I disagree with this. You are looking at HKDL too much in a microcosm (the problem with quarterly reports and the problem with only looking at the numbers). 2014 attendance as a whole was up, as was revenue.
The 2013 Winter quarter was coming fresh off the finished expansion, spending hadn't yet kicked off on Iron Man. Of course attendance was at an all time high and spending at a low.
2014 was a slower year for additions. Spending is up due to Iron Man AND the Third hotel having broken ground.
Euro Disney on the other hand is coming off a 2013 quarter when attendance was down year-on-year and spending was up due to Ratatouille.
It's easy for Euro Disney to look impressive when they set a low bar, and HKDL to look like it's struggling when they set a high bar, but neither tells the actual story.
Context is needed, not just the numbers.
The context is that Iger squashed an article that questioned Disney's China investments.
As we all know, an analysis of financial investments should not concentrate on numbers. After all, there is a "problem with only looking at the numbers".
Find me a CEO/CFO who doesn't act as the company's biggest cheerleader and I'll stop focusing on numbers.
Find me a financial analyst who doesn't focus on numbers and I'll show you someone with a seriously bad gambling addiction.
Disney (not me) reported that Hong Kong Disneyland's attendance is
down for the first quarter of fiscal year 2015 (which ended in December) while expenses are
up. Disney (not me) reported attendance elsewhere is
up for the quarter. Disney did not report, "We had a great 2014 so a decline in 2015 should be expected."
Don't heap DLP's 9% attendance gain on Ratatouille. Ratatouille is not that good.
There are other factors in play, both in Paris and in Hong Kong.
I readily admit that my post was not my usual attempt at being objective. (Can anyone ever express a thought that's truly objective?) What, my post's sarcasm wasn't dripping enough for you?
However, Disney is the one who said MyMagic+ is going to make up for Shanghai's shortcomings in fiscal year 2015.
Disney is the one who squashed an article criticizing what is happening in China. A day later, we get a puff piece in
Motley Fool singing the virtues of Disney's China investment. "Still an incredible new park", "Still in time for a record breaking 2016", "Still the first to open in Mainland China". Who wrote this; Bob Iger himself? This is not a coincidence; this is spin.
I actually
like Disney's play in China. I think it's a good move by the company. Disney is not a well-established brand in China. A successful theme park in Shanghai could open opportunities that pay dividends across all business segments.
However, there are risks. The business climate in China is different than Disney’s traditional environments while other companies are fighting for the same emerging Chinese consumer market. Disney will have to play by a different set of rules. Disney will have to compete. It won’t survive using its usual “We’re Disney” strategy.
Perhaps more importantly, Disney is playing a very distant second fiddle to the totalitarian Chinese government. Ultimately, they are the one calling the shots and can crush Disney at any time. "Thank you very much for investing billions. Now that the infrastructure is built, we've decided our people don't like the Disney brand. We've decided to use our own IP. Oh, unless you hand over another 10% of profits." In order to survive, Disney will have to learn to say, “Thank you sir, may I have another” in a way it never has in the past.
The reality is that Shanghai is causing Disney headaches right now. The reality is that the project is behind schedule and, as anyone who has managed a project knows, being behind schedule usually means being overbudget. It's cause for concern; not cause for panic.
My concern is not what’s happening in China; it’s that Iger seems to have developed the same thin skin Eisner had before his downfall.
This sorry episode reminds me too much of Eisner's bad years, when Eisner was more focused on crushing dissent than on running the company.