SCMP Saturday, September 1, 2001

Taking our Mickey?


It started on Monday with a headline in a Beijing newspaper. "Disney: 2008 in Beijing. Disneyland is great," declared the item on the front page of the Beijing Evening News. With a delegation of Disney executives in the capital for the launching of a Chinese-language Web site, the newspaper claimed a company source revealed Disney was considering building a theme park to tie in with the 2008 Olympics.
Wishful thinking it might have seemed, but it opened up the possibility that another Disneyland could emerge, on the mainland and in competition with the theme park being built in Hong Kong.
Disney's spin doctors were quick to deny the report. A "Mickey Mouse" story, it seemed. However, they were unable to rule out another Disneyland development in China as Hong Kong waits for its $27.7 billion project.
So, when Walt Disney chief executive Michael Eisner led a press conference in the Island Shangri-La hotel ballroom on Thursday, he sought to play down the threat to the SAR's Disneyland from another park built by the company on the mainland.
Although he dismissed the Beijing report as "erroneous", it became clear that Disney believes the market is big enough to sustain at least two parks in China and is eyeing another location.
It is likely to be in Shanghai or Beijing, to fulfil Mr Eisner's criteria of being "distant" enough from the SAR not to impinge on Hong Kong Disneyland's market.
He revealed the company was in constant talks with authorities in the mainland's administrative and business capitals.
The likelihood of a second theme park for China left some in Hong Kong feeling betrayed - although others said it was only to be expected. "There is bound to be an impact on Hong Kong, as our Disneyland also targets mainly mainland tourists," said Tung Yao-chung, the executive director of the Travel Industry Council of Hong Kong.
Frontier legislator Cyd Ho Sau-lan, a critic of the Hong Kong Disneyland project, said the company's admission made a bad deal seem worse. She was referring to the terms of the agreement hammered out by Disney and the SAR Government, which analysts said was weighed heavily in the American corporate giant's favour.
The deal, announced in November 1999, required the Government to pump $22.45 billion into the project while Disney invested $2.45 billion. The Government will hold a 57 per cent share of the joint venture and Disney 43 per cent.
Opening another Disneyland north of the border would limit the opportunities for Hong Kong to capitalise on the advantages, Ms Ho said. "When it opens, we will have a three- to five-year window, when more visitors are expected to come, in which to find something in our own culture which we can use to keep people coming back," she said.
Hong Kong will be the second Asian location for Disney. A marine park will open at Tokyo Disneyland next week. Hong Kong beat off competition from Shanghai and Zhuhai, the border town opposite Macau, to host the first park in China.
The expectations of an SAR Disneyland are high. The Government invited it to build a park in the wake of the post-1997 Asian financial crisis in a bid to stimulate economic growth, create jobs and repair the drop in tourism.
An academic who has studied theme parks on the mainland, associate professor John Ap of Hong Kong Polytechnic University, said the concerns expressed by the SAR tourism body were understandable but another park in northern China was unlikely to damage greatly the market in southern provinces.
With 70 per cent of the Hong Kong park's visitors expected to come from the mainland, "Disney sees the park as primarily tapping into the mainland market", he said. The SAR's local population of 6.6 million was not enough to sustain a Disneyland.
It could be viewing China in a similar way to its domestic market in the United States, where few visitors from the West Coast bothered to visit Disney World in Florida and few visitors from the East Coast bothered to visit Disneyland in California, Dr Ap said.
An estimated 1.2 million extra tourists are forecast by government economists to come to the SAR to visit Disneyland when it opens in 2005. The mainland visitors would mainly come from Guangdong and Fujian provinces, which were "relatively well-to-do", Dr Ap said. "Another thing Disney needs to consider in its assessment is to what extent can the average Chinese afford to visit Disneyland," he said, quoting expected entry charges of US$35 (about HK$272) to US$40.
Dr Ap was confident Disney would not enter into any mainland deal which could harm Hong Kong's interests. "When anyone enters into any business transaction, the deal must be seen to be fair and of mutual benefit to both parties. I am sure Disney will not do anything to jeopardise public opinion in Hong Kong," he said.
It was well known for the past decade that Disney had been seeking to establish at least one theme park in China. "The fact this has been raised doesn't bring any surprises," said Dr Ap.
When speculation about a possible Disney theme park being opened in mainland cities arose following the 1999 deal between the corporation and the SAR, both sides sought to play down the impact on Hong Kong.
"If we're to factor in the possibility of other Disney theme parks around the rest of the region, we should also factor in the benefits for the Hong Kong economy: there are pluses and minuses," said then-commissioner for tourism Mike Rowse, who led the government negotiating team.
Howard Young, a Cathay Pacific Airways executive who represents the tourism sector in the Legislative Council, said after this week's revelations: "I don't feel betrayed. I was certainly under no illusion that if we got Disney it would stop them from looking at the rest of China. Whether it will have any adverse effect or impact on Hong Kong depends on the time frame."
China's population of 1.2 billion could sustain at least two Disney parks beyond the next 10 years, Mr Young said.
He said a theme park in Beijing could be compatible with Hong Kong in the way Disneyland in Anaheim, California, had Magic Mountain and a focus on entertainment, compared with Walt Disney World in Orlando, Florida. "If Shanghai gets it, it will affect Hong Kong more than Beijing," he said, adding Shanghai was closer to southern provinces than the capital was and its climate was similar to the SAR's.
An attraction for tourists to visit Beijing would be its historical sites, such as the Great Wall and Forbidden City. "People coming to Hong Kong can only see a mini-Great Wall - and then only if they choose to visit a theme park in Shenzhen," Mr Young said.
But he added: "I believe Hong Kong as an attraction, even in the long run, has [the advantage] over Beijing. I don't really see how the water rides in Beijing in January can be enjoyable when the temperature is zero."
It was only a matter of time before Disney decided to build another attraction, given the large population around Beijing and Shanghai, said Sunny Kwong Kai-sun, professor of economics at the Chinese University of Hong Kong.
Although a park in Beijing was likely to have little impact on the SAR, the damage could be heightened if mainlanders experienced difficulty in obtaining visas to visit Hong Kong. "The critical part is whether the Hong Kong Government can relax visa controls," he said.
Officials plan to increase the number of two-way permits issued to mainland visitors for the opening of the park.
Disney's Mr Eisner identified a problem with border-crossing facilities when he travelled from Shenzhen, where he had visited other theme parks, to Hong Kong. "I hope in five years the lines are longer but quicker to get through," he said.
Hong Kong officials will be hoping Disney keeps any plans for another park on hold until the local park can turn a profit. Analysts warned that the Government would have to foot the bill for losses. "The Hong Kong Government will be in trouble. It will be shouldering most of the losses," said Dr Kwong. Disney would mostly be unaffected by any shortfalls, as it received a share of turnover from entry fees and sales of merchandise and food.
The corporation yesterday denied its timetable for opening was slipping. When the project was announced in late 1999, officials said it would open in 2005. But on Thursday, Mr Eisner spoke of its launch in "four or five years' time, 2005 or 2006".
"With any project, it is difficult to predict the timing. There is a window," said Irene Chan Man-tuen, Disney's corporate communications director for Hong Kong.
Glenn Schloss ( ) is a staff writer for the Post's editorial pages.