Appeal of Tourist Destinations

When Walt Disney Parks and Resorts were planning their next big theme park in the late 1990s, they chose to expand the Disney 'empire' into an entirely new part of the world: China. Hong Kong Disneyland opened in September 2005. It is expected to attract over five million visitors in its first year of operation, and in November 2005, Disney announced that it had received over one million visitors in its first two months. Over a 40-year period, the park is expected to generate an estimated $19 billion in revenues.

But China remains a Communist state - indeed, the Chinese government owns a controlling stake in Hong Kong Disneyland. And although it is growing at a rapid rate, the Chinese economy is in the early stage of development. Can Disney rely on sufficient numbers of Chinese visitors to make the park a commercial success?

Image: The grand opening of Hong Kong Disneyland, September 12th 2005. Will the park be a commercial success? Title: Grand Opening Of Disneyland In Hong Kong. Copyright: Getty Images, available from Education Image Gallery

The appeal of Disney to Chinese visitors

Disney has assessed the Chinese economy as able to support leisure spending by sufficient numbers of customers. It's important that there is a reasonably sized middle class in order to provide enough visitors.

Hong Kong Disneyland's market has to be able to get to the resort. This means that there must be a reasonably well-developed transport infrastructure. The park has been designed to attract visitors from mainland China as well as from within Hong Kong itself. China is a huge country and Disney must have forecast that sufficient numbers of mainland Chinese visitors will be able to travel to the new resort.

Industry observers believe that the Chinese population is eager to buy into the Disney experience. But what evidence is there that this is true? Here are some of the signs indicating that Disney will not have a problem in this regard:

There may be sufficient demand from Hong Kong and mainland China to experience the Disney brand, but there must be some problems associated with setting up a major new attraction in this part of the world. Some of the most important of these are discussed below:

Travel

In recent years there have been limited opportunities for people in mainland China to travel to Hong Kong. Part of the reason for this is that until 1997 Hong Kong was a British colony. Under the British, the local economy developed into a major international centre of finance and trade. Its economy was therefore very different to that of mainland China, where the Communist system exerted strict control over many aspects of daily life.

One of the key aspects of life that had been strictly controlled was travel. In the past two years, though, the Chinese government has relaxed restrictions on travel to Hong Kong by people on the mainland. The number of visitors to Hong Kong from mainland China doubled to over 12 million between 2002 and 2004.

As a result, some analysts in Hong Kong believe that the new Disney resort will attract over six million visitors in its first year. They calculate that the park will be Disney's most successful venture outside the USA.

Culture

Mainland Chinese visitors coming from provinces close to Hong Kong are believed to be very unwilling to spend money during their stay. Indeed some travel agents expect these customers to just visit the resort for the evening in order to spend less money on food and attractions. However, because China is such a huge country, visitors from more distant regions to Hong Kong Disneyland may stay longer, out of necessity. This will result in them spending more money on services such as hotel accommodation and restaurants.

Disney has made sure that where possible the resort takes Chinese customs and beliefs into account. Examples of these efforts include: using a feng shui expert to advise on the positioning of fixtures and fittings at the park; Chinese advisers recommended a lucky opening date (September 12th); Disney's Hong Kong hotel does not have a 4th floor, as this number is regarded as likely to bring bad luck; the hotel's main ballroom measures 888 square metres, because eight is a lucky number in China.

Cuisine

In the days before Hong Kong Disneyland was opened there were three cases of food poisoning reported in the park's restaurants. When local officials arrived to investigate the outbreaks, they were told by park management to remove their caps and badges for fear of scaring the guests. Despite officials being reported as saying that Disney was not above the law, the health officials did as they were told and dressed less conspicuously; illustrating the power of the Disney corporation.

As part of Disney's efforts to fit in with Chinese traditions, the company included shark fin soup in its restaurants. In the end, though, Disney removed the dish from its menus after local campaigners labelled the dish cruel and ecologically damaging.

Tasks:

Find a map (online or in a book) and locate mainland China and Hong Kong. Print out a copy of the map if possible and indicate the main areas of China that could be expected to generate tourists to Hong Kong Disneyland.
What other areas of South East Asia might you expect to generate tourists to the resort? Back up your answers with evidence.
How has state control of China helped Disney in setting up its new park? Think about how the government has helped Disney connect with its key market segment.
Disney seems to have had more problems with environmental and animal rights campaigners than with the government of China in setting up Hong Kong Disneyland. Why do you think this might be? Consider the following in your answer: economic benefits of the park; media reporting of Disney's and the Chinese government's activities; the image of the company and the government of China.
Leisure park operators expect to invest heavily in their resorts in order to maintain their appeal to customers. How have UK-based theme park operators tried to keep their appeal to visitors?
Walt Disney Corporation believes that the world of entertainment has changed in recent years, with young people expecting more than just staff dressed up in character costumes. How might Disney ensure that their parks appeal to this vital demographic group?