Case Study # 11 : Hong Kong Disney

The first Disney resort in China was opened in Hong Kong in September 2005. The theme park is built on a 250-hectare plot of reclaimed land at Lantau Island, which was, until the arrival of Disney, more famous for its giant Buddha. The resort is reached quickly and cheaplyfromHong Kong by an extension of the Mass Transit Rail system (MTR). The park is small compared to other Disney resorts worldwide. The park is themed around four lands, which are typical of other Disney resorts. The lands are Main Street, USA; Tomorrowland; Adventureland and Fantasy-land. Each of these lands comes with star attractions. However, possibly due to the comparatively small size of Hong Kong Disney some famous attractions such as Small World and Pirates of the Caribbean are missing. The resort is the result of collaboration between Disney and the HongKong government, which dates back to 1999 or two years after HongKong returned to China from Britain. The park was visualized by the Hongkong government as part of its strategy aimed at revitalizing the economy after the Asian financial crisis. Indeed, the HongKong government was the biggest investor, investing HK $3.5 billion in the project. Its aim in doing this was to make Hong Kong a focus for tourism inSoutheast Asia. When the park was first mooted cultural fit was not seen as a problem. The reason for this is that HongKonghas had western ties for over 100years and was a British colony until 1997. Accepting Mickey and his friends would be natural; Hong Kong would be, and has always been, open to other cultures. Some commentators said that Anaheim, California had been moved to HongKong.Setting up Disney parks outside of America is not new and Disney appears to have remembered the lessons of its French venture, which at one stage was called a cultural Chernobyl and has made changes that it Chinese culture. The first and most obvious is the food. Thecuisineinthetheme parkland in the Disneyhotelsisregional, even the burgers are spicy pork. Second, although possibly not apparent to the Western eye, is the use of the lucky color red in the park and, in keeping with the lucky theme, the park has been laid out using Feng Shui techniques to ensure its good fortune. Similarly, the unlucky number four is missing. Further, the signage around the park is in Chinese. Next, the HauntedMansion attraction is missing as an attraction that deals with spirits and ghosts could be thought of as disrespectful to families in China. Lastly, the prices are much lower than other Disney attractions worldwide to take into account the Chinesepocket. Notwithstanding the changes that have been made, early results forHongKongDisneyhave been disappointing. There are reports that Disney has not made its target of 5.6 million visitors in its first year. The main problems that may have led to this disappointment are first, the cuisine. The cuisine may have been designed to suit the local taste but at least one item of the local cuisine - sharks fin soup had to be withdrawn from Disneyhotel wedding menus after agitation and complaints from local environmentalists groups concerned about the fate of the sharks. Second, the Chinese consumers appear to be confused about Mickey and the history of some of the rides. Customers have complained about the small size of the park and the lack of the big thrill rides. Only one ride in the entire park, Space Mountain is considered to be abig thrill ride. Third, Disney employees or cast members have complained about pay and conditions. Their complaints mainly concern long hours, lack of breaks, poor treatment by the parks paying guests, low pay compared to other Disney parks and differentials between cast members. Of the 5,000 original employees, 1,000 have left. In the west, this would be a relatively low number but is considered highinHongKongwherethe expectation is to stay with an employer. Further, some of the castmembers feel overqualified for the jobs that they are doing. A sign of the employees misgivings is that the HongKongDisneyCast Members Union has been formed, which is aimed at improving pay and conditions.Next, Disney was dealt with a public relations blow when it was accused of exploitation for the alleged low sweatshop wages that are paid to workers who make Disney merchandise. This relates to workers in the Guangdong province of China who, it is alleged, are paid around$2perday, which is less than minimum rates and are working excessively long hours. This has led to demonstrations against Disney in HongKong. Publicrelationsweredealt a further blow when there were claims of infestations off leasing resort hotels. Finally, although it may not have made its target visitors, it miscalculated the impact of the Chinese New Year holiday. It was unable to cope with the demand at Chinese New Year, which is one of the three golden holiday weeks. The impact of this was more damage to public relations as some visitors were unable to enter the park and there were reports of the perimeter fences being scaled by unhappy would-be guests.

In summary, Disneys problems have been a combination of cultural misunderstandings, poor public relations and human resource problems. It has not been slow in responding to some of the problems. Disney has plans to increase the size of the park when more land is reclaimed. This will enable it to add more of the big thrill rides. It has also set up an educational center in the park, the aim of which is to educate Chinese consumers about Mickey and the significance of some of its rides such as the teacups. It is dealing with its other problems as it goes along. How these problems are overcome or otherwise will be important for it when it opens up its next venture in Shanghai. Cultural problems in Shanghaimaybe more pronouncedandtheChinese mainland government maybe much wary of the impact of Disney on Chinese culture.

Case study questions

1. Disney made some changes to its operation with regard to culture. What other things should it have considered?

2. Disney is due to open in Shanghai in 2010. What lessons should Disneylearn from its HongKong operation? What other factors might it take into account?

(100 words or more for each question)