Hong Kong Disneyland to Miss Attendance Targets
By GEOFFREY A. FOWLER
September 4, 2006 9:09 a.m.
HONG KONG -- Hong Kong Disneyland all but admitted it would miss attendance targets for its first year of operations, following a slow start and marketing challenges.
The first Walt Disney Co. park in China had received "well over five million guests" since last summer as of Monday, said the park's managing director, Bill Ernest. Avoiding repeated questions from reporters about the company's publicly stated target of 5.6 million visitors by Sept. 12, he said the park would reach that total later in September or October.
The park's first year has been a roller coaster ride for Disney. The park opened amid a swirl of public relations glitches and faced serious difficulty controlling crowds during the Chinese New Year holiday. "Like all new ventures, there have been teething problems and adjustments," Mr. Ernest said.
Most of the time, however, Disney's problem hasn't been too many visitors, but too few. Park officials have been tightlipped about performance, irking some legislators in Hong Kong's government who questioned why the city paid $417 million on top of $1.74 billion in infrastructure costs for a 57% stake in the operation. Disney paid $314 million for its 43% stake in the venture.
Hong Kong Disneyland's performance has also been watched by Wall Street as a gauge of Disney's prospects in mainland China, a market the company hopes to tap for growth. Disney is investing in its consumer products, television and motion picture businesses in China, and is in talks with the government about building another theme park in Shanghai.
Mr. Ernest found himself playing defense again with Hong Kong reporters at the first-year briefing Monday. He said the five-million-plus attendance figure included so-called "familiarization" tickets, given out for free to build buzz about the park within the travel industry, but he wouldn't specify what percentage of the visitors got in free.
Mr. Ernest also declined to offer attendance targets for the coming year or to disclose any specific details of Hong Kong Disneyland's financial performance, saying only "we are on very solid ground financially."
He admitted that Hong Kong Disneyland had gotten off to a slow start in its first year of operation but said it was making progress. "There were some marketing glitches in the early days, but we are very encouraged that all major indicators suggest that we are moving in the right direction," he said.
Business, particularly from mainland China, picked up considerably over the summer school holidays, he said.
Since opening, Hong Kong Disneyland has gone through considerable turnover in senior management, with Mr. Ernest taking over as managing director in January, followed by new senior executives in sales, marketing and public relations. Mr. Ernest said the park has changed the way it works with the travel industry and the way it markets itself in mainland China. Moreover, he said Disney has learned more about how to translate its American content to Asian audiences.
"The Asian culture and the Disney culture coming together has taken us a while to figure out," he said. "If you haven't grown up with the park or characters in the park, you're not sure what you are walking in to. We realized we needed more educational material out in the marketplace."
The park is now preparing a 10- to 15-minute "pre-show" that visitors could watch after they enter to explain "how the stories and characters knit together," he said.
Mr. Ernest downplayed any disappointment with the attendance figures. "As we built our original projection, we really had no history in this market," he said. On the other hand, Hong Kong has become a much more popular attraction for mainland tourists since Disney first announced its 5.6 million attendance target in 2002. At that time, Chinese could visit Hong Kong only in tour groups, but the government began to allow individual tourists into the city in 2003. Today, they make up the bulk of the city's visitors.
Write to Geoffrey A. Fowler at geoffrey.fowler@wsj.com
By GEOFFREY A. FOWLER
September 4, 2006 9:09 a.m.
HONG KONG -- Hong Kong Disneyland all but admitted it would miss attendance targets for its first year of operations, following a slow start and marketing challenges.
The first Walt Disney Co. park in China had received "well over five million guests" since last summer as of Monday, said the park's managing director, Bill Ernest. Avoiding repeated questions from reporters about the company's publicly stated target of 5.6 million visitors by Sept. 12, he said the park would reach that total later in September or October.
The park's first year has been a roller coaster ride for Disney. The park opened amid a swirl of public relations glitches and faced serious difficulty controlling crowds during the Chinese New Year holiday. "Like all new ventures, there have been teething problems and adjustments," Mr. Ernest said.
Most of the time, however, Disney's problem hasn't been too many visitors, but too few. Park officials have been tightlipped about performance, irking some legislators in Hong Kong's government who questioned why the city paid $417 million on top of $1.74 billion in infrastructure costs for a 57% stake in the operation. Disney paid $314 million for its 43% stake in the venture.
Hong Kong Disneyland's performance has also been watched by Wall Street as a gauge of Disney's prospects in mainland China, a market the company hopes to tap for growth. Disney is investing in its consumer products, television and motion picture businesses in China, and is in talks with the government about building another theme park in Shanghai.
Mr. Ernest found himself playing defense again with Hong Kong reporters at the first-year briefing Monday. He said the five-million-plus attendance figure included so-called "familiarization" tickets, given out for free to build buzz about the park within the travel industry, but he wouldn't specify what percentage of the visitors got in free.
Mr. Ernest also declined to offer attendance targets for the coming year or to disclose any specific details of Hong Kong Disneyland's financial performance, saying only "we are on very solid ground financially."
He admitted that Hong Kong Disneyland had gotten off to a slow start in its first year of operation but said it was making progress. "There were some marketing glitches in the early days, but we are very encouraged that all major indicators suggest that we are moving in the right direction," he said.
Business, particularly from mainland China, picked up considerably over the summer school holidays, he said.
Since opening, Hong Kong Disneyland has gone through considerable turnover in senior management, with Mr. Ernest taking over as managing director in January, followed by new senior executives in sales, marketing and public relations. Mr. Ernest said the park has changed the way it works with the travel industry and the way it markets itself in mainland China. Moreover, he said Disney has learned more about how to translate its American content to Asian audiences.
"The Asian culture and the Disney culture coming together has taken us a while to figure out," he said. "If you haven't grown up with the park or characters in the park, you're not sure what you are walking in to. We realized we needed more educational material out in the marketplace."
The park is now preparing a 10- to 15-minute "pre-show" that visitors could watch after they enter to explain "how the stories and characters knit together," he said.
Mr. Ernest downplayed any disappointment with the attendance figures. "As we built our original projection, we really had no history in this market," he said. On the other hand, Hong Kong has become a much more popular attraction for mainland tourists since Disney first announced its 5.6 million attendance target in 2002. At that time, Chinese could visit Hong Kong only in tour groups, but the government began to allow individual tourists into the city in 2003. Today, they make up the bulk of the city's visitors.
Write to Geoffrey A. Fowler at geoffrey.fowler@wsj.com