Disney’s Buzz Lightyear Battles Sharks in Hong Kong Park Contest

Hong Kong Disneyland Parade
A Hong Kong Disneyland actor performs during a parade in Hong Kong, China. Photographer: Dale de la Rey/Bloomberg

For 15 minutes, 11-year-old Lily Li stared through a glass panel at hammerhead sharks and bluefin tuna in Hong Kong’s newest attraction, Aqua City.

“It’s like a dream,” said Li, from China’s Guangdong province, who crowded with her mother and about 50 others at the window, the width of a basketball court, on the packed Jan. 27 opening day.

The egg-shaped building, with nightly water shows, is part of a HK$5.5 billion ($707 million) redevelopment by government-owned Ocean Park to profit from a jump in mainland Chinese visitors. The revamp adds pressure on Walt Disney Co.’s Hong Kong Disneyland, which has trailed Ocean Park since its 2005 opening, has yet to make a profit, and is spending HK$3.6 billion on its own expansion, including “Toy Story Land.”

“Home-grown theme parks like Ocean Park have proven that they can compete with a big global corporation like Disney,” said Jonathan Galaviz, managing director of Galaviz & Co., a tourism industry economist. “As consumer disposal income increases in Asia, the first place that Asian consumers will spend that money on is travel, tourism, and fun experiences.”

The tussle between Hong Kong Disneyland, which lost $92 million last year, and Ocean Park underscores the importance of tourism in Asia, with countries and cities including Singapore and Thailand getting as much as 16 percent of gross domestic product from visitors, according to an October report by HSBC Holdings Plc. Hong Kong, known for its dim sum restaurants and luxury brand shops, tops the list of the 14 places HSBC surveyed.

Tickets Sold Out

Ocean Park sold all its admission tickets for Feb. 5 to Feb. 7, with attendances during the Chinese New Year holidays, started last week, up as much as 50 percent from a year ago, spokeswoman Una Lau said. Disneyland’s two hotels were almost fully-booked and attendances rose almost 10 percent for the period, spokesman B.C. Lo said, declining to give specific figures.

Mainland Chinese tourists, the only group of visitors to increase spending in Hong Kong between 2008 and 2009, are expected to more than double global spending to $110 billion by 2015, according to HSBC. The Chinese made about 54 million outbound visits last year, the official Xinhua News Agency said on Jan. 11, citing the nation’s tourism academy. That’s more than the number of people living in South Korea or Spain.

“We’re doing a lot of pre-arrival promotions” in China, Andrew Kam, managing director of Hong Kong Disneyland said in an interview. “We need to make sure they must come when they are in Hong Kong.”

Narrow Losses

The park, which cut its annual loss to HK$718 million from HK$1.3 billion a year earlier, is marketing in secondary Chinese cities including Jiangsu, Ningbo, Wenzhou and Shaoxing, Kam said. It may soon introduce a HK$450 multi-day pass for Guangdong visitors, he said.

Walt Disney’s profit in the three months ended Jan. 1 jumped 54 percent to $1.3 billion on higher theme-park attendance and advertising sales growth at ESPN. The parks in Paris and Hong Kong saw higher spending, the company said Feb. 8, without providing specific numbers.

“Mainland arrivals spend huge sums of money on shopping, and they are the big drivers for Hong Kong retail sales,” said Paul Tang, a Hong Kong-based economist at Bank of East Asia Ltd., “Chinese spending will not come down but keep going up.”

Chinese visitors to Hong Kong jumped 26.3 percent last year.

Record Visitors

Attendances at Disneyland rose 13 percent to 5.2 million for the fiscal year ended Oct. 2, with mainland visitors increasing 32 percent, according to the company. That’s behind the record 5.4 million paid visitors last year at 34-year old Ocean Park, which houses pandas An An and Jia Jia.

“Ocean Park has grown even in the midst of all other developments,” Chief Executive Officer Tom Mehrmann said in an interview. In 2004, there were 15 theme parks in Asia excluding India, and by last year there were 35, he said. He expects visitors from China to rise as much as 15 percent this year.

“Every city is working hard on promoting their tourism,” said Joseph Tung, executive director of Hong Kong’s Travel Industry Council. “Fierce competition is unavoidable.”

Genting Singapore Plc opened its Universal Studios theme park last year, with attractions based on the Jurassic Park movies and science-fiction television series Battlestar Galactica.

“Fifty million Chinese traveled abroad last year, so they can easily fly to Singapore, the U.S. or other markets that are fun,” said Shaun Rein, Shanghai-based managing director of China Market Research Group.

Shanghai Competition

Walt Disney and state-owned Shanghai Shendi Group Co. plan to jointly open the first Disneyland Park in China in Shanghai. The Shanghai government is spending 40 billion yuan on infrastructure for the park, expected to open in 2015, in the city’s Pudong area, according to the Shanghai Daily.

“We’ll probably go to Shanghai Disneyland instead of coming to Hong Kong in the future because the commute from Beijing is shorter,” said Zhang Wensheng, 40, who went to the Hong Kong park for the first time last week with his six-year-old son. “I heard the park in Shanghai will be much bigger in size too.”

Hong Kong Disneyland, 47-percent owned by Burbank, California-based Walt Disney, will fight back later this year with the unveiling of “Toy Story Land,” based on the exploits of toy spaceman Buzz Lightyear and his cowboy friend Woody. The latest film in the series was nominated for an Academy Award for Best Picture. Disney is hiring musician Danny Elfman to compose music for another attraction “Mystic Point,” which along with “Grizzly Gulch” will be ready by 2014.

Too Few Rides

The expansion may address tourist complaints that the smallest of the Disney theme parks needs more rides, said China Market Research’s Rein. Hong Kong Disneyland has fewer hotel rooms than counterparts in Paris and Tokyo.

“Disneyland seems a bit small and it feels like a waste of time,” said Ge Lin, 36, a visitor from Guizhou who prefers Ocean Park because of the pandas and marine attractions.

Disneyland’s Kam said the expansions will help. The park is also planning to lure more visitors from other parts of Asia with an Indian restaurant and looking at introducing Halal food to cater to Muslims, he said.

For now, he’s relying on Chinese tourists like Susan Liu, who bought her family of four to Hong Kong from China for the first time last month. They stayed in Disneyland’s hotel, spending 7,000 yuan ($1,063) as the children acquired Mickey Mouse bags full of princess outfits and toy cars.

“We came here because of Disney,” said Liu, 33, as she watched her 8-year old daughter dash around in a Tinkerbell dress.

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