Prices Show Confidence
In Chinese customers
By GEOFFREY A. FOWLER
Staff Reporter of THE WALL STREET JOURNAL
November 23, 2004
HONG KONG -- Hong Kong Disneyland will open within budget on Sept. 12, 2005, and adult guests on peak days will pay 350 Hong Kong dollars (US$45) to enter the park, Walt Disney Co. and the Hong Kong government announced.
"This is truly a happy day for us," said Henry Tang, Hong Kong's Financial Secretary, as he made the announcement yesterday, flanked by Mickey Mouse. Disneyland will be a "driving force for tourism growth for Hong Kong, and family-tourism development in particular," Mr. Tang said.
The park is a joint venture of the city's government and Disney, in which the company invested US$314 million in return for a 43% stake in the park and management fees for operating it. The Hong Kong government is expected to spend US$2.8 billion to complete the park and related infrastructure. It has created 11,400 jobs during construction, and will have 5,000 employees on opening day.
The opening date comes earlier than expected, after Disney corporate officials last month set a target date of Oct. 14, 2005 -- even as some staff speculated that construction delays would push the launch into 2006.
"This is the fastest Disneyland ever built, and in five years' time we turned water into a magic wonderland," said Mr. Tang. It is also the smallest Disneyland of the five major Disney resorts world-wide, and is considered a testing ground for Disney's wider ambitions in China -- which include TV broadcasting, films and another theme park in Shanghai.
Beyond physical construction of the park's rides and attractions, Hong Kong Disneyland has been rolling out marketing initiatives targeted at tourists in southern China, who are expected to make up 30% to 40% of the park's visitors.
The pricing announcement offers a first measure of Disney's confidence in the spending power of Chinese customers, whose per-capita disposable income even in the most wealthy cities like Shanghai is about US$1,800 per year.
In addition to the adult price of HK$350, children ages 3 to 11 will be charged HK$250, and people older than 65 will be charged HK$200 for entry to the park on weekends and peak holidays. That places Hong Kong Disneyland's adult entry price slightly below the parks in Paris (US$49) and Tokyo (US$50).
Hong Kong Disneyland group managing director Don Robinson declined to say what he expected per-capita visitor expenditure would be at the park, an industry average measure that includes the entry fee, food, lodging and retail purchases. In past interviews, Disney executives have said they expect Hong Kong Disneyland's per-capita spending to be in the same range as the company's other theme parks.
"One needs to really look hard if affordability is an issue," said Sim Kok Chwee, director of the Pacific Asia Travel Association. "It will for quite a while be sustained by folks from the more prosperous cities in China rather than rural areas," he said.
But China's one-child family policy may offer a price reprieve on potential visitors. "If you have a few children, it becomes quite expensive. But a full day's enjoyment for just one child may not be beyond their means," said Mr. Sim.
Write to Geoffrey A. Fowler at geoffrey.fowler@wsj.com
In Chinese customers
By GEOFFREY A. FOWLER
Staff Reporter of THE WALL STREET JOURNAL
November 23, 2004
HONG KONG -- Hong Kong Disneyland will open within budget on Sept. 12, 2005, and adult guests on peak days will pay 350 Hong Kong dollars (US$45) to enter the park, Walt Disney Co. and the Hong Kong government announced.
"This is truly a happy day for us," said Henry Tang, Hong Kong's Financial Secretary, as he made the announcement yesterday, flanked by Mickey Mouse. Disneyland will be a "driving force for tourism growth for Hong Kong, and family-tourism development in particular," Mr. Tang said.
The park is a joint venture of the city's government and Disney, in which the company invested US$314 million in return for a 43% stake in the park and management fees for operating it. The Hong Kong government is expected to spend US$2.8 billion to complete the park and related infrastructure. It has created 11,400 jobs during construction, and will have 5,000 employees on opening day.
The opening date comes earlier than expected, after Disney corporate officials last month set a target date of Oct. 14, 2005 -- even as some staff speculated that construction delays would push the launch into 2006.
"This is the fastest Disneyland ever built, and in five years' time we turned water into a magic wonderland," said Mr. Tang. It is also the smallest Disneyland of the five major Disney resorts world-wide, and is considered a testing ground for Disney's wider ambitions in China -- which include TV broadcasting, films and another theme park in Shanghai.
Beyond physical construction of the park's rides and attractions, Hong Kong Disneyland has been rolling out marketing initiatives targeted at tourists in southern China, who are expected to make up 30% to 40% of the park's visitors.
The pricing announcement offers a first measure of Disney's confidence in the spending power of Chinese customers, whose per-capita disposable income even in the most wealthy cities like Shanghai is about US$1,800 per year.
In addition to the adult price of HK$350, children ages 3 to 11 will be charged HK$250, and people older than 65 will be charged HK$200 for entry to the park on weekends and peak holidays. That places Hong Kong Disneyland's adult entry price slightly below the parks in Paris (US$49) and Tokyo (US$50).
Hong Kong Disneyland group managing director Don Robinson declined to say what he expected per-capita visitor expenditure would be at the park, an industry average measure that includes the entry fee, food, lodging and retail purchases. In past interviews, Disney executives have said they expect Hong Kong Disneyland's per-capita spending to be in the same range as the company's other theme parks.
"One needs to really look hard if affordability is an issue," said Sim Kok Chwee, director of the Pacific Asia Travel Association. "It will for quite a while be sustained by folks from the more prosperous cities in China rather than rural areas," he said.
But China's one-child family policy may offer a price reprieve on potential visitors. "If you have a few children, it becomes quite expensive. But a full day's enjoyment for just one child may not be beyond their means," said Mr. Sim.
Write to Geoffrey A. Fowler at geoffrey.fowler@wsj.com
