Disney Parks Compete in Asia

Albert Cheng, columnist for the Hong Kong Economic Journal, asked some interesting questions about Disneyland Hong Kong in a recent article. In his column he notes the following:

• Last year, Hong Kong had 50 million visitors–a number to be envied by most any city in the world.
• Visitor spending in Hong Kong was up last year to 5.11 billion, the second highest since the park opened in 2005.

So why a HK$148 million loss?

He notes that the park is mediocre compared to the others worldwide. He contends that building a third hotel, rather than spending money on new attractions is not a good idea.

Finally, he makes note that Disney originally promised not to build anything else in the region. What is “the region” according to Disney is vague. 760 miles is the distance, so apparently that is outside “the region”. But 850 miles is the difference between Orlando and Washington DC, and they did finally concede that the park planned for that area could have eventually impacted attendance at Walt Disney World.

Still 50 million a year is enough to have people coming to your park–if there’s something to come visit. And that was my contention in my earlier article. There simply are not enough rides and attractions. They need more rides.

Still, there is another possibility here. Disney succeeded in getting the approvals and concessions it wanted with building Disney California Adventure, because it pitted that park against the possibility of building another park in Long Beach. It made cities compete. The same thing was done when Disney chose France over Spain. That effort allowed them to get France to build a train station right up to the front door.

It seems obvious to me that Disney’s playing this same game with its government partners in China. Increasing the ante with one park requires the government to go along with increasing spending at another park. Shanghai is big enough to probably convince Hong Kong government partners to build a second park. And when that gets built, Disney will convince those in Shanghai to do the same. In the end, the cycle will be never ending. Disney will create the massive parks it wants to build.

If there’s one piece of good news, it is that you as a guest will keep getting new reasons to come and visit. And that’s a pretty good thing.