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毕业论文作者签名： 签名日期： 年 月 日
香港廸士尼开业带来的预期利益及存在的问题
[摘要]这篇论文与香港第一个开业的主题乐园有关。廸士尼乐园, 一个世界闻名的主题乐园, 选择在香港建立她的第五个乐园王国。这件盛事对香港所有的市民应是既快乐也期待的。
可是, 由于受到环境变化和难以预料的因素影响, 香港廸士尼在开业后有不少问题产生。在这种情况下, 最迫切完成的是寻求可行的解决辨法。因此, 我们应该根据禾路廸士尼公司及香港政府就香港廸士尼开业前预期所产生的好处与实际运作后产生的问题作比较, 从而找出可行及适当的解决方法。
[关键词]香港廸士尼乐园; 禾路廸士尼公司; 预期利益; 存在问题；
解决办法
Expected Benefits from the Opening of Hong Kong Disneyland and the Existing Problems
[Abstract]This thesis is about the first overseas theme park opened in Hong Kong. Disneyland, a world-class and famous resort theme park, chose to build in Hong Kong. It should be a grand occasion and welcomed by every Hong Kong citizen.
Before the opening of Hong Kong Disneyland, the Walt Disney Company and the Hong Kong Government had a very high expectation on this project. So they predicted that Disneyland can bring lots of benefits such as large amount of profit, development of the tourism sector, and etc.
However, the variable environment and unexpected factors caused lots of problems after the opening of Hong Kong Disneyland. Under these circumstances, the urgent thing needs to do is to find out the solution to the problems. So in this case, we should analyze the expectation by Walt Disney Company with Hong Kong Government and the outcome after the operation of Hong Kong Disneyland, compare these two situations and find out possible and suitable solutions.
Key Words: Hong Kong Disneyland; Walt Disney Company; expected benefits; existing problems; tentative solutions
Contents
Chapter 1 A brief introduction of Hong Kong Disneyland
1.1 The famous theme park in the world
1.2 The Reasons for building Hong Kong Disneyland
1.2.1 Situation faced by Walt Disney
1.2.2 Situation faced by Hong Kong Government
CHapter 2 The Benefits4
2.1 To Walt Disney Company4
2.1.1 PROFITS4
2.1.2 LOW CONSTRUCTION COST5
2.1.3 POTENTIAL OF INCREASING TOURISTS (ATTENDANCE)6
2.1.4 A STEPPING STONE TO ENTER THE CHINESE MARKET8
2.2 To Hong Kong Government
2.2.1 STIMULATE HONG KONG ECONOMY
2.2.2 REDUCE UNEMPLOYMENT RATE
2.2.3 STIMULATE TOURISM SECTOR
2.2.4 INTANGIBLE BENEFITS
CHAPTER 3 EXISTING PROBLEMS TO HK DISNEYLAND…..….
3.1 Miscalculation
3.2 Limited attracting ability and developing area14
3.3 External competitor
3.3.1 THE HOMETOWN COMPETITOR
3.3.2 THE COMPETITOR IN CHINA
3.4 Dissatisfied Hong Kong Citizens
3.4.1 THE SOCIAL ORGANIZATION
3.4.2 ABUSING JURISDICTION GETS THE NOTICE OF PUBLIC
CHAPTER 4 eXISTING pROBLEMS TO Hong Kong Government
4.1 TO HK GOVERNMENT
4.1.1 Possibility of profit earned
4.1.2 The inefficiency of job created
4.1.3 Environment
4.2 TO THE ENVIRONMENT
4.2.1 REDUCING THE ATTRACTION OF HONG KONG
4.2.2 AIR POLLUTION
4.2.3 DEATH TO MARINE LIFE
CHAPTER 5 Tentative Solutions
5.1 SOLUTION FROM Walt Disney Company
5.1.1 SOLUTION TO MISCALCULATION OF ATTENDANCE
5.1.2 SOLUTION TO ATTRACT MORE VISITORS
5.1.3 SOLUTION TO INCREASE COMPETITIVENESS
5.1.4 SOLUTION TO RDDUCE REJECTION VOICE
5.2 SOLUTION FROM Hong Kong Government
5.3 Solution to reduce the pollutantS
Conclusion
Acknowledgements
Bibliography
Chapter 1 A Brief Introduction of Hong Kong Disneyland
1.1 The famous theme park in the world
Hong Kong Disneyland Resort is the fifth theme park of Walt Disney Company. After the first overseas theme park opened in Tokyo, Japan, this is the third theme park opened by Walt Disney Company outside America.
Although Tokyo Disneyland is the first overseas theme park, Walt Disney Company takes no ownership of the theme park in order to limit the risks. As a result, Tokyo Disneyland becomes the most profitable theme park when compared with the other parks. So Walt Disney Company decided to become a partner in the investment when building Disneyland Paris. However, what had been expected by Walt Disneyland did not become true. It not only bears a heavy debt, but also needs to face a lot of problems. So this time, when building Hong Kong Disneyland, Walt Disneyland used a very strict and serious manner to make a good planning.
Hong Kong Disneyland is a joint venture operated by Hong Kong International Theme Parks Limited (HKITP), which is jointly owned by Hong Kong Government and Walt Disney Company.
In early 1990s, the top management of Walt Disney Company began to visit lots of the Asian countries in order to find a suitable country to build the fifth Disney theme park in the world. Hong Kong, which is one of the most choices, was chosen by Walt Disney at last because of her best infrastructure and the high potential of mainland tourists. In the spring of 1999, Hong Kong Government and Walt Disney began to negotiate about Hong Kong Disneyland Plan. On 1, November, 1999, Walt Disney announced to the world that they had entered in an agreement and the construction work would begin soon.
Hong Kong Disneyland will be divided into four major parts in Phase 1, which are the Main Street U.S.A, the Fantasyland, the Tomorrowland and the Adventureland. Also, there will be two hotels adjacent to the theme park.
On 12, September, 2005, the opening ceremony of the theme park took place in the morning and the Hong Kong Disneyland opened to the pubic in the same afternoon.
1.2 The reasons for building Hong Kong Disneyland
1.2.1 Situation faced by Walt Disney
Walt Disneyland Company owning 100% of Disney Enterprises Inc. is a worldwide entertainment company with operations in five business segments: media networks, studio entertainment, theme parks and resorts, consumer products and Internet and direct marking. In theory, provided with its famous brand name in the world and the second largest place in the media industry, they should able to earn lots of money. However, in fact, Walt Disney Company was suffering a profit slump at the end of the 20th century. All of the profits in the field such as the net income of the company, its studio division, the consumer product division, income, Disney’s catalogue and Internet operation were reported an income fall.
In order to solve the problem, the most useful method is to find a growth driver. At this time, the theme park and resorts division are able to act at this role, the income from this sector increased by 12% to US.4 billion, while revenue increased US to US.1 billion (, , , 2000a:).
On the other hand, as the development in China becomes larger and faster, the potential of development in the Chinese market is very big, provided with the huge population density, Walt Disneyland believes that they are able to gain the market value as Mc Donald, which is one of the successful cases (, , , 2000b:). Also, there were many investors flocking to the mainland China, in order to gain a toehold in this enormous market, constructing the fifth theme park is also a wise decision.
Although there were many different choices provided to Walt Disney Company, they finally chose Hong Kong for building their fifth Disney theme park because of her best infrastructure and the growing potential of tourists from mainland China.
1.2.2 Situation faced by Hong Kong Government
Firstly, after the financial storm in 1997, the economy development in Hong Kong slowed down during these few years. It was mainly because the economy of Hong Kong overly relies on the property sector. So when the property market took a nosedive during the financial year of 1998-1999 after the financial storm, a budget deficit of HK billion was resulted. HK Government needed to find out a method in order to turn over the plight.
Secondly, the unemployment rate has stayed in a high position after the financial storm. Before the crisis, the unemployment rate in Hong Kong remained relatively low, not exceeding three percent. However, the unemployment rate surged to six percent within two years after 1997. As a result, many Hong Kong citizens have had a sense of job insecurity. This resulted in a much more caution about spending money which created a bad effect on Hong Kong economy.
Also, the tourism sector in Hong Kong also receded seriously since 1997.
Before the handover to China, the tourism sector in Hong Kong was very prosperous, nearly 12 million people visiting Hong Kong aimed to have a final look at the British colony. This brought in a foreign exchange of HK4 billion in 1996.
However, after Hong Kong’s return to China, the number of total visitors began to decrease, and the foreign exchange dropped to HK billion in mid-1997 from HK4 billion in 1996. In order to save the economy of Hong Kong, the Government believed that the only way was to develop the tourism industry.
According to the situation faced by Walt Disney Company and Hong Kong Government, they both believed that Hong Kong Disneyland could generate certain benefits and advantages which were able to help them overcome the crisis faced by them. So they decided to set a joint venture company called Hong Kong International Theme Parks Limited (HKITP) and cooperated with each other.
Chapter 2The Benefits from the Opening of Hong Kong Disneyland
2.1 To Walt Disneyland
Setting up the fifth theme park by Walt Disney Company was a long planning and process. But finally, the company decided to implement this project because of the benefits generated.
2.1.1 Profits
One of the major aims of Walt Disneyland Company is to find a growth driver to save the risks in her business, so the amount of net revenue that could be generated is the most important factor. After negotiating with Hong Kong Government, the two sides finally agreed to the following terms of the revenue given to Walt Disney Company:
Fig. 2-1 the Revenue of Walt Disney Company
Royalties
5% on gross revenues for merchandise, food and beverage, and hotels
10% on gross revenues for admission and participants who invested money toward the construction of specific rides
Base management fee
2% o gross revenues
Variable management fee
2-8% of EBITDA
( (A): , 2000: 6)
Such terms of revenue arrangement promised certain amount of income to Walt Disney Company. Also, forming a joint venture with Hong Kong Government could be entitled to dividends pro rata from operating profits of Disneyland when business results are permitted.
2.1.2 Low construction
Building a theme park needs a large amount of investment because of the high construction cost, so it is another important factor affecting the net profit of Walt Disneyland Company. But in Disneyland project, Walt Disney Company bore the least amount of cost when building the theme park. Nearly 90% of the costs were borne by Hong Kong Government. So it is very profitable to build Disneyland with such a low cost.
Constructing the theme park included land reclamation cost, superstructure and facilities erection cost, and the recurrent operating cost of the theme park.
The major costs of building Hong Kong Disneyland is the land reclamation, infrastructure and the land premium cost. The land reclamation and infrastructure cost would amount to HK.6 billion, but the cost would be borne by Hong Kong Government because much of the infrastructure would form part of the Government’s capital works program to prepare Northeast Lantau for tourism and recreation development even if HK Disneyland were not built. On the field of the land premium, the Company believed that the park would not be profitable to pay for the HK billion for using the land, so they bargained with HK Government for free land use. Although Walt Disney Company was required to pay for a land premium at first, the Government finally decided not to charge any cost for the land premium.
Compared with the investment for setting up Paris Disneyland, the cost of constructing Hong Kong Disneyland is relatively low.
The following table shows out the details of the cost distribution borne by Hong Kong Government.
Fig. 2-2 the Construction Costs Borne by Hong Kong Government
(, “”, NOV. 1999)
*A: Land Formation
B: Construction of associated infrastructure & government, institution & community facilities
# a: engineering cost
b: public transport interchanges
c: road works
d: public transport interchanges
e: public piers
f: landscaping berms
g: water recreation centre
h: sewerage network
i: storm water drainage system
j: fresh and salt water supply systems
k: provision of Government, institution and community facilities
l: contingencies
2.1.3 Potential of increasing tourists (attendance)
After the return to China in 1997, the tourists from mainland China began to increase. In 1998, the total number of visitors from mainland was 2.6 million and accounted for 27% of the total number of visitor arrival. In 1999, these mainland visitors contributed to 60% of the total visitor of Hong Kong major theme park—the Ocean Park. In 2000, the visitors from Mainland China increased to 3.7 million. Until 2006, after the opening of Hong Kong Disneyland at the final quarter of 2005, the visitors from Mainland China increased to 13.6 million. According to this trend, there is a great potential of growing visitors from the mainland to Hong Kong, especially those visitors from the Pearl River Delta region who have the highest average earnings in the mainland cities. Such data promised a steady and certain amount of visitors to Hong Kong Disneyland, also promised the revenue to Walt Disney Company.
Here is the table of Visitor arrivals from Mainland China in the recent year and the total number of visitors to Hong Kong.
Fig 2-3 the Number of Visitors to Hong Kong
(Source: )
Before the opening of Hong Kong Disneyland, Walt Disney Company had already made estimation about the future attendees between 2005 and 2024.
Here is the graph of the estimated attendees of HK Disneyland between the years of 2005-2024.
Fig. 2-4 the Projection of attendees at Hong Kong Disneyland
((A): , 2000, projection prepared by the case writer)
2.1.4 A stepping stone to enter the Chinese market
As mentioned before, one of the aims of Walt Disney Company is to gain a toehold in China market, opening the fifth Disney theme park in Hong Kong should be the most suitable decision. It is because since the late 1970s, Hong Kong has already recognized the opportunities by opening up of the Mainland economy. During these few decades, Hong Kong strived for being the middleman between the Mainland and the rest of the world, and channeling trade and the huge market value in China. So investing in Hong Kong can give a stepping stone for Walt Disney Company to entering the huge Chinese market.
2.2 Benefits to Hong Kong Government
2.2.1 Stimulate Hong Kong economy
After the financial storm in 1997, the economy of Hong Kong stayed in the period of recession. As mentioned before, Hong Kong was over reliant on the property sector, so when the property market took a nosedive during the financial year of 1998-1999, a budget deficit of HK billion was resulted. In order to turn over the plight, Hong Kong Government believed that cooperation with the foreign company to open a new tourist spot should be a useful method.
According to the statistics provided by Hong Kong Tourism Board, the 2006 spending figures showcase the increasing contribution of tourism to Hong Kong’s economy, with all market regions recording increase in total and per capita spending. The average per capita spending of overnight visitors, those staying one night or more, grew by 2.9% to HK99, while that of the same-day in-town visitors increased significantly by 25.3% from HK0 in 2005 to HK 15 in 2006. A key factor leading to the growth of same-day, in-town visitor spending is higher than average spending by consumption visitors from Mainland China.
Continued with this development trend, the Government estimated that the GDP of Hong Kong will keep increasing because there will be more and more tourists attracted by the opening of Hong Kong Disneyland and more and more revenue will be brought to the hotel, retail, restaurant, local tour, entertainment and other tourism-related sectors by the increasing spending as a result.
The graph under is the recent development of GDP in Hong Kong between the year 2000 and 2005.
Fig. 2-5 the GDP of Hong Kong Economy in Recent Years
(, 2005:.466)
The government hoped that with the increasing GDP of Hong Kong in the past few years, plus the stimulation of Hong Kong Disneyland, the continuing increase of GDP could help to bring our economy out of the valley of recession and recovery and become as prosperous as before.
The following tables are the prediction of profit and cash flow generated from the HK Disneyland in next 20 years.
These following graphs show the profit and cash flow created from HK Disneyland in the next 20 years are on the rise. This prediction is corresponding to the increasing GDP prediction by the Government.
Fig. 2-6 the Projection for Hong Kong Disneyland
Fig. 2-7 the Projection of Cash Flow for Hong Kong Disneyland
(b:18-19)
2.2.2 Increase unemployment rate
The unemployment rate also stayed very high during the period of recession. Before the crisis, the unemployment rate in Hong Kong remained relatively low, not exceeding three percent. However, the unemployment rate surged to six percent within two years after 1997. As a result, many Hong Kong citizens have had a sense of job insecurity. This resulted in a much more caution about spending money which created a bad effect on Hong Kong economy.
Fig. 2-8 the Unemployment Rate of Hong Kong Job Market
Source: , March 2000 and 2005. (: 20)
In Disneyland project, there will be 18, 000 direct and indirect job opportunities created within these 20 years. The government hopes that this can help to relive the tension of the job market. Also, during the construction period, there will be more than 4,000 construction workers needed so that the high unemployment rate can be leased for a while immediately.
2.2.3 Stimulate tourism sector
Before the handover to China, the tourism sector in Hong Kong was very prosperous, nearly 12 million people visiting Hong Kong aimed to have a final look at the British colony. This brought in a foreign exchange of HK4 billion in 1996.
However, after Hong Kong’s return to China, the number of total visitors began to decrease, and the foreign exchange dropped to HK billion in mid-1997 from HK4 billion in 1996. In order to save the tourism sector of Hong Kong, the Government believed that the only way was to draw some attractive tourist spot.
Fig 2-9 the Total Number of Visitors from 1990-1998 to Hong Kong
( : , November 1999)
As Mr. , the Tourism Commissioner, said “This (Disneyland) project tells the world that we are alive and kicking”[①]. The project of Disneyland can help to reinvigorate the tired-looking of tourism sector by giving a positive image to Hong Kong. This was also a good change for Hong Kong to turnaround from the economic slowdown environment and diversified the phenomenon of over-reliance on the property sector.
2.2.4 Intangible benefits
Finally, there are some intangible benefits to be generated too. The first one is the symbolic message sending to the world that Walt Disney chose Hong Kong as their fifth theme park resort. The international image of Hong Kong will be enhanced and the image of a vibrant, cosmopolitan and key tourist destination in Asia and the world will be set up. Such message can attract more people to come to visit and the investment from the world may be able to increase too.
Secondly, as Walt Disney was renowned for its creativity, operational excellence and ability to deliver a high level of satisfaction to customers, it is able to set a new standard for the service industry in Hong Kong and stimulated the other service sectors to reach the world service standard.
Thirdly, Hong Kong can learn about some high-tech technology as the operation of the theme park would showcase the best of cutting-edge technology in its attractions and shows.
Then, as Disneyland resort announced providing family entertainment for their customers, Hong Kong families can have more choice when they are planning their family activities, so that the life quality in Hong Kong may be improved.
Also, Walt Disney Company always emphasizes the training of their employees. There is a “Disney University” for its employees with a wide variety of career-development, so the workforce in Hong Kong can benefited from the resource given by the Company.
Finally, as Walt Disney is an environmental friendly company, their experience about operating a company more environmentally can set a good standard for Hong Kong companies.
Chapter3 Existing Problems to HK Disneyland
However, although there are many benefits brought to Walt Disney Company and Hong Kong Government, the operation of Hong Kong Disneyland in the first year also created some problems to the company.
3.1. Miscalculation
At the very beginning of the project, Walt Disney Company expected that 5.6 million visitors would come to the theme park in the first year. This expectation was made in 2002 when China only allowed its citizens to visit Hong Kong as part of tour groups. However, after the Individual Visit Scheme began in July, 2003, and extended to 40 cities in 2006, the number of attendees to HK Disneyland on theory should be more than expected. But the annual report by the HKITP stated that the total visitors to HK Disneyland cannot meet the first-year target of 5.6 million visitors. The attendance before the park’s anniversary had only exceeded 5 million visitors.
Also, HK Disneyland planned that the maximum capacity of the park was 30,000 people each day. But, on the fund raising day of The Community Chest, confusion existed, and even the theme park only received 29,000 visitors. The Government had requested the theme park to reduce the park’s planning maximum capacity, but Walt Disney Company insisted that they could handle the operation smoothly by extending the office hour. However, in the first Lunar Year Holiday, the first and the second of January in 2006, large confusion happened. Thousands of Chinese tourists with ticket could not go into to the park because the entrance gate was fully occupied. The angry guests who were not willing to leave began to climb over the gate and argue with the staff and securities. Chaos happened in the whole day, the management of the theme park sometimes reopened or refunded to the tourists, but sometimes allowed their entrance. The tourists were very puzzled and confused.
The park is notorious for its poor management. In this year, the entrance rate of HK Disneyland in Lunar New Year only reached 70%. Compared to the last year, many visitors were not willing to visit HK Disneyland, and some of them chose to visit the Ocean Park.
3.2. Limited attracting ability and developing area
Compared with the other Disneyland theme parks in the world, HK Disneyland only has 22 scenic spots, where there are 44 spots in Disneyland Paris, 45 spots in Tokyo and Florida, and 65 spots in California.
The total area of HK Disneyland Phase 1 is only 126hectares. There are only four themed lands to be found inside the park, which are the Main U.S.A., Adventureland, Fantasyland and Tomorrowland. The tourists who came to HK Disneyland can visit the whole park at once. So, the attraction for the tourists is relatively lower than any other Disneyland in the world.
Unit now Disneyland in America is still continuing to expand its size in order to maintain 10million visitors every year. But HK Disneyland cannot imitate this method, because Hong Kong is too small to have enough land. Although the sea reclamation method can be used, the sea area inside Hong Kong is disappearing rapidly.
Also, as the smallest Disneyland in the world, the overcrowding problem in HK Disneyland is another major reason which can reduce the attraction to tourists. On the fund raising day of The Community Chest on 4, September, 2005, the poor management of controlling entrance rate caused a full-occupied park. Visitors needed to wait nearly 3 hours for each game, the souvenir shops were full of customers, and the restaurants were so full that some tourists needed to use the rubbish bin as their lunch table.
3.3. External competitor
3.3.1 The hometown competitor
The major competitor of HK Disneyland is the homegrown theme park- the Ocean Park. Ocean Park has been opened for more then 30 years. It aims at being developed into a world-class attraction scenic spot which allows people to connect with the nature and recognize its animal husbandry, research and relationship with the community. Last year, Ocean Park was chosen as the seventh most popular theme park in the world by the Forbes magazine. Also, the park recorded a bump of visitors in last year too.
After the declaration of building a Hong Kong Disneyland at the Penny Bay, the park declared to redevelop itself. She had planned to use HK.5 billion to rebuild the park, in order to enhance the status of HK as a premier tourist destination and generate significant economic benefits.
“We are grateful to the Government for its decision to financially support our redevelopment master plan which is a booster for the Park’s development. This support signifies the Government’s endorsement of Ocean Park as not only playing a key role in public education and conservation but also being a catalyst for increasing tourism, stimulating economic growth and facilitating the urban re-generation of the Southern District,” said Dr. , Chairman, Ocean Park Corporation.
The redevelopment of the park is expected to bring a net quantifiable economic benefit of from HK to HK billion and create 11,300 to 12,800 jobs during 2021-2022.
3.3.2 The competitor in China
The second competitor is Shanghai Disneyland. Shanghai Disneyland is another risk threatening HK Disneyland in the next 10 years. According to , the new administration president of Walt Disney Company, the second Disney Theme Park inside China will be set up in the future. The total area of this new theme park will reach 500 hectare, nearly 4 times of HK Disneyland Phase 1.
3.4 Dissatisfied Hong Kong citizens
3.4.1 The social organization
Before the opening of HK Disneyland, there was a civil organization, the Disney Hunter, set up by different Hong Kong university students. They join together by person or in group. They aim to raise the concern of the society about the problems caused by Walt Disneyland. Such problems include the working conditions in the developing countries and the staff inside the park; the impact on our environment; social discrimination, etc.
Before the day of the opening ceremony, Disney Hunter had organized a night meeting outside HK Disneyland aiming to demonstrate against the park. During the meeting, some demonstrators had crossed over the limit set by Disneyland’s security. As a result, the security used some “water hose” to push back the demonstrators and trample on their banner. Both sides involved in conflict, the police beside them using nonintervention method. Finally, the demonstrators leave peacefully, but they were still planning to organize another action to reflect their opinion against Disney Company. (, 2005:; , 2005:)
3.4.2 Abusing jurisdiction gets the notice of public
Besides, the park was accused by critics on 30, August, that the park management abusing its jurisdiction by asking the health officers to remove identifying park of the uniform before going into their restaurants. (, 2006: )
After that, the Food and Environmental Hygiene Department (FEHD) reiterated in Press Release that the department staffs were empowered under the Public Health and Municipal Services Ordinance to inspect food premises and take enforcement actions for and breach of the law.
“We attach great importance to the incident and find the request unacceptable. We have contacted the management of Hong Kong Disneyland and advised them the statutory role of our law enforcement officers.”
“The department will in all circumstances exercise its powers as necessary for the protection of public health,” the spokesman said (Net. 1).
The spokesperson of HK Disneyland immediately made apology to Hong Kong citizens and stated that there should be some misunderstanding between each another. However, the explanation was not quite accepted by HK citizens, the bad effect caused by this incident had not released.
Chapter4 Existing Problems to Hong
Kong Government and the Environment
The operation of Hong Kong Disneyland in the first year even created some problems to government and the environment of our society.
4.1 To the government
4.1.1Possibility of profit earned
In Disneyland project, Hong Kong Government has invested 2.3billions which accounts for 90% of the total investment. Based on the base tourists increasing rate, the market penetration rate, the government assumed that the attendees of HK Disneyland, the profit and cash flow in the next 20 years will continue to increase. But, in fact, the entrance rate of HK Disneyland cannot meet the first target of 5.6 million in the first year after the opening. Does this mean that the expectation of Hong Kong Government was too optimistic or does this mean that the government made a wrong decision?
According to the Government prediction, in the next 40 years, HK Disneyland will bring 148 billion net profits to HK. But, according to the statistics of Hong Kong Tourism Board, the average expenditure by the tourists decreased from HK, 502 in 2003 to HK, 478 in 2004. On the other hand, the number of visitors in 2006 cannot reach the target 2.7million with only 2.5million. For this reason, Hong Kong Tourism Board has already reduced the number of assumed tourists coming to Hong Kong from 8.1% to 4.6% in 2007. Many critics pointed out that if the situation of annual visitors and average tourist expenditure continue to reduce, is the prediction by the Government able to achieve? Or is it too good to come true?
On the other hand, the government has invested over HK.3 billion in Disneyland project, but the management authority belongs to Walt Disney Company, not the HK Government. In fact, except Tokyo Disneyland which is operated by Japanese themselves is making profit each year, the rest in the world continue to make a deficit. To add, last year the result of the entrance ticket and the demand for touring bus are not the same as anticipated. This statistics made many people worried if HK Disneyland was able to earn money under the management of Walt Disney Company. Is Hong Kong Government’s prediction about the next 40 years able to succeed? Such questions directly affect the development of HK economy.
4.1.2The inefficiency of job created
According to the Government’s expectation, there will be 18, 000 direct and indirect job opportunities created from HK Disneyland. Also there will be 36, 000 job positions created within the next 20 years.
Apparently, HK Disneyland is beneficial to Hong Kong employment situation, but in fact, the jobs created by HK Disneyland are usually some low-technique and low-paid jobs, which are not beneficial to raising the technology and production ability of Hong Kong. Also, the staff required by HK Disneyland must be able to speak Cantonese, English and Mandarin. For the middle-aged group and low education level group it is not helpful.
Then, some investigation reflected that the tourism industry will reduce the whole salary standard in Hong Kong job market. In Osceola, Florida, the actual salary standard between 1979 and 1997 continually slide after developing their tourism industry, only 12% salary was above the standard.
On the other hand, during the publicity, Disneyland stated that the minimum wages to each staff must be above HK,000 per month, but some job positions only have HK,050 per month such as cleaning and restaurant staff. Also, the staff of Disneyland needs to bear the transportation cost and time cost, but they do not have the allowance of double-paid and others except some medical welfare.
4.2 To the environment
4.2.1 Reducing the attraction of Hong Kong
The Friends of the Earth pointed out another negative impact on Hong Kong is the investment from overseas and the attraction for professional to Hong Kong will be decreased if the polluting level continues to increase.
“Recently, a survey by the American Chamber of Commerce in Hong Kong …… 79% feel environmental issues will make Hong Kong less attractive to foreign companies (1). The study surveyed 140 top executives from member companies of the chamber. ” ((August 2006))
The loss caused by this negative impact is difficult to be calculated. It not only affects the economy environment in Hong Kong but also and affects the health of our next generation. Both are contradictory to the original aim of the government.
4.2.2 Air pollution
Firework show is the star turn in every Disneyland theme park. Everyday, as the closing time approaches, Disneyland will operate a firework show to signify the close of the park. The show is very popular. Many tourists will wait inside the park until the end in order to enjoy the show.
In Disney resort in Anaheim, they are using a new air launch technology in order to reduce ground-level smoke. However, this technique isn’t used by Disney Company inside Hong Kong because the released pollutants caused by gunpowder-send technique can meet the local environmental requirements. But some critics do not agree with the government. One of the legislators of Islands District Council, , had said that “Why the Disney Company used this technique in American, but not in Hong Kong?” in the Island District Council Meeting. Also, the environmental organization, Friends of the Earth, stated that the pollutants caused by the firework inside Disneyland could increase the level of air pollution or the nearby residential area, the impact of the increasing pollutants can cause a health threat to the residents, especially for sensitive groups.
4.2.3 Death to marine life
The Penny Bay reclamation project has caused lots of death to the marine life, especially to the Sousa Chinensis. According to the , one of Hong Kong’s leading environmental charitable organizations, the discovery number of Sousa Chinensis has continued to decrease in the last 11 years, dramatically decreased by 40%. It is because the reclamation project in the Penny Bay has caused lots of pollutants in the sea water. In March of 2005, the suspension particle in sea water recorded 30% exceeding the standard. In the final analysis, the pollution to our natural environment is mainly because of the HK Government. In order to finish the construction of HK Disneyland punctually, the Government approved the reclamation project without the permission by the Environmental Department. After that, the Civil Engineering and Development Department “illegally” dig away the sand at the sea bed. This action eventually destroyed the habitat of Tabular Corals and also caused the death of thousand of marine life. Some fishermen in Lantau Island pointed out that the reclamation project had caused the death of more than 2,000 burdens fish.
Chapter 5 Tentative Solutions
5.1 Solutions from Walt Disney Company
5.1.1 Solution to miscalculation of attendance
In order to control the number of visitors on some specific day, the most effective way is to control the number of tickets on the specific day. After the Lunar New Year in 2006, Hong Kong Disneyland learnt to use this method to control the number of visitors. However, the shadow still cannot release the bad memory of the visitors.
5.1.2 Solution to attract more visitors
As mentioned before, the expansion of size to increase attraction is not possible, and the only way is to create new things to increase her attraction in order to maintain the freshness to tourists.
The recent program promoted by Disneyland is called “903 Disney Attack”. The Disneyland teamed up the hottest young adult radio channel CR2 to host this party. This party will transform the futuristic Tomorrowland into one of a kind of late-night playground featuring a giant dance floor and party zone, and hosted by CR2’s top DJs including Sammy and the I Love You Boyz. The Party will be held after the show of firework and ended until the midnight.
5.1.3 Solution to increase competitiveness
Faced with two large competitors, HK Disneyland must find out some methods to resist the threat. According to the theory of strategic management, the external factors, such as competitor, can have a great impact on the firm performance. It is because such factors can affect both the industry average performance and the relative firm performance within the industry. To solve the problem caused by external factors, we should use strategic method to increase the company’s competitive advantage and reduce the threat from others.
One of the methods is changing customer knowledge. Changing customer knowledge can help to develop the loyalty of the customers to particular company, because the knowledge about the company can help the customers to appreciate the importance and the quality of the products or services produced by the company, and developed their brand loyalty as a result.
According to , Hong Kong Disneyland‘s head of Sales and Travel Trade Marketing, the customers is not familiar with Disneyland theme park, especially the customers from Mainland China.
In order to improve the familiarity of customers, suggested that they should launch a 10 to 15 minutes show to every customer. Also, strengthening the sales and marketing initiatives is another useful method. And the theme park can launch some new promotion programs to raise the attention of the customers such as Halloween Day, Christmas Day and Lunar New Year, etc.
Increasing the knowledge of Disneyland in tourist can increase the competitive advantage of the theme park.
On the other hand, another method is finding out the key success factor of Disneyland and striving to develop its strength.
5.1.4 Solution to reduce rejection voice
As Hong Kong citizens are one of the major customers to HK Disneyland, the Company should deal with the problem carefully. From the last decade of 20th century, communicating with the public was one of the major strategies of many organizations. So, making a good relationship with the public should be the most useful and effective tool to reduce the bad effect by the oppositional force.
Changing the mind of “Disney Hunter” is quite hard, so the only way to do is to persuade “the silent majority” to believe that the benefits of HK Disneyland are larger than the disadvantages. It is because “the silent majority” always holds the key to success and they are usually the most readily influenced by the organization’s communicators. The most common example is the political campaigns. On the other hand, when facing the demonstration again, the park should not solve this by force. It is because Hong Kong is a city suggesting the freedom of speech, force is not allowed and permitted by every Hong Kong citizen, and such action will cause lots of dispute and debate. It is very easy to create a bad image to HK Disneyland.
5.2 Solution from Hong Kong Government
In fact, the problem faced by Hong Kong Government is Hong Kong citizen lacks confidence in their Government. One of the methods is to educate Hong Kong citizens that the development of this project is in a good situation, such as telling the citizen that the expected data of visitor cannot reach the target number, but it will not affect the profit and benefits from the theme park. Also, the Government should make some investigation and survey to prove that a large investment especially involved with an international cooperation must need a period of time to make revenue, so the public should have patience and should not make judgments in such a short time.
On the field of job market, the Government has continued to provide many training programs to different people. The Labor Department has introduced a package of market oriented employment initiatives method such as The Employment Programme for the Middle-Aged, Skills Upgrading Scheme for workers with secondary, or below secondary education. Also, the government tried to improve the job market by creating a number of temporary jobs from 2000 year. This scheme can help the unemployed enter or re-enter the labor market and meet operational needs. In 2005, 11, 600 temporary jobs were extended. Many to those jobs were suitable for workers with a lower education and skills level.
So, the inadequacy of the job provided by Disneyland can be supplemented by other job schemes.
5.3 Solution to reduce the pollutants
One of the most efficient ways to reduce the pollutants and improve the air quality at Lantau Island is to install the new fireworks launch system in the Disneyland Park, because one of the reasons to accelerate the pollution at Penny Bay is the pollutants emitted by the firework. Reducing the pollutants is able to reduce the pollution level at Lantau Island.
Also, implementing a continuous monitoring on the air quality at Lantau Island can be helpful to protect the environment. The data collected by the monitor station can be used for doing environmental research and testing possible solution.
Conclusion
On current situation, HK Disneyland seems to bring many problems. Such problems are very hard and tough to Hong Kong. But, in the final analysis, the conclusion of HK Disneyland’s future cannot be made in such a short time.
“It was too early to deliver a verdict on HK Disneyland”—John a professor
of hotel and tourism management at HK Polytechnic University (,1999:).
From the opening ceremony until now, the Disneyland has operated not more than 2 years. It is too unfair to judge whether it is successful or not based on her short life. “It’s going to take 10 or 15 year for us to really say’ yeah, was it worth our while” “No business is necessarily going to be operationally successful and viable in the first year of operation” some words by HK citizens (, 2005:).
But there are still many problems and difficulties produced by HK Disneyland. This accusation is not allowed to deny HK Disneyland.
“I think they have learned their lessons after this year” said the opposition lawmaker (, 2005:).
Although the operation experience of HK Disneyland is not very good, still some people believe that “The park record was still outstanding by local standards” (, 2005:). They are still willing to give chances to HK Disneyland to have a bright future.
Acknowledgements
I would like to thank all the people and teachers who have helped me during these few years, especially Professor , who is very patient and kind to me. Since the first year in Jinan, Professor has taught us much knowledge, which helps me a lot.
During these few years in Jinan University, I have learnt many things: not only the knowledge from the books, but also the way of getting along with people. After these few years, I become an independent and confident person. I hope that this experience can help me make a bright and colorful career.
Bibliography
Credit:ivythesis.typepad.com
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