Name: Au Sau Man Amber 13108309DChan Ching Wa Kennis 13113777DFung Yuen Shan Jennifer 12040884DLau Ka Ching Pinky 13108261DLeung Suet Yee Cher 13108507DPang Choi Yi Josie 13108291D

HTM2120 Tourism AttractionsAttractions- Theme Park

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Seminar group: 006Project group number: 3Presentation date: 8th April, 2014

Introduction

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• Identify the supply and demand factor of theme park industry•Evaluate the internal and external through C-PEST framework•Analyze the market structure in theme park industry•Forecast the demand in this industry

Objectives

Factors Affecting the Demand for Theme Parks•Purchasing power•Value added•Advertising•Population

Purchasing power•Profits for Hong Kong Disneyland and

Ocean Park: mainly supported by tourists from mainland China

•Purchasing power of them is highly influential

•Exchange rate of RMB will continue to appreciate (Zhou, 2013)

•Higher purchasing power•Demand

Value added

•Expand in the coming years•Ocean Park: a new animal attractions called

“Adventures in Australia” in Dec,2014•Hong Kong Disneyland: a new Marvel-

themed area in late 2016•Value for visiting will increase•Demand

Advertising•When Ocean Park opened Amazing Asian

Animals, it released lots of promotions•E.g. television commercial, MTR ads•Expected: both theme parks will increase

their advertisements’ quantities once they release new attractions

•Demand

Population – Visitors from Chinese Mainland•Both: targeting visitors from Mainland China as one of

the major market segments• Increasing trend in the number of visitors coming from

Mainland China•+ 24.2% (2011 - 2012)•+16.7% (2012 – 2013)•The target market will expand•Demand

Generally

•All the above factors are contributing to an increase of the demand for theme parks

• Demand for the theme parks in Hong Kong

• Equilibrium price and equilibrium quantity

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Factors Affecting the Supply for Theme Parks

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•30 new attractions in OP•Ocean Hotel, Water World project•capacity supply

•Expected higher demand with the new facilitates •demand > supply• P, Qd

Expansion of park

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•New Disney hotel in 2017 (750 rooms)•capacity supply•new room rate = HKD$2,100, a price

between the existing two hotels (Lo, 2014)

• Qd, but P?? (2 cases)▫ supply > demand P▫demand > supply P

Expansion of park (Con’t)

S > D

D > S

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•DLHK got HK$809m loan from government•Purpose: construction of the third hotel •financial ability for expansion supply of service

Favorable government policy

Money?

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Internal Environment

Strength--All round entertainment•DLHK and OP provide various entertaining elements to enhance visitors’

experience

Thrilling Experience Fun Experience

Cultural Experience Animal Encounter Experience

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Strength--High Accessibility•Hong Kong Disneyland

connected with MTR (Sunny Bay station) •Ocean Park

connected by Citybus at Admiralty MTR Station***Construction South Island Line (East) – Ocean Park Station will be completed in 2015

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Strength-- Popularity & Strong Brand Awareness

TEA Global Attractions Attendance Report in 2012

• DLHK and OP are internationally well-known theme park

• Strategic global marketing strategiesi.e. Disney promote their brand via Disney film and Disney channel

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Weakness--Overcrowding• Limited flat land in HKDLHK is the smallest among Disneyland in the world• Majority visitor would skip the ride if the waiting time is over 30 minutes (SCMP,

2014)

Reduce the attractiveness of theme park

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External Environment- C-PEST

Competitive Environment

Porter's Five Forces of Competitive Position Analysis by Michael Porter (1980) is used

Evaluate the competitive intensity and attractiveness of Hong Kong theme park industry

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Competitive EnvironmentThreat of new entrant: Low Significant investment is needed Limited space of Hong Kong

Ocean Park:870,000 square meters of land Disneyland:27.4 hectares of land

The estimated total project cost of developing HKDL Phase I was HK$14.1 billion (Legislative Council Secretariat, 2008)

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Competitive Environment

Threat of substitutes: Low (HK) Substitute are service or product provide similar features : Fun &

Educational The substitutes would be museums and zoo Do not offer theme park experience → Low threat

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Competitive Environment

Threat of substitutes: Intense (Worldwide) More theme parks will open

e.g. 12 new theme parks and one water park opened in 2012-2013 (China Theme Park Pipeline Report 2013)

Target similar market & share similar features e.g. Shanghai Disneyland & Zhuhai

Ocean Kingdom→ Increase the threat

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Competitive Environment

The power of Supplier : Medium Vendors (F&B, toy, cloth): Low

Many suppliers are available in the market

Construction Company & technology supplier: Medium Intensive investment Require support and maintenance

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Competitive Environment

The power of Buyer : Low No substitutes offer theme park experience in HK market Theme parks have the control of price

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Competitive Environment

Competitive Rivalry: Not intense Difficult to enter into the market No substitutes offer theme park experience in HK However, the competitive rivalry is intense among the global scope

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Social-Cultural Factor

Aging population Impact on :

Demographic profile and target market Labor force

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Social-cultural Factor Hong Kong

The number of elder aged 65 and above would increase from the current 1 million to 2.6 million in 2041 (Census and Statistics Department, 2011)

The median age would also increased from 43 to 52 (Census and Statistics Department, 2011)

Mainland China More than a quarter of the population aged 65 years old by 2050 (Chinese

Academy of Social Sciences 2010)

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•Oligopoly• (A small numbers of sellers/ Oligopolists)•Hong Kong Ocean Park, Noah’s Ark, Hong Kong Disneyland• interdependent for others and both have influence for the decisions of

others•high barriers to entry building cost ,licenses

Market Structure

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•General increasing demand in the future ( both parks expected) 1. Increasing purchasing power of mainland tourists• Rise of RMB •Same RMB, more HKD

Demand Forecast

2. Increasing numbers of mainland tourists•General increase of number of mainland tourists• favorable policies such as CEPA and less barriers for tourists from inner

region of China will enable more tourists visit Hong Kong

Demand Forecast 32

Source: HONG KONG DISNEYLAND ANNUAL BUSINESS REVIEW FOR THE FISCAL YEAR 2011-2013

Source: HONG KONG DISNEYLAND ANNUAL BUSINESS REVIEW FOR THE FISCAL YEAR 2011-2013

•3. New Attractions for both parks•HKDL: New nighttime spectacular : Disney Paint the Night" in

2014Marvel's Iron Man franchise in late 2016.•OP: shark Mystique will open in the end of 2014

Demand Forecast

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•Optimistic•Many favorable factors•Mainland tourist becomes more significant•Attention for the trend of increasing number of theme park and aging

population

Conclusion

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Thank you.

End