1. Name:
Au Sau Man Amber 13108309D
Chan Ching Wa Kennis 13113777D
Fung Yuen Shan Jennifer 12040884D
Lau Ka Ching Pinky 13108261D
Leung Suet Yee Cher 13108507D
Pang Choi Yi Josie 13108291D
HTM2120 Tourism Attractions
Attractions- Theme Park
1
Seminar group: 006
Project group number: 3
Presentation date: 8th
April, 2014

2. Introduction
2

3. 3
• 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

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

5. 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

6. 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

7. 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

8. 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

9. 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

10. 10
Factors Affecting the Supply for Theme Parks

11. 11
• 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

12. 12
• 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

13. 13
• DLHK got HK$809m loan from government
• Purpose: construction of the third hotel
• financial ability for expansion  supply of service
Favorable government policy
Money?

14. 14
Internal Environment

15. Strength--All round entertainment
• DLHK and OP provide various entertaining elements to enhance visitors’
experience
Thrilling Experience Fun Experience
Cultural Experience Animal Encounter Experience
15

16. 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
16

17. Strength-- Popularity & Strong Brand Awareness
TEA Global Attractions Attendance Report in 2012
• DLHK and OP are internationally well-
known theme park
• Strategic global marketing strategies
i.e. Disney promote their brand via
Disney film and Disney channel
17

18. Weakness--Overcrowding
• Limited flat land in HK
DLHK 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
18

19. 19
External Environment- C-PEST

20. 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
20

21. Competitive Environment
Threat 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)
21

22. 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
22

23. 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
23

24. 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
24

25. Competitive Environment
The power of Buyer : Low

No substitutes offer theme park experience in HK market

Theme parks have the control of price
25

26. 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
26

27. 27

28. Social-Cultural Factor
Aging population

Impact on :

Demographic profile and target market

Labor force
28

29. 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)
29

30. 30
• 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

31. 31
• 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

32. 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

33. • 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
33

34. • Optimistic
• Many favorable factors
• Mainland tourist becomes more significant
• Attention for the trend of increasing number of theme park and aging
population
Conclusion
34

35. 35
Thank you.
End