Disney Shanghai: Good for China, Bad for Hong Kong

Posted by: Frederik Balfour on November 05, 2009

It’s been a crummy 24 hours for the Hong Kong tourism industry. The first piece of bad news: China has given the green light to Disney to build a theme park in Shanghai. The $3.5 billion Chinese facility will sprawl across about 1,000 acres which will dwarf Hong Kong Disneyland’s 296 acre lot. Mainland Chinese account for more than one third of the visitors to Hong Kong Disneyland, and once the Magic Kingdom sets up in the Middle Kingdom much of that business will get cannibalized. Hong Kong legislator Emily Lau, a long-time critic of Hong Kong Disneyland in which the government has invested billions, called the news a “devastating blow.”

The second piece of bad news is really just more of the same: another day of extremely high roadside pollution reported by RTHK radio this morning. A Hong Kong tourism official interviewed on the radio tried to put a brave face on things saying the problem—which he presumably thinks is only temporary-will go away soon. That’s little consolation for anyone visiting Hong Kong at the moment, where the average stay is just a few days. “The blight of air pollution is a tax on the whole tourism industry as it affects tourists during their visit and leaves a negative impression of the city that will affect their desire to return,” says Joanne Ooi, CEO of Clean Air Network, an environmental advocacy group focusing exclusively on air pollution in Hong Kong. “Reduced visibility leads to strong association with less developed cities like Mumbai that leaves a black mark on Hong Kong’s image.”

Equally important perhaps is that Hong Kong’s air quality leads to unfavorable comparisons with its regional rival Singapore which has has long benefited from its reputation as the cleanest and safest metropolis in Southeast Asia. More recently the Singapore government has made a big push to improve the city’s tourism attractions by hosting the Formula One race and allowing casinos to open their doors next year. Another selling point for Singapore: a Universal Studios theme park is also set to open in early 2010. Though smaller than Hong Kong Disneyland, its proximity to Indonesia, Malaysia and Thailand will give it an advantage over Hong Kong.

But Shanghai is clearly the bigger threat to Hong Kong. Here’s what Parita Chitakasem, research manager at Euromonitor International in Singapore, who specializes in theme parks, had to say to me in an email. “Disneyland Shanghai will have two big features which will make it more attractive than its Hong Kong counterpart: although it is still early days, Disneyland in Shanghai will probably offer a much better experience for your money than Disneyland in Hong Kong – initial plans show that Shanghai’s Disneyland will be six times bigger compared to the current size of Hong Kong Disneyland, which is very small (only 16 attractions). Also, for visitors from mainland China, it will be much easier to travel to Disneyland in Shanghai, as there are no visa/cross border concerns to take care of.”

Still, the Shanghai project is still some years off. Indeed, the press release from Disney was short on details, saying it was in negotiations with the Shanghai government. The Burbank, California-based company will have a 40% stake in the Shanghai resort while the Chinese partners are as yet unnamed. But ff the experience of other U.S. corporations with joint ventures in China is anything to go by, Disney CEO Robert A. Iger is going to need a lot of pixy dust around to make things go smoothly.

Addendum:
Zhongnan University professor Sun Xiliang says on his blog on China.org says Disney needs Shanghai a lot more than Shanghai needs Disney.


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Reader Comments

Saul

November 5, 2009 06:17 AM

Your title is entirely misleading. It should really read "Disney Shanghai: Good for Disney, Bad for China, especially for Hong Kong." The government of Hong Kong had wasted billions of dollars in taxpayers' money subsidizing the construction of this outdated theme park that few actually want to go by its own merits. It has been clear from the start that instead of bringing in additional visitors who otherwise wouldn't visit the city, Disney has simply diverting to itself spending power of mainland tourists whose main purpose for coming to Hong Kong is for the shopping. Now the Shanghai municipal government, with the grandiose idea of outdoing Hong Kong in everything, is trying to repeat Hong Kong's mistake on a much larger scale! It is Disney that will be laughing all the way to the bank!!

john

November 5, 2009 08:43 AM

I like the pollution in HK, the kind of "go away soon". ;-)

Down with HK

November 5, 2009 11:40 AM

I visited Hong Kong once in 1996, and have zero desire to ever return. Hong Kongers are the rudest people on the planet, pushy, loud, abrasive and extremely rude. Anything that takes business away from Hong Kong is good news to me. Give those arrogant people a piece of humble pie.

Albert Ho

November 5, 2009 01:15 PM

Hong Kong should become independent from China. We cannot continue with such unfair favoritism from China at Hong Kongers expense. Down with China!

Domenick

November 5, 2009 01:16 PM

Tell the Hong Kong Government to wake up and to stop depending on Mainland China for economic aid, there are other countries in the world. Even since Hong kong became Chinese, they abondoned the other countries. When Hong Kong was British it was more internationalized than now.

Domenick

November 5, 2009 01:16 PM

Tell the Hong Kong Government to wake up and to stop depending on Mainland China for economic aid, there are other countries in the world. Even since Hong kong became Chinese, they abondoned the other countries. When Hong Kong was British it was more internationalized than now.

jambo

November 5, 2009 03:26 PM

HK was foolish to let Disney build there. DIsney was merely using HK as a stepping stone to something bigger and better. In the end, HK got the shaft. Once Shanghai opens, HK Disney will be even more of a ghost town.

KennyLee

November 5, 2009 03:45 PM

Down with HK. Take your gweilo azz home then. Don't come back boy.

Laughing from HK

November 5, 2009 05:09 PM

I agree with Saul 100%. Disney will always be the one going to the bank. As for John's narrow-minded comment, HK has over 7M inhabitants and doubt that you had a chance to meet them all.

Steve

November 5, 2009 05:18 PM

"Hong Kongers are the rudest people on the planet, pushy, loud, abrasive and extremely rude."
You clearly haven't been to Shanghai, Shanghaiers are twice as rude and arrogant as Hong Kongers. It's the same with any big city , the dwellers of New York, Tokyo and London are quite infamous for their behaviors.

adviser

November 5, 2009 06:23 PM

Hey the person who wrote about hk ,DOWN WITH HK ..think before u talk and HEllo that was back like 13 yrs ago u went to hongkong .Everywhere in this world has rude and arrogant people .Maybe your the one who is arrogant and rude ,so thats how u get treated .Your ignorant as well hahaha..

Asan

November 5, 2009 09:34 PM

I visited Hong Kong during 1997 and 1998 on several occasions, mostly on business. I have to say that I like Hong Kong for food and goods, very the common people on the street. The impression left for me by the people of Hong Kong was, snobbish, rude and impolite and incivilized. By the way, I am from China mainland.

As for the Disneyland, I don't think Shanghai Disney is going to do much a dent on Hong Kong because I don't believe people would go to Hong Kong for the Disney.

rob

November 5, 2009 10:56 PM

Totally, totally, not true. Disney has decided to build the next Disney World in Dehli, not Shanghai. India is the world's greatest democracy. Only Indian democracy can have Disney Worlds, not China. India is the only super power of the world after this economic crisis. Jai HInd!

czh1997

November 7, 2009 11:02 PM

HK is 20 years ahead of the mainland China, including in mistakes.

Disney is an absurdity for HK (Emily Lau is absolutely right) and for the mainland. Unfortunately China is now pouring millions of Rmb in an attraction park while hundreds of its millions people need much more these millions than the rich people who will visit this park.

Where is the Harmonious society ?

Stop putting money in Shanghai where people are really bad manner (the worst in China) and much more arrogant.

Communism means equality. The rest of China need much more that money.

Hu Jin Tao, your job is to eliminate the Shanghai clique.

Frederik Balfour

November 8, 2009 01:13 AM


Disney needs Shanghai more than Shanghai needs Disney blogs Zhongnan University professor Sun Xiliang blogging on China.org

http://www.china.org.cn/opinion/2009-11/06/content_18840794.htm

The_Observer

November 8, 2009 01:24 AM

When the HK Disney World was approved all those many years ago I said to myself what a waste of the land in small crowded HK. Couldn't understand why the HK administration invested public money on a theme park/funfair based on USA cartoon characters when China has many more historical figures, real and fictional, in her long history of literature. I would have rather Disney created a studio in HK for film making. That would have taken up much less space and provided training and "real" jobs for local people.

Sing Sling

November 8, 2009 05:28 AM

This is equally bad news for Singapore...

300 acres attraction in SH vs a 30 acres in SG. Guess which one will be on your "Must do list" vs nice to see if i happen to be there. SH site will be a regional magnet luring customers from far regions.

Spoiled customers will quickly dump or tag the SG Universal Park as boring (ie like the HK Disney Site).

Bad news to Singapore. But yes, worse to HK.

Neal Horwitz

November 8, 2009 09:27 AM

These ares hystrionics that only HK-and the media-is capable of doing with such elan.
a. The Shanghai park has been in discussion for the better part of the past decade, nothing new about it, nothing. The agreement was only in motion earlier this year. When HK originally got the nod, they knew Disney was interested in Shanghai.
b. Frederik, it is duplicitous to quote Emily Lau, and you know better. She has nothing good to say, never has, never will.
c. Same for the air pollution, an irrelevancy as regards Disney, and with the number of mainlanders that visit it anyhow, few complain about the pollution. That "bad news" comment is best addressed elsewhere.
d. HKTA always wrings its hands when they think SG is ahead. The Integrated Resorts will attract more in SEA than North Asia, and the mainlanders will continue to use HK and Macau as their playground, not SG. And the way the casino's are set up, the mainlanders may well not embrace gambling SG style.
e. Two Disney parks (and Ocean Park) can co-exist. Disney HK will remain, find its cadence eventually, and become a boutique park. Traipsing through a Brobdingnagian Disney Shanghai may not be necessarrily good;size does not always matter, and theme parks will increasingly be digitally successful (witness what Disney is doing with all their stores now)
It would be nice to look at this not as a fiasco for HK but an opportunity to reinvent themselves. And please no more dyspeptic Emily Lau quotes-she is a harridan

HK citizen

November 9, 2009 01:56 AM

"Emily Lau ... she is a harridan... has nothing good to say, never has, never will."
Agreed with you totally on those particular comments.

charley chang

November 9, 2009 02:55 PM

CHINESE CORP HAS BOUGHT THE TRADEMARKS FOR EUROPE OF "WHERE DREAMS COME TRUE" AND " THE PLACE WHERE DREAMS COME TRUE". NOW THE CHINESE WILL STOP DISNEY USING THESE TRADEMARKS IN EUROPE. ALL ITEMS FROM TOYS TO DVD ARE COVERED EVEN THEME PARKS. PRODUCTION USING WILL BE LEGAL FOR THE CHINESE AND NOW DISNEY WILL HAVE TO FIND OTHER TRADEMARKS. BIG MISTAKE BY THE BIG BOYS. IF THESE SCREW UP ANYONE CAN,BUT THE CHINESE DONT!

JeffAsh

November 9, 2009 08:04 PM

@Rob,

I totally agree with you! India is the world's largest democracy and therefore automatically the leader in every imaginable field. Indian democracy has given India the highest literacy rate, the most extensive expressway network, the longest high-speed rail network, the most airports, the highest GDP and GDP per capita, the most educated work force, the cleanest cities, and the most equitable society in the world! In fact, there are already 7 disneyland in India. Oooooooo... hold on, my delhi belly is coming back again. I must peruse the sidewalk to relieve myself...

Alex Kong

November 10, 2009 07:42 AM

I'm a Hong Kong citizen. I agree that Hk people are really arrogant, but perhaps some of you who are tourists have met the rudest ones of HK? I myself like to help tourists find their way because I always have to stay around tourist-concentrated areas. My mom taught me by her example to be kind to tourists since i was little. However, I do think the Hk gov should be more concerned about the REALLY POOR air quality here.

zergy

November 10, 2009 05:41 PM

@ Rob,

Don't embarrass yourself plz. Indian Democracy is a joke. Perhaps the least successful among democratic worlds. China's people are wealthier, have a higher literacy rate, better health care, live longer. China reduced the amount of hungry people, while India increased and still has 240 million starving citizens (http://www.businessweek.com/globalbiz/blog/eyeonasia/archives/2009/10/_hunger_scoreca.html). Some democracy huh? Millions of Indians don't even have basic needs whats good is democracy? China currently does everything better than India, that already gives you a clue that the Chinese government governs better than your so called Democratic Indian gov.

JeffAsh

November 11, 2009 08:29 PM

@Zergy,

Please don't get worked up. Rob was actually being sarcastic.

Han

November 13, 2009 10:08 AM

how stupid you are!Don't you know HongKong belongs to CHina?

Grace

December 28, 2009 08:00 AM

foolish!!HK is one part of China forever!!in addition, Taiwan and Macau.I have to teach you Chinese history,guests!

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BusinessWeek’s team of Asia reporters brings you the latest insights on business, politics, technology and culture from some of the world’s biggest and fastest-growing economies. Eye on Asia’s bloggers include Asia regional editor Bruce Einhorn, Tokyo reporter Ian Rowley, Korea bureau chief Moon Ihlwan, Asia News Editor and China Bureau Chief. Dexter Roberts, and Hong Kong-based Asia correspondent Frederik Balfour.

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