Thursday, December 15, 2016

Is Shanghaî Disneyland Really Doing That Well ?

Asia has posted an interesting article about Shanghaî Disneyland titled "Shanghai Disney buzz turns sour over food costs, service..."  Well, according to Disney the park is doing very well and even beyond their expectations with 4 Million visitors in the first 5 months and SDL even hope to break the record of 10 millions visitors in the first year. But we also know that theme park revenues are not coming only from ticket sales but also - if not mostly - with food, merchandise, etc... sold in the parks or hotels. And, apparently, may be that's where SDL problem is.

Excerpts from the Asia Nikkei article who says that "theme park's dissatisfied visitors present a challenge for SDL after just six months":

Half a year after its much-hyped debut, Shanghai Disneyland is struggling to keep the turnstiles spinning as visitors' complaints about high prices and disappointing services have spread through social networking sites.

A clear day in early December reveals a lethargy that contrasts with the fever seen during the park's June 16 opening. Entry lines at the core property of Shanghai Disney Resort are almost nonexistent at 9 a.m. as gates open. In the afternoon, electronic signboards show only a short wait -- five to 50 minutes -- for all but the most popular attractions. Workers kill time chatting at deserted gift shops across the park.

Many of those who made the trip carried in packed lunches and drinks from nearby convenience stores, including thriving locations inside the subway station used by Disneyland visitors. Come lunchtime, patrons spread out on benches to eat. I heard everything in the park was expensive, so I bought lunch ahead of time," a college student from Jiangxi Province said, adding that she did not plan to pick up souvenirs or gifts.

Shanghai Disneyland drew 4 million visitors in its first four months, and the park is on track to reach its initial-year target of 10 million visitors. But business is less brisk than expected, said an official for the city of Shanghai, which holds a majority stake in the park's operator.

A team from The Nikkei asked 20 visitors in late November and early December about Shanghai Disneyland's highs and lows. Of that group, 45% praised the attractions, while 40% said they appreciated the park's atmosphere. One in five spoke of convenient transportation to the park. The state-of-the-art computer graphics in various attractions, as well as the venue's appeal to both adults and children, drew particular praise.

When the lights turn on at night, it's almost like a fairy tale," said a 22-year-old woman visiting from Beijing. She called the Shanghai park "a clear winner" over its siblings in Hong Kong and Paris. A 36-year-old Shanghai man with his family in tow said the venue is "very convenient" to reach, with a parking lot nearby.

But high prices are the most common complaint among the visitors. Admission runs 370 yuan ($53.50) on weekdays and 499 yuan on weekends and holidays -- a sizable figure given the average monthly wage is just under 6,000 yuan even in Shanghai, where people tend to earn more than in other areas. Tokyo Disneyland, by comparison, charges 7,400 yen ($64.30) for a day's admission.

A 26-year-old Dalian woman visiting with friends said she spent over 2,000 yuan, or half a month's wages, on the two-day trip, including lodging and airfare. The group initially intended to stay at a "Toy Story"-themed hotel run by Disney, she said, but the 1,000-yuan nightly rate led them to opt for a youth hostel nearby instead. Poor transportation in the area still left the travelers shelling out for pricey private cars to and from the park.

Food or merchandise in the park costs 100 yuan or so -- it's pretty expensive," the visitor said. The woman even passed up bottled water and made do with a small 30-yuan hot dog although she was hungry. To "enjoy the atmosphere," she visited a gift shop, but all she did was don a hat topped with "Mickey Mouse" ears and take photos.

Shaun Rein, founder and managing director of China Market Research Group, said visitors complain most about the cost of food and souvenirs rather than ticket prices. Chinese consumers tend to hesitate on these types of costs, he said, adding, "I would actually raise ticket prices and lower prices for food.

Poor service and operations were also an issue for 40% of respondents. A 30-year-old woman from Suzhou visiting with five other family members complained of staff doing nothing about line-jumpers, as well as the "coarse" manner of speech by workers. Given how close they are to Shanghai, the family members would like to keep coming, she said, but they will not return unless park operations change.

There are plenty of staff around, but they can't even give clear directions," a college student from Hangzhou said, having asked two separate workers for navigational help to no avail.

Did Shanghaî Disneyland did the usual mistake to be too greedy from the start with high prices on food and merchandise - or at least prices not adapted fro the Chinese market? Well, it looks like, and if it's the case Disney is gonna learn the hard way that this don't work with the Chinese...

More from Asia Nikkei:

Two in five of those surveyed by The Nikkei said they expected the park to be more crowded than it was. Disney faced substantial opening-day issues in Shanghai, Rein said, as the park was "too packed, and so they had people waiting in line for three hours for one ride." Pictures of these long lines and complaints from those waiting flew across Chinese social media, giving the park a reputation that will take a good deal of time to counter.

A high number of repeat visitors is key to a theme park's success. Shanghai Disneyland has begun offering 100-yuan gift certificates, usable at facilities such as restaurants inside the park, to get potential customers in the door. It has also started selling season passes through March 2017. These passes are invalid during the Lunar New Year holiday, though the ones applicable on weekdays only are relatively cheap, paying off after just three trips to the park.

Expansions in progress could burnish the venue's appeal. But large-scale renovations are also in store for Disney parks in Tokyo and Hong Kong, creating competition for visitors. If Shanghai Disneyland cannot solve its customer service problem, cultivating repeat customers will remain challenging, limiting growth in admissions.

When A theme park start to offer coupons of "gift certificates", or any kind of promotion, it's never a good sign. Or it is a sign they've already identified the problem and their original mistake. Not sure, though, that it will be enough to make Chinese guests spending more Yuans in the park...

Text: copyright


Anonymous said...

If Disney wasn't aware of the pricing problem with the Chinese, they should have been. If this is their main problem, hopefully it will be easy to solve, just lower the prices on food and merchandise, and raise the admission price as someone said. Hopefully Disney can fine the right balance on pricing structure.

FutureWorld84 said...

I was lucky enough to visit this park a few days before opening. As a huge Disney Parks fan (having been to all of the parks), I have to say I was disappointed in this park. The cast members didn't speak English, the rides kept breaking, the lines were long, the signs on property didn't give my driver a clear understanding of where to drop me off. The food and merch was expensive as was the ticket (not when compared to US prices but to comparables in China - Happy Valley's (think Six Flags) annual pass is 780 Yuan). But honestly the CM's were the worst in the word, their limited English (even Managers didn't speak English), their unwillingness to do anything about line cutting, etc made it a bad day at the park. I believe everything in this article and would have rather seen Disney pump all that money into making Hong Kong a full day park.