TSM08906 VAM Assignment Two: Hong Kong Disneyland Management Analysis

This report, submitted by Chan Yi Ling, analyzes the management of Hong Kong Disneyland (HKDL), focusing on the visitor attraction management module TSM08906. It begins with an introduction to HKDL, its resources, products, and stakeholders. The report then delves into key management issues such as pricing strategies, unpredictable traffic, queue jumping, staff complaints, public dissatisfaction, lack of localization, air pollution concerns, differentiation of target tourists, overcrowding, and low competitiveness compared to rivals like Ocean Park. It assesses the effectiveness of management tools, including product innovation, the use of Key Opinion Leaders (KOLs), improved value-added services, the limited use of Fast Pass, and the utility of the mobile app. Finally, the report offers recommendations for improvement, including ticket promotions, enhancing the Fast Pass system, improving staffing management, developing featured attractions with local characteristics, and conducting special events to increase attractiveness. The report concludes with a summary of the findings and recommendations, providing a comprehensive overview of HKDL's management strengths and weaknesses and suggesting strategies for enhanced performance and visitor satisfaction.

Hong Kong Disneyland
Chan Yi Ling (40510596)
The School of Continuing and Professional Education, City University of Hong Kong
Edinburgh Napier University
TSM08906 Visitor Attraction Management
Ms. Anna Leask
December 23, 2020
Word count: 1994

TSM08906 VAM Assignment Two
Content
Content...........................................................................................................................2
Introduction....................................................................................................................3
Core Resources, Products & Stakeholders.....................................................................4
Key Management Issues................................................................................................5
Effectiveness of the Management Tools........................................................................9
Recommendations........................................................................................................12
Conclusion....................................................................................................................15
References....................................................................................................................16
Appendices...................................................................................................................17
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TSM08906 VAM Assignment Two
Introduction
Hong Kong Disneyland (HKDL) is located on Lantau Island in Hong Kong's New
Territories. HKDL is the essential part of Hong Kong Disneyland Resort, including
the Inspiration Lake, Hong Kong Disneyland Hotel, Disney's Hollywood Hotel, and
Disney Explorers Lodge. The construction and operation of HKDL are managed by
Hongkong International Theme Parks Limited, owned by the Hong Kong Special
Administrative Region Government and The Walt Disney Company.
The park has reached 35 hectares and day capacity of 42,000 visitors and themed with
fairy tales and Disney characters with the slogan "The happiest place on earth". The
annual attendance hit 6.5 million in 2019, about 41% Hong Kong visitors, 33% from
Mainland China, and 26% from other countries (HKDL, 2019).
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TSM08906 VAM Assignment Two
Core Resources, Products & Stakeholders
The most critical resource of HKDL is the excitement and dreamy atmosphere that
Disney always creates to the people. Other is its human-made fantasy park. The park
composed of the Main Street, U.S.A., Grizzly Gulch, Mystic Point, Tomorrowland,
Toy Story Land, Adventureland, and Fantasyland seven themed areas. (Figure 1 show
the current Hong Kong Disneyland distribution.
The core product includes talk and photo-taking with the entity Disney-characters, the
thrill rides with various Disney theme, live performances, souvenirs, food &
beverages, hotels, and all items bring the magic of Disney stories to real life.
The stakeholder of HKDL including Hongkong International Theme Parks Limited,
the Government of the Hong Kong Special Administrative Region, the Walt Disney
Company, employees, visitor, residents, Hong Kong taxpayers, Hong Kong Tourism
Board, and its competitors.
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TSM08906 VAM Assignment Two
Key Management Issues
(1). Pricing
The HKDL mainly targets tourists from Hong Kong, Mainland China, and
Southeast Asia (HKDL, 2019). However, the Chinese are price-sensitive since
many alternative theme parks in China sell a low-ticket price. HKDL set their
standard 1-day ticket price at HK$639 now. It is too expensive as two
competitors, the Ocean Park and Shanghai Disneyland set the price on HK$498
and HK$475 only. Moreover, the entrance fee was account in Disneyland
revenue about 30% only (Zhu & Xu, 2010), but the high-ticket price has
discouraged many tourists from visiting.
(2). Unpredictable Traffic
Different to Tokyo Disneyland has a designated date of admission on the ticket.
HKDL Standard Day ticket could use on any valid day without any booking to
provide a flexible service to the tourists. However, the strategy has created the
difficult to predict the accurate number of daily visitors. Therefore, the issues of
understaffed, overstaffing would occur easily and lead to a worse service
provide.
(3). Queue Jumping
The issue of cut in line is serious in HKDL. Many tourists reflect that they had
met the queue jumper when leaving a gap open for a second (Choi, 2012). One
representative line up for a large group of patrons was also often occurred in
HKDL. Nevertheless, no rule or staff would forbid the queue jumping, so the
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TSM08906 VAM Assignment Two
experience of other tourists was affected.
(4). Staff Complaint
Since the HKDL was opened, they are stung by the staff complaints. The staff
union protests that HKDL has unfair pay scales and crews were overworked on
insufficient break times, leading to occupational injuries (Choi, 2012). Those
complaints of the staff influence the image of HKDL seriously, the high churn
rate of staff would lead to more inexperienced staff and more training cost for
new staff.
(5). Public Dissatisfaction
HKDL obtain the government as a stockholder and enormous investment in the
park. The use of public money was one of the main focus of the taxpayer.
However, HKDL always lost, and the government never gain any dividend
before. The continuous appropriation arouses the resident dissatisfied, and more
and more voices claim the government stops the unequal treaties.
(6). Less localization
Disneyland ideal development model is to highlight the local characteristics.
HKDL is self-centred, not serious about localization, and not adjusting local
characteristics and Asian consumers. Therefore, Disneyland fans and most
tourists have no reason to visit a theme park similar to America Disneyland but
have fewer unique rides, small and expensive.
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TSM08906 VAM Assignment Two
(7). Air Pollution
The scholars have pointed out that the setting of fireworks could cause severe air
pollution. HKDL's fireworks' location is only 2.7 kilometers with Discovery Bay
and Peng Chau; residents worry about air pollution is harmful to their health
(Environmental Resources Management, 2005). Although the monitor of noise
and air was taken, the resident repute the sampling is less and not accurate (The
statistics of sampling can be seen in Table 1.) HKDL refused to use
environmentally friendly fireworks due to technical limitations. The decision and
response to beget resident resentful.
(8). Differentiation of Target Tourists
Hong Kong was a busiest and crowded city in the world. Although Hong Kong
also mainly targeted on Chinese tourists, they came for shopping. The tourist in
the "shopping paradise" have a different travel purpose with the HKDL targeted
customer. When Disneyland sells "the happiest place on earth" to the family with
kids, Hong Kong might not be a good vacation destination to those travellers,
and they would like to visit Disneyland in other cities. The differentiation of
target tourists between Hong Kong and the HKDL lead to the low entrance rate.
(9). Overcrowded
As the smallest Disneyland has a capacity of 42,000 visitors in 35 hectares only.
The visitors' review that HKDL was overpack with people on holiday; they need
to spend a long time queuing the rides even for the food. Especially in the
Chinese holiday, the park was full of people, and every ride takes more than an
hour for line up. The overcrowding problems lead to disappointed in the visitors
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TSM08906 VAM Assignment Two
(Loeffler & Church, 2015).
(10).Low Competitiveness
As the rival of HKDL, the Ocean Park (OP) has more thrill roller coasters, rapids
ride, aquarium, cable car, Ferris wheel, Ocean Park Tower, Ocean Theatre that
HKDL no similar product. Apart from the Disney characters, restaurants, and
hotels, HKDL has fewer advantages than OP. Besides, OP has designed various
festival activities such as the Halloween Fest against local teenagers has attracted
more and more visitors every year. Nonetheless, HKDL management cannot take
advantages of the brand to attract more visitors.
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TSM08906 VAM Assignment Two
Effectiveness of the Management Tools
(1). Product innovation
HKDL has always insisted on applying the "three-three" system. One-third of the
amusement facilities are eliminated, and one-third of new, or updated
entertainment content and facilities were added every year (Yao, 2017). The
continuous products iteration could give visitors a sense of freshness, allowing
visitors to go to the park more than once. The strategy is useful to extend their
tourism life cycle from stagnation to reduced growth or rejuvenation.
Furthermore, HKDL expanded the original Disneyland area by 25% and the
number of visitors to Hong Kong Disneyland increased by 14%. In 2013, it
finally managed to turn losses into profits (HKDL, 2013).
(2). Key Opinion Leader Improve Interaction
HKDL cooperates with influential local celebrities and Key Opinion Leaders
(KOL) such as Kris Wu, Aaron Kwok, Taiwan KOL Mrs Banana. The posts and
videos of KOL and their families travelling to HKDL have attracted netizens'
attention, significantly increasing the amount of discussion and interaction. The
strategy effectively increases focus, the best example is Mrs Banana's princess
dress reservation, and hotel choice has aroused extensive discussion, netizens
hope to participate in the mentioned activities.
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TSM08906 VAM Assignment Two
(3). Improve Value-Added Services
At the end of April 2017, Hong Kong Disney's third hotel officially opened, and
the total number of hotel rooms in the resort increased to 1,750. The netizens
comments focused on the restaurants and food of the hotel and took the initiative
to ask about the discussion of three Disney hotel recommendations and package
discounts. The strategy is a success as fiscal 2017 the total revenues raised by
8%, both hotel rooms and tickets have increase sell (HKDL,2017).
(4). Less Use of Fast Pass
The fast pass service was designed to convenience the visitor to spend less
waiting time in queuing attraction, and the visitor could enjoy other rides and
return on a specified time. However, HKDL only provides this service on two
attractions. By comparison, the Downtown Disney District provides the service
on 24 attractions. Also, they sell Disney MaxPass to strengthen the service and
earn more. Hence, the fast pass strategy in HKDL is insignificance by low
coverage, and the service cannot help visitors shorten line up most effectively.
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TSM08906 VAM Assignment Two
(5). Useful Mobile App
HKDL has launched its own mobile app "Hong Kong Disneyland®" to
convenience visitors to enjoy the park. There are five primary functions, to check
the waiting time of each facility; to check the Disney-characters where and when
to appear; to know current location and navigate to other attractions; to query
various information; and to book the restaurant table. The app is available in
English, Simplified Chinese, Traditional Chinese, Japanese, and Korean. The
mobile app is useful and user-friendly to the visitors and reduces the cost of
printing paper leaflets.
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TSM08906 VAM Assignment Two
Recommendations
(1). Ticket Promotion
The high-ticket price has discouraged many tourists, mostly the locals.
Therefore, HKDL should focus on the local market more for stable revenue.
HKDL could reference their competitor, Ocean Park. The OP provides a free
ticket for Hong Kong residents aged 65 or above, persons with a "Registration
Card for People with Disabilities", and Hong Kong residents on the day of the
birthday. The policy might lead to a loss of those free entry. Still, it has elevated
the image, increase hotels, catering, and souvenirs' revenue and the chance of
selling the annual pass. Moreover, HKDL could often launch promotion. A price
reduction could attract visitors in the off-season, present a new attraction faster
with a broader audience.
(2). Fast Pass
HKDL could improve the service of the fast pass to increase visitors' satisfaction.
For example, the fast pass system could apply to more attractions and
entertainment in the park. It is useful to shorten the queue and increase visitors'
itinerary and experience. As the excellent mobile app was suggested to the
visitor, the fast pass's selection process could be carried on the app. So, the
visitor could avoid unnecessary walking back and forth. On top of that, HKDL
could sell it as a value-added service; customers who value time and experience
would be willing to pay for it.
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