon the resort concept and treat this as a regional park, catering to day visitors and general Hong Kong tourists rather than people coming specifically for the park. Sell the hotels and focus any profits into creating more unique, one-of-a-kind attractions for this park. 6 million is still a ton of people...most regional parks see around half that number.

February 21, 2017 at 1:41 AM · I think they need to build a second gate over the esplanade from HKDL, on the expansion pad which is ready and waiting. Something totally unique (not a clone of another park... and definitely NOT a studios park). Something that will attract people from all over the region. It doesn't have to be huge (it can't be!). I think that the just have to think totally out of the box.
February 21, 2017 at 2:40 AM · Considering that Paris Disney only achieved 13.5mil in attendance with a massive French population and all the surrounding European population, I would have to say that Hong Kong Disney with such a small population is doing pretty well with its attendance.

I agree they should proceed with being just a regional Disney park. Small but with exclusive good rides. Let Shanghai be the big park it always wanted it to be. In terms of Disney atmosphere, Hong Kong nailed it, but seriously lacking in Shanghai.

February 21, 2017 at 2:50 AM · I wonder, is there opportunity for expansion or are they limited on land?
Because I wonder if they would shoehorn in Star Wars...
February 21, 2017 at 6:57 AM · Greetings to all the previous posters.

I am currently living and working in Hong Kong.

So I would like to respond to some of the previous comments.

RE: Anton M

The evening crowds are not going to go out of their way to go to a night market at HKDL when there are many night markets all over Hong Kong much closer to their home.

HKDL is kind out of the way for local and even tourists even though it is along the way to and from the airport. Despite a dedicated subway line to HKDL, its not inexpensive and can be quite time consuming even for locals to make a quick stop there.

A return trip there and back on the subway for many is equal to an inexpensive lunch or dinner. Why bother just to go there for a night market if there are more cheaper options close to home.

RE: Chad H

Agree. The Chinese who can afford to travel outside of China by air are in many cases are the ones who can afford to visit Tokyo and Paris.

RE: Stevo B
As long as the HK government has a majority stake in HK Disneyland, they will not let it close or fail.

RE: Gabriel Schroll

HKDL should get a more direct transportation link from the border checkpoints between it and China.

It indeed can be a hassle to get to HK Disneyland from Shenzhen customs area, but did you try to cross at all the 5 border crossings (plus a 6th along the way) between HK and Shenzhen. Some are not as cumbersome (the ones connecting directly to HK subway can indeed be!)as the others.

What they could or should do IMHO is build a ferry terminal near HKDL and establish a direct high ferry link between it and ports in Guangdong province, China closest to HKDL.

RE: AJ Hummel

Abandoning the Resort Concept and scaling down is not a good idea especially with Ocean Park building two hotels onsite plus a water park and evolving into a resort.

Plus most of the large scale amusement parks just across the border in China in Guangdong province are full fledged resorts with multiple hotels and have plans for future expansion.

Ceding the resort concept to its immediate competition is just not a good idea for HK Disneyland.

Most of the millions of people in HK leaving HK for their holidays or vacation. HK Disneyland caters primarily to tourists.

RE Kelly Muggleton

There is opportunity for expansion and they are not limited on land.

The current land allocated for HKDL including space for HKDL is over 300 acres which is about 1/3 of Shanghai Disneyland.

HKDL currently only occupies less than half the space allocated to them plus there is talk of land reclamation to increase land for them.

IMHO, what they need to do or could do is also build a water park, a downtown Disney like Stevo B and Gabriel stated but ultimately a 2nd gate hopefully one day.

February 21, 2017 at 7:34 AM · Thank you Yeowser - its good to hear from somebody local who has a clear view.
Lets hope they can do something, its definitely a park I would like to attend myself!
February 21, 2017 at 8:47 AM · Yeowser: Good insight, but I was saying "offer evening foods LIKE a night market". It won't be a substitute or replacement. It will be offering what many people are familiar with and offering Disney as an alternative evening entertainment. Disney in Anaheim and Orlando have both installed Festival Food Booths to cater to people's need to try out different cuisine. They can easily offer this concept in Hong Kong since it is familiar.

Of course it won't be cheap. Disney isn't cheap in the states. The many people who buy Annual Passports spend a lot of money for the priviledge and pay the $20 to park in the lot so they aren't getting there cheaply. They come from all areas so the traffic and distance is a hassle especially in Southern California.

Disney is a habit for many people. This habit can be managed in Hong Kong if Disney chooses to cater to it.

February 21, 2017 at 11:32 AM · You know that theme park feasibility expert's credo about the entertainment industry in general !?
It's about location, location, location...
It's the ONE thing, you cannot change afterwards ...
( ...//... )
February 21, 2017 at 11:36 AM · In response to grant crawford
February 20, 2017 at 4:39 PM

"One thing HK Disney can do is to try and increase its appeal to locals, who still tend to favour Ocean Park."

You are very right !

But Ocean Park again has the LOCAL favour of location. It's (rocky) connection to beach-life, almost directly from HK-central, does make it like a party centre, with that splendid ocean in front !!
Remember, a party is at it's best on an inspiring LOCATION.
Disney could transform it's park, at least in the evenings, as party place. But it would have to do it in a completely new "non Disney characters" style, because nobody on earth wants to go 12 times in a year to an evening party, to see Mickey Mouse jumping and screaming frenetically.... BAN all Disney characters in the pary evening, and program a year round continuously changing international music/dance/theatrical performances program. THAT's an option...

February 21, 2017 at 12:29 PM · Great input Yeowser. I think the idea of expanding to a second gate is an option, but no without (significant) risk.

I think it's a great opportunity for theme park fans around the world. HK Disney is a great Park with some incredible unique attractions (and more on the way), and about the quietest Disney experience you are likely too find. Hong Kong is a.wonderful place to visit with fantastic culture and history. It is also very accessible to Westerners; English is widely spoken, the people are generally quite friendly and due to its history there isn't as much "culture shock" as you would get visiting some other places (mainland China or Japan for instance). The food is great, and cheap. Accommodation is affordable.

I don't have any connection to HK, but have visited before and loved it. I think sone people on this site often get tunnel vision on the US parks, and broadening their horizons would be a wonderful thing. I would say the same thing for Singapore to, very similar in many ways.

February 21, 2017 at 1:04 PM · China is only for a very short time letting western influences into their park. Japan has a longer relation with the Disney brand.
But in the end, as with Disneyland Paris, the ammount of visitors won't make it a financial success. Disneyland Paris is the most visited theme park in Europe, year after year, but it only loses money. The reason is that a "theme park vacation" is not a thing outside the US. Per guest they will never pay for overpriced food, tickets, hotels and souvenirs. At best it will be a small part of a larger vacation when it has discounted prices. The Paris park is heavily discounted and I know no one who ever payed full price. Tourism is also pretty much dead outside the school vacations. There are laws prohibiting parents from taking children out of school for a theme park vacation. It will be a bottomless money pit forever.
February 21, 2017 at 6:55 PM · HKDL recorded HK$4.8 billion revenue and posted a HK$171 million loss. That's just 3.5%. A little more income and the park will make ends meet. This will happen with the Disney Explorer's Lodge opening on 30 April. It is very good for the park economically that the new hotel is able to open just before the Golden Weeks of China and Japan. Surely it will be hugely popular given the two current hotels enjoyed 97% occupancy during the Chinese New Year. The resort's future looks bright right now.
February 21, 2017 at 7:17 PM · Re Anton M

The HK government recently launched a 2 year food truck trial scheme rotating 16 food trucks at 8 different locations rotating every 2 weeks. One of the locations is outside HKDL.

Well received but the concern is whether it is sustainable due to lower foot traffic on weekdays as well as high start up costs because the HK government insisted all chosen operators to use new trucks in this pilot program.

February 21, 2017 at 9:02 PM · O T. not buying it. during, many times of the year, there are more foreign born people at the Disney Orlando parks, than American's.
Herwig. People, in southern California, and even from other parts of California. go to Disneyland, and calif adventure, and watch the parades/dance parties MORE than 12 times a year.
February 22, 2017 at 1:33 AM · RE: Kelly - HK Disneyland park itself has a few small expansion pads left, but there's not a lot of space to grow that park significantly (not enough for a Carsland, for instance). For the new Marvel attraction that's coming in the next few years they're having to remove Autopia, for example. However, there is a large plot of land opposite Disneyland Park which appears to be set aside for a second gate. If you look on Google Earth or Google Maps it's pretty clear. It's a great location, with very little additional infrastructure required as it can be served by the existing esplanade, bus stops, train station and hotel.

I'd love to see an alpine-themed park, which would probably be very exotic in Hong Kong. I'm thinking mountains, rivers, Matterhorn, maybe an indoor ski slope. Or maybe a next-generation water park.

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