Thursday, September 14, 2006

Disney fever is gone

Last year a shop in Mongkok, the most populous shopping area of Hong Kong, was taken over by a new tenant, a Korean cosmetic company. It afforded a rental as high as HK$ 980,000, more than 50% higher than the previous one. Some believed that Hong Kong Disneyland would create an economic booming, particularly in retailing sector, by attracting a huge number of mainland Chinese tourists. However, less than one year later, it withdrew from Mongkok and terminated the leasehold.

The local people already suffered from the volatility of property market in retail sector before they saw any Disney's economic contribution. It becomes more and more difficult to run small business in Hong Kong. The tourist sector saw the arrival of Disney as a new opportunity for expanding their market and network. In anticipation of high growth rate, many chain shops competed for space in shopping areas and malls along the railway route to the theme park. Yet their expectation proves to be wishful thinking.

On September 12, the celebration of Hong Kong Disneyland's first anniversary did not attract people's attention. So is its contribution to Hong Kong economy. While few people remember Hong Kong Disneyland's birthday, a corporate watch organization, Students and Scholars Against Corporate Misbehavior (SACOM), staged a protest against the Walt Disney Company's sweatshops.

In its first year, about 5 million people visited Hong Kong Disney, a number less than the expected target of 5.6 million, despite many aggressive promotion such as offering free tickets for taxi drivers. The economic bubble caused by people's high expectation of "Disney effect" is also gone despite the park's managing director Bill Ernest's optimism.

Hong Kong Disneyland, the fifth Disneyland in the world, is a project initiated by Hong Kong government who wanted to boost the local economy hit by financial crisis in 1998. The officials wanted to attract a huge number of tourists from mainland China. It takes more than 5 years to finish the project.

I doubt if Mr Ernest really cares about the future prospect of Hong Kong Disneyland. Since the year of 1999, The Hong Kong government has spent HK$22.4 billion on it, including 13.6 billion on infrastructure, 3.2 billion on capital investment and 5.6 billion on loan. The Walt Disney Company who owned 43 per cent of the shares in the Hong Kong Disneyland, only invested about US$ 0.31 billion.

Some criticized Hong Kong Disneyland, the smallest one in the global family of Disneyland, for its size. It is even smaller than some mainland theme parks. The management mishandled the chaos that ensued from the Lunar New Year holidays when a large number of Chinese visitors came. Thousands of angry ticket-holders were locked out of the gate of the park. Hong Kong Disneyland might be only a low-priced launching pad for its further expansion in Shanghai, Seoul or Singapore.

Photo: the zen master


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