Disney: Losing Magic in the Middle Kingdom
DISNEY: LOSING MAGIC IN THE
MIDDLE KINGDOM
Hong Kong Disneyland will provide guests with an immersive experience to re-ignite “the magic that is the Disney storytelling tradition”. The park will act as a springboard for our other businesses throughout China and the region. - Andy Bird, president of Walt Disney International, August 20051
Three years after its opening in September 2005, Hong Kong Disneyland had yet to gather sufficient momentum to catapult its attendance rate to a satisfactory level. Despite high expectations of it as a cash-cow tourist attraction, things had turned rocky, with a series of negative media coverage both before and after the launch. The park suffered a major blow after a ticketing hiccup during the Chinese New Year in February 2006, when many mainland tourists with valid tickets were barred from entering due to overcrowding, causing a chaotic scene in front of the TV news cameras.
The attendance rate declined rapidly thereafter. Even though tremendous effort was made to lure back the crowd, no spectacular improvement was recorded. Factors such as the park’s small size, inconvenient location, lack of unique features, insufficient appeal to adults and missing Chinese elements were cited as possible causes. The poor financial performance had attracted much public attention, since the government owned a 57% stake in the park. In 2008, the Walt Disney Company (“Disney”) was negotiating with the Hong Kong government for additional capital injection to build more attractions. However, it was imperative for the management to find out what went wrong in the first place, and what should be done to turn the tide.
1
Landreth, J. (31 August 2005) “Hong Kong Disneyland Opens with Wealth of Challenges—Mouse Meets Mao”, Hollywood
Reporter, http://www.hollywoodreporter.com/hr/search/article_display.jsp?vnu_content_id=1001051279 (accessed 11 June
2008).
Penelope Chan prepared this case under the supervision of
MIDDLE KINGDOM
Hong Kong Disneyland will provide guests with an immersive experience to re-ignite “the magic that is the Disney storytelling tradition”. The park will act as a springboard for our other businesses throughout China and the region. - Andy Bird, president of Walt Disney International, August 20051
Three years after its opening in September 2005, Hong Kong Disneyland had yet to gather sufficient momentum to catapult its attendance rate to a satisfactory level. Despite high expectations of it as a cash-cow tourist attraction, things had turned rocky, with a series of negative media coverage both before and after the launch. The park suffered a major blow after a ticketing hiccup during the Chinese New Year in February 2006, when many mainland tourists with valid tickets were barred from entering due to overcrowding, causing a chaotic scene in front of the TV news cameras.
The attendance rate declined rapidly thereafter. Even though tremendous effort was made to lure back the crowd, no spectacular improvement was recorded. Factors such as the park’s small size, inconvenient location, lack of unique features, insufficient appeal to adults and missing Chinese elements were cited as possible causes. The poor financial performance had attracted much public attention, since the government owned a 57% stake in the park. In 2008, the Walt Disney Company (“Disney”) was negotiating with the Hong Kong government for additional capital injection to build more attractions. However, it was imperative for the management to find out what went wrong in the first place, and what should be done to turn the tide.
1
Landreth, J. (31 August 2005) “Hong Kong Disneyland Opens with Wealth of Challenges—Mouse Meets Mao”, Hollywood
Reporter, http://www.hollywoodreporter.com/hr/search/article_display.jsp?vnu_content_id=1001051279 (accessed 11 June
2008).
Penelope Chan prepared this case under the supervision of