Welcome Aboard On The Ride To Rejuvenate The Magic of Hong Kong Disneyland!

WELCOME ABOARD ON THE RIDE TO
REJUVENATE THE MAGIC OF HONG

KONG DISNEYLAND!
WITH YOU TODAY…
INTRODUCTION
WHAT HAPPENS NOW?
WHAT HAPPENS TOMORROW?
WHAT HAPPENS IN THE FUTURE?
IMPLEMENTATION AND IMPACT

The issues of HKD and root causes The recovery strategies Long term growth strategies
WHAT WHAT WHAT

HAPPENS HAPPENS HAPPENS IN
NOW? TOMORROW? THE FUTURE?
Collaborative
Revenue
Sharing Model
Culture
Festival
Theme
Edutainment
Experience
Deteriorated
brand image Management
Attendance & Restructuring
revenue target Management ESG Partnership
not achieved oversight department
EXECUTIVE NOW TOMORROW IN THE FUTURE IMPLEMENTATION RISK & IMPACT

WHAT WHAT WHAT

Buckle Up! The journey to revamp brand image and reach growth
target will be rough but necessary for future expansion

Collaborative
Revenue
Sharing Model
Culture
Festival Theme
Edutainment
Experience
Deteriorated
revenue target >> Management ESG Partnership
WHAT WHAT WHAT

Collaborative
Revenue
Sharing Model
Culture
Festival Theme
Edutainment
Experience
Deteriorated
Hong Kong Disneyland is established on the premise of exotic
American experience…
The Entertainment
Value propositions
Conglomerate
“Disneyland is dedicated to the ideals, the dreams,

Global presence, well-beloved brand assets and the hard facts that have created America…”
“Themed Park” - childhood fairytales, “recognized leader in experiential training,

leadership development, benchmarking and
exotic adventures, 19th American West, cultural change for business professionals across
etc. the globe...”
“The Disney Way” is placed at the soul of the park,

Other revenue streams: merchandise, F&B,
the motivation for every “cast member” to strive
resort, etc. for Disney’s own definition of excellence”
Key success factors
Heritage of creativity, fantasy, and imagination create Consistent Disneyland experience and services due to “the
unique Disneyland experience and characters Disney Way” trained and learned by cast members
Source: Case analysis

Hong Kong Disneyland is established on the premise of exotic
American experience…
The Entertainment
Value propositions
Conglomerate
“Disneyland is dedicated to the ideals, the dreams,

Global presence, well-beloved brand assets and the hard facts that have created America…”
Since then, Disneyland has engaged in international expansion
“recognized leader in experiential training,
strategy by “bringing
“Themed Park” - childhood fairytales,
exotic adventures, 19th American West,
the original Disneyland model to a new
leadership development, territory,
benchmarking and
cultural change for business professionals across
etc.
and then, if possible, adding a specialty theme the park.”
globe...”
“The Disney Way” is placed at the soul of the park,

Other revenue streams: merchandise, F&B,
the motivation for every “cast member” to strive
resort, etc.
But at what mistake? for Disney’s own definition of excellence”
Key success factors
Heritage of creativity, fantasy, and imagination create Consistent Disneyland experience and services due to “the
unique Disneyland experience and characters Disney Way” trained and learned by cast members

Tokyo was a success…
…but Euro Disneyland was

the first disaster, deemed as
“cultural Chernobyl.”
It didn’t end there… Hong

Kong Disney is another
story…
Applying such management model did not work in Hong Kong market,
leading to a chronological set of incidents….
Company spokeswoman
Poor working conditions The Park is quoted
Welcomes its Chaos suggested that Chinese visitors The move aroused
and insufficient as having poor
first customers reported were not familiar with the protests
manpower are reported staff retention
14/9/2005 10/10/2005 flexible ticketing system
12/9/2005 Guests complain of 23/9/2005 1/2/2006 2/2/2006 26/8/2006

Refuse to verify or
long hours, waiting to
disclose the breakdown
be checked in at Disney
of construction costs The ticketing fiasco occurs till 4/2/2006
hotels
Set of chronological incidents can be summarized as HKD not properly addressed each of the ESG pillar
Environmental Social Governance

• Localized initiatives but failed to secure • Unable to ensure customer safety • Continually falling in wrong decisions, resulting by
environmental goal the centralized decision maker (Americans)
• Irresponsible publicly response about the crisis
• Dramatically being accused by green groups for the • Unaccountable and non-transparent
• Mass staff exodus brewing in the Park due to poor administration of the Disney joint venture
shark’s fin soup and refusing to switch to the more
working condition of both character performers and
environmentally friendly fireworks
executive staff

…which has resulted in disappointing performance
The Park summed up their performance by the …was caused by the sliding downhill of The Park’s brand image through public
target miss of 0.4 million attendances… scrutiny and frustrated customer experience
0.4
70% of respondents had a negative impression of the public investment in HKD
Missing
Reality
44% of respondents don’t believe this investment is a “fair value”
5.2
Local consumer watchdogs and members of the travel trade threatened to take
legal actions against the Park
“I won’t come again, even if I am paid to” - said one respondent

Attendance record in First Year of The Park
(in millions)

The root cause can be traced through HKD’s management oversight in (1) inflexible
management structure and (2) vision oversight on local responsiveness
MANAGEMENT OVERSIGHT
Inflexible management Vision oversight on local

structure responsiveness
● US-centric management style: triggering toxic

internal environment of the company ● Tailor products’ offering to match local
preference, but not actually putting in their
● American decision makers haven’t equipped shoes during implementation phase
local insight to precisely assess context
● Unable to ensure the holistic initiative, adapt
● Intransparent and unaccountable management each important stakeholders’ requirement
style

How can Hong Kong Disneyland turnaround its
management oversight to regain public trust and set a
strong foundation for longer term growth?
WHAT WHAT WHAT

Collaborative
Revenue
Sharing Model
Culture
Festival Theme
Edutainment
Experience
Deteriorated
First, CSR department will tackle severe mistakes made The Park fail to gain
public trust, ensure every initiatives secure each stakeholder’s goal
What does CSR department do? CSR department will help The Park gain….
Developing policies of company's ethical, sustainable

Develop a concrete system, hierarchical workflow to validate
and environmental responsibilities.
The Park’s initiative
Ensuring a company has a positive impact on local

communities and the environment.
Reduce the public scrutiny, gradually gain public trust in a
long run
Raising public awareness of a company's social

responsibility commitments through marketing
Help top manager access deeper insight to precisely make

decision
Planning and deploying long-term sustainability
strategy, aligning with Walt Disney ‘s CSR strategy
Tap into local taste, but still ensure other sustainable aspects
Conducting research into best practice
Source: GoConstruct

However, as making the long-term strategy work incrementally, the
Park should have immediate response given the tremendous trust lost
Hong Kong-backed and Hong Kong-based funds are ideal strategic sponsor to hit, in line with the effort of cultivating public trust
Invest in Hong
Kong ESG funds
Partner with Hong Kong-based ESG

organizations
With the powerful back-up of Hong Kong government to The Park, reaching out organizations and ESG funds is a feasible
approach for The Park to make a “quick win” in terms of regaining public trust

Secondly, HKD need to renovate the management structure to help the
Park move forward
Initiatives HKD CEO
Communicati
Localize management board / org. structure Human
Operations Financials ons & Public Marketing Sales
Technology,
Legal
to make tailored, better local sensitivities resources Digital & Data
Affairs
decisions
⇒ Source local C-suite management via headhunt company for each of department
● Bonuses for overtime

Enhance employee
benefits to improve ● Annual healthcare & medical check-up (insurance) for employees
employee satisfaction ● Employees’ families benefits (i.e., provide annual free tickets for employees’ family
Internal and retain staff
initiatives to members - one/year)
incentivize
employees
satisfaction and
retention
Weekly employee Conduct weekly employee survey (satisfaction, working conditions, etc.) to measure
survey employee net promoter score (eNPS)

In addition, holding “Capital Markets & ESG Day” to make information
transparent to the external stakeholders
The CMED serves to inform its strategic Cases in point

initiatives to investors, analysts, and public in a
clear and transparent manner
● During the day, the Executive Leadership

Team provides insights into HKD’s growth
strategies, share details of strategic
initiatives and announce new long-term
financial targets to the media
● If news or price-sensitive information will

be disclosed during the CMED ⇒ publish a
press release upfront.
and many
more…
Source: companies’ websites

In addition, holding “Capital Markets & ESG Day” to make information
transparent to the external stakeholders
The CMED serves to inform its strategic Cases in point

initiatives to investors, analysts, and public in a
clear and transparent manner
As the stakeholder landscape broadens, investing real time and energy

●
into HKD’s Capital Markets & ESG Day, helping to elevate it beyond the
During the day, the Executive Leadership
Team provides insights into HKD’s growth
more
strategies, humdrum
share details of strategic and uninspired presentations will help foster
initiatives and announce new long-term
financialmeaningful
targets to the mediaengagement with stakeholders, strengthening the brand
image in the long run.

● If news or price-sensitive information will
be disclosed during the CMD ⇒ publish a
press release upfront.
and many
more…

But what will it take for Hong Kong Disneyland to
achieve its ambitious attendance and revenue target,
making it the leading tourist attraction in the
amusement park market?
WHAT WHAT WHAT

Collaborative
Revenue
Sharing Model
Culture
Festival Theme
Edutainment
Experience
Deteriorated
There are 2 strategic pillars for HKD to boost attendance and revenue
Magical experience Magical collaboration
1 2 1 2
Collaborative Revenue Collaborative Support

Edutainment experience Cultural themed park
Sharing with Travel Agency Activity with Travel Agency

Firstly, Edutainment is a perfect combination to attract the target
customers to HKD
Chinese and Hong Kong are the …and family with young children is …with the preferences that HKD can
2 main customer bases of HKD… the travel segment that grow fastest… tap in to attract more.
Expected travel segment growth for Chinese travelers
Seeking to entertainment with
1
Multi-generational
1 = No growth educational elements
4 = Exceptional growth
family group
Seeking to cultural experience

Retired couples
and singles 2 through travel
Young professional
single travels
The growth of theme-park in the
3
Families with tourism categories for travellers
young children
Growth in travelers
Edutainment will be a preferable initiative for HKD to attract more target

audience and increase the visit frequency
Source: Cornell Hospitality Research Publications

HKD should develop edutainment experience through three perspectives
of memories to capture the preference of the target segment
Family Memory Science Memory Artistic Memory
● Virtual Reality Coasters: virtual journey

● Family Rides: pirate adventures, fairy tales, ● Workshop: create and personalize their own
through different scientific environments.
or cartoon characters. artistic mementos, such as ceramic
● Science Shows: shows, and presentations
● Shows and Parades: live performance of figurines,...
covering a wide range of scientific topics,
singing, dancing, acrobatics ● Interactive art exhibit: contribute to a
such as physics, chemistry, and biology.
● Character Meet and Greets: opportunities collaborative piece of art throughout the day.
● 4D Experiences: immersive, multi-sensory
for families to meet and take photos with ● Live painting or street art: engage visitors in
attractions that use special effects, such as
their favorite characters from movies. the theme park's artistic offerings.
wind, water, and smells.

HKD should develop edutainment experience through three perspectives
of memories to capture the preference of the target segment
Family Memory Science Memory Artistic Memory
Enhance knowledge, skills, and

Create an unforgettable experience for Create a unique and imaginative
interests in science and technology,
family to boost the connection between experience to develop sense of art,
contributing to positive educational
children & parents and preserving the spark creativity and encourage learning
and personal development outcomes
best memories together for both kids and adults
for both kids and adults

In addition, HKD should also incorporate culture element through HK
traditional festivals into theme park to attract customers
COSTUMES DECORATIONS
Embed the decorations of HK traditional festival

Embed the traditional seasonal festival costumes into
architecture into theme park to create an familiar and
theme park to demonstrate the HK culture value to
cultural atmosphere for customers during their visit
attract more customer during the seasonal festival
at festival
Demonstrate the China cultural values into the theme park to attract more customers during
their journey at HK traditional festivals

Secondly, Collaborative Revenue Sharing (CRS) aligns incentives
structure for HKD and Chinese travel agencies
Past incidents with

Result Solution
travel agencies
Tour operators who had to refund

Bad coordination with travel
part of the package’s costs to their
agencies/tour operators
customers
CRS will align incentives
structure and reconcile risks
between HKD and Chinese
Travel agencies were reluctant to travel agencies
sell HKD tickets in view of their thin Distrust travel agencies
profitability

Moreover, risk and revenue sharing method in CRS can help HKD
attract travel agencies and go deeper into Mainland China's market
TRAVEL AGENCIES CRS INITIATIVES CRS BREAKDOWN
Travel agencies will receive a distribution

of 25% from revenue generated from
selling tickets to their customers
(implicitly understanding for losses)
The other part of revenue (75%) will be

distributed to HKD
If travel agencies’ customers require them

to refund their tickets, the return amount
Better suited to adjust prices Better suited to adjust prices will be recognized on financials of both
properly and understand Mainland properly and understand Mainland HKD and travel agencies according to the
China’s customers’ behaviors. China’s customers’ behaviors. ratio.

Moreover, risk and revenue sharing method in CRS can help HKD
attract travel agencies and go deeper into Mainland China's market
TRAVEL AGENCIES CRS INITIATIVES CRS BREAKDOWN
Travel agencies will receive a

distribution of 25% from revenue
generated from selling tickets to their
customers (implicitly understanding
We are transferring from a wholesale distribution model to revenue for losses)
sharing, in order to align incentives and reconcile risks for travel agencies
with ours. The other part of revenue (75%) will be
distributed to HKD
If travel agencies’ customers require

them to refund their tickets, the return
Better suited to adjust prices Better suited to adjust prices amount will be recognized on
properly and understand Mainland properly and understand Mainland financials of both HKD and travel
China’s customers’ behaviors. China’s customers’ behaviors. agencies according to the ratio.

Higher share of revenue and lower loss of refund will help HKD expand
their wholesales distribution model in Mainland China's market
REVENUE-SHARING MODEL PREVIOUS MODEL NEW MODEL
Travel agencies will receive a

Travel agencies receive a thin
higher share of revenue generated
commission from revenue
from selling tickets
25% in the first 5 years
30% in the next 10 years

Travel agencies absorb all risks
Travel agencies can share losses of
from refund requirements from
refund requirements with HKD
its customer

HKD needs to constantly keep track of its initiatives, strive for its goals,
to successfully create a stronger growth foundation beyond 2011
Strategies 2007 2008 2009 2010 2011 & onwards
Strategy
Officially go into operation
Budget planning planning
Hiring
Process &
ESG department Set vacancies and Onboarding Build process,
structure planning system
Budget
Deploy with partners, maintain relationship
planning
Develop strategic
Partnership alliances
Contact list
prep
Local sourcing via headhunt company
Management restructuring
Benefits policy
reform
eNPS survey; CMED (every year)
Edutainment experience development Edutainment experience applying into theme park

Magical experience
Festival culture decorations Festival culture decorations Festival culture decorations Festival culture decorations Festival culture decorations
Reach to all travel agencies Partnership with travel agencies to deep into Mainland China's market
Magical collaboration Building CRS scheme
Support travel agencies to build for business and selling tickets

Some risks have to be mitigated
Risk matrix Risk scenarios Mitigations
Expected target audience (family with Review the edutainment offerings,

1 children) does not drive attendances as shifting to capture IVS in non-peak time
planned to secure the attendance target
2
3
Prioritize CSR department’s resource for
1
Impact
2 Fail to regain public trust, doubts still public awareness, especially in contacting
remain top press media for credible and frequent
public communication
Critical
Review periodically performance of

ris
Profits and losses depend on travel affiliated travel agencies to predict future
3
k line
agencies performance sales and conduct costs mitigation for

maintaining sustainable cash flows.
Possibility
X Risk profile

The new strategies will help HKD to reach nearly more than 10 million
visitors and register a CAGR of 5.07% over the next 15 years
Key assumptions
Revenue forecast for themed park segment (2005 - 2019F)
● 60% total revenue is from ticket price

● 75% of ticket value belongs to Hong Kong
Disneyland
Key metrics
Attendance
Target attendance will
CAGR exceed by ~500k in
5.07% 2019

THANK YOU!
APPENDIX
QUESTION TREE
How to reach the aim of being a leading

tourism attraction in Hong Kong? How can HKD revitalize its
management structure and culture to
improve its operating transparency?
Brand positioning
(RECOVERY) Employees: how can improve working
How can HKD deliver its improvement in conditions, benefits, and improve
retention? Products “themed lands”
brand image?
Guests: experience Touchpoints with cast members

Questions:
What is the
Sustainability agenda Route journey
recovery plan Internal management (US-centric, inflexible
to realign HKD management)
strategy to (1) Management style (for Long queue (capacity)
improve its internal management Cultural adaptation
image, (2) improvement) Root cause: When decisions go wrong, management board look for local scape goats without taking into account
boost (RECOVERY) local context, government step in to suggest mitigation plan (lấy trong đề); poor crisis management (oversight of
attendance, Sustainability local context)
and (3) deliver
its revenue Hypothesis: oversight on local responsiveness
target? (phrase
lại sau cho nó Where is the pool of guest to recruit? What are their profile?
SMART hơn) Existing guests
#Target attendance
Do we need any change in distribution model (i.e., via travel
~#ticket
Attract new guests agencies) to drive guests volume?
(IVS)
Revenue
(OPPORTUNITY)
“Themed lands”
How can HKD improve its existing offerings to better adapt and
offer more superior value propositions to Chinese “guests”
preferences (translate its strategic assets more properly)? Services (resorts, F&B, etc.)
Value/ attendance Offerings
Are there any opportunities for new offerings?

ISSUE TREE (WHAT HAPPENS NOW?)
Offerings (small in size, deemed as “primitive”, facilities)

criticized by customers
Poor consideration of
Customers planning
Ticketing Fiasco incident
Poor crisis management

External responses
Public scrutiny and skepticism regarding transparency of
the JV partnership
Environmental (shark’s fin, un-environmentally friendly

Public
fireworks…)
[Boycott] Existing and prospective customers opt not to

attend HKD
Questions
Top management makeover
Employees: Mass staff exodus; disgruntled employees regarding working

Internal management turmoil conditions and benefits
(management structure not working in
Hong Kong) Inflexible management culture (very conservative American-centric)
Ticket Peak/special days: Ticketing fiasco (poor planning and

revenue coordination)
(flexible
ticket Non-special days
Business model scheme)
Hotels & Resorts
Other
revenue F&B
streams
Souvenirs
OPTION TREE (WHAT HAPPENS TOMORROW?)
Environmental (2)
Social (1)
Doing more
good initiative
Governance
Core product’s
functionality
How to gain
considerable trust
Showing more
from our key What news
good initiative
stakeholders? Direct
and informative
Simply put, how to
news
revitalize HKD’s How to show
brand image? Indirect
Hire manager or the higher

title from Hong Kong
US-centric decision
maker Hire csr’s department
Disney’s US centric
management style Build a framework for initiative
Deficient local expertise
evaluation
Enhance (sustainability vs cultural
capability to do adaptability)
so
More transparent and faster
report line
Inflexible process
The Park’s capability Flexible reaction of employees
when comes to crisis
OPTION TREE (WHAT HAPPENS IN THE FUTURE?)
By geography (HK, Mainland China,

Quantitative: Size (#), others…)
spending
Which target audience By travel preference (IVS, non-IVS)
to tap (bring sustainable
revenue streams)? Qualitative: Profile +
Preferences By demographic
Expand area
How to grow capacity to
adapt increased #ctms?
Grow capacity and Expand operating hours
utilization?
How to grow more Promotions, new sales channels,
How to boost revenue in demand (increase loyalty scheme
long-term? capacity utilization)?
(~ #tickets sold)
Edutainment (new product?)

How to maintain the Expand touchpoints to
demand to keep attract?
sustainable influx of Incorporate seasonal festivals
visitors (both current
and new customers)?
Leverage existing
touchpoints
COLLABORATIVE REVENUE SHARING MODEL
Keep 25% of the total revenue
Keep 75% of the revenue Recognize Ticket Revenue
HKD TRAVEL AGENCIES CUSTOMERS
Recognized return (mechanism

Payout 75% of the ticket
for losses is the same)
price to customers
Payout 25% of the ticket

price to customers
COLLABORATIVE REVENUE SHARING MODEL
- FINANCIALS IMPLICATION
High Ticket Revenue
Cost 25% Travel agencies
This loss is implicitly splitted

among travel agencies and HKD
according to the ratio Low Ticket Revenue
Travel agencies 25%
75% Hong Kong

Disneyland
Hong Kong
75%
Disneyland
Financial projection (1/2)
Unit: $HKD million

Financial projection (2/2)
Unit: $HKD

Welcome Aboard On The Ride To Rejuvenate The Magic of Hong Kong Disneyland!

Uploaded by

Copyright:

Available Formats

You might also like

Welcome Aboard On The Ride To Rejuvenate The Magic of Hong Kong Disneyland!

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Welcome Aboard On The Ride To Rejuvenate The Magic of Hong Kong Disneyland!

Uploaded by

Copyright:

Available Formats

WELCOME ABOARD ON THE RIDE TO

REJUVENATE THE MAGIC OF HONG

WHAT HAPPENS NOW?

WHAT HAPPENS TOMORROW?

WHAT HAPPENS IN THE FUTURE?

IMPLEMENTATION AND IMPACT

WHAT WHAT WHAT

EXECUTIVE NOW TOMORROW IN THE FUTURE IMPLEMENTATION RISK & IMPACT

WHAT WHAT WHAT

target will be rough but necessary for future expansion

WHAT WHAT WHAT

“Disneyland is dedicated to the ideals, the dreams,

“Themed Park” - childhood fairytales, “recognized leader in experiential training,

“The Disney Way” is placed at the soul of the park,

Key success factors

Source: Case analysis

EXECUTIVE NOW TOMORROW IN THE FUTURE IMPLEMENTATION RISK & IMPACT

“Disneyland is dedicated to the ideals, the dreams,

“The Disney Way” is placed at the soul of the park,

Key success factors

EXECUTIVE NOW TOMORROW IN THE FUTURE IMPLEMENTATION RISK & IMPACT

…but Euro Disneyland was

It didn’t end there… Hong

12/9/2005 Guests complain of 23/9/2005 1/2/2006 2/2/2006 26/8/2006

Environmental Social Governance

Source: Case analysis

EXECUTIVE NOW TOMORROW IN THE FUTURE IMPLEMENTATION RISK & IMPACT

44% of respondents don’t believe this investment is a “fair value”

“I won’t come again, even if I am paid to” - said one respondent

Source: Case analysis

EXECUTIVE NOW TOMORROW IN THE FUTURE IMPLEMENTATION RISK & IMPACT

Inﬂexible management Vision oversight on local

● US-centric management style: triggering toxic

EXECUTIVE NOW TOMORROW IN THE FUTURE IMPLEMENTATION RISK & IMPACT

WHAT WHAT WHAT

Developing policies of company's ethical, sustainable

Ensuring a company has a positive impact on local

Raising public awareness of a company's social

Help top manager access deeper insight to precisely make

EXECUTIVE NOW TOMORROW IN THE FUTURE IMPLEMENTATION RISK & IMPACT

Partner with Hong Kong-based ESG

EXECUTIVE NOW TOMORROW IN THE FUTURE IMPLEMENTATION RISK & IMPACT

● Bonuses for overtime

EXECUTIVE NOW TOMORROW IN THE FUTURE IMPLEMENTATION RISK & IMPACT

The CMED serves to inform its strategic Cases in point

● During the day, the Executive Leadership

● If news or price-sensitive information will

EXECUTIVE NOW TOMORROW IN THE FUTURE IMPLEMENTATION RISK & IMPACT

The CMED serves to inform its strategic Cases in point

As the stakeholder landscape broadens, investing real time and energy

image in the long run.

EXECUTIVE NOW TOMORROW IN THE FUTURE IMPLEMENTATION RISK & IMPACT

WHAT WHAT WHAT

Magical experience Magical collaboration

Collaborative Revenue Collaborative Support

EXECUTIVE NOW TOMORROW IN THE FUTURE IMPLEMENTATION RISK & IMPACT

Seeking to cultural experience