Roaring Against the Mouse
|Oct 1, 2007|
Virtually every day for 17 years, a brash entrepreneur named Allen Zeman drove past the entrance to Ocean Park, the ageing, somewhat tatty mountainside amusement park on the south coast of Hong Kong Island, and never once went inside.
Then the territory’s former chief executive, Tung Chee-hwa, begged him to take it over. Now he’s there every day.
Zeman is famous in Hong Kong for having turned a run-down corner of the city’s central district into Lan Kwai Fong, where, when the eagle flies on Friday, the city’s upscale young go out to play. He also had sold his garment business, Colby International Ltd, to Li & Fung, one of Asia’s biggest exporters.
But in 2003 the world looked bleak, not just for Ocean Park, but for Hong Kong itself. SARS, the mysterious Severe Acute Respiratory Syndrome, had hit the territory with devastating force, killing nearly 300 people at a time when Asia had yet to recover from the 1997 financial crisis. Tourism, on which Hong Kong depended for much of its daily bread, had fallen by 57.9 percent in a single year. And Disneyland was about to open for business on Hong Kong’s Lantau Island.
“It was the 800-pound gorilla,” Zeman said in an interview. Traditionally, when Disney arrives in a new market, the existing theme parks lose anywhere from 25 to 40 percent of their business. “Everybody was worried about the best branded theme park in the world. People were excited about it coming to Hong Kong. Ocean Park was a local park, people had grown up with it, but it had kind of lost its direction.”
Government-owned Ocean Park was losing money and looked to be headed toward extinction. Its then chief executive officer recommended simply closing it and selling off the land for lucrative housing blocks.
The picture is vastly changed today. Ocean Park has received record numbers of visitors for the past three years. In the current fiscal year, Zeman says, Ocean Park will have taken in 4.95 million visitors, up from below 4 million the first year he took it over. In the meantime, Disneyland has stagnated. Although the Walt Disney Co. reported that third-quarter earnings increased 14.5 percent year-on-year, it’s questionable how much of that came from the Hong Kong park, which has been suffering despite the fact that Disney famously put up only US$314 million to build the park, while the Hong Kong government put up almost US$3 billion in taxpayer funds.
Zeman is a consummate showman who seems willing to endure almost any indignity to promote the park, as he did with Lan Kwai Fong. Most recently he began appearing in costume in the publicity run-up for Halloween. He has been called the “Mouse Killer” by Forbes. There seems to be a good deal of gloating, both in the international press and locally, about the local boy seeing off the international competitor.
But it isn’t that simple. Neither Zeman’s undeniable genius in rescuing Ocean Park, nor Disney’s ineptitude in Hong Kong are responsible for the contrast between the two amusements. The two parks are just very different animals, Zeman says. Disney is a pure theme park, with the famous Disney characters and the famed Disney attractions. Ocean Park, he says, is more of an educational experience. And nobody, he says, should count out Disney, one of the most formidable entertainments on the planet. Ocean Park, he says, won’t kill Disney, but neither will Disney kill Ocean Park.
The tourism figures themselves tell the story. In 2003, the year SARS hit, 15.5 million tourists visited Hong Kong, down a full million from 2002. From that point, aided by a decision by Beijing to allow Chinese tourists to come to the territory, the numbers bounced upward dramatically, to 21.8 million in 2004, 23.3 million in 2005 and 25.3 million in 2006. Ocean Park was going to be a natural beneficiary.
That didn’t mean it wouldn’t take work. When he and his management team originally set out to see if Ocean Park could succeed in an entertainment world shared with Disney, Zeman says he had to sharpen the differences. “We sat down and asked. ‘What is Disney?’ It’s about castles, fantasy, a mouse,” he said. “But Ocean Park is different, it’s real, it’s about education, it is about the environment, it is about the ocean, it has real animals, it has nature, conservation, these are all buzz words that Ocean Park is built on.”
Zeman, a multimillionaire who took the park job for free, says the former CEO wanted to move it to flat land. But, he says, the park’s natural attributes are formidable.
“What I saw was that billion-dollar view of the headland, the hillside, the water, overlooking Deep Water Bay and Aberdeen, and I said to myself, ‘My god, stay with this park, if they close this park they are out of their minds.’ Eight minutes or ten minutes from central, this is the best-kept secret in Hong Kong for those who hadn’t visited.”
If they had moved it to flat land, he says, “I would have had to create fake mountains, fake water, everything that Mother Nature gives me for free, the vegetation, the greenery, all that stuff.”
He and his team, headed by the present CEO, Thomas Mehrmann, began by creating a monthly series of events to draw visitors. There were Christmas events, Chinese New Year events, special promotions designed to attract families.
More important, the park had to be revamped. His ambition was to make it the best sea mammal park in the world, “so that when we were done, people around the world who think of a Sea World-style theme park what would come to their mind was ‘Oh, have you seen Ocean Park in Hong Kong?’”
With the backing of the government, Zeman cobbled together a HK$5.55 billion loan package with a 15-year payback to rebuild the park. He got the loan. Disneylands everywhere are among the cleanest and most orderly entertainment experiences available. Ocean Park was going to have to do the same – and it has. A trip to the park today is light years away from the down-at-heel experience of the late 1990s. It is clean, spacious and expanded, with 70 different attractions compared to the 35 when Zeman took over.
Three new hotels are to be built near the park – a three-star for budget travelers with 650 rooms at the entrance to the hotel, a four-star with 540 rooms nearby and a five-star spa-hotel for the well-heeled. “People can come, have treatments, put the kids in the park and relax,” says Zeman.
So where does that leave Disney?
In its first year of Hong Kong operation Disney made virtually every mistake possible. There were labor problems, with more than 60 percent of the performers, a great many of them Filipinos, saying management was unfair. There was bad publicity when environmentalists jumped all over them for serving shark’s fin soup in their Chinese restaurant, and many others. It closed the gates when the park filled up with tourists from the mainland and at one point refused to allow outside food inspectors to check for cleanliness. Critics said the secretive Disney management simply took the attitude that Disney knew best.
“Disney is a company that is very America-centric,” Zeman says. “It is not up to me to say what they did right or wrong, but they came here not understanding that if you’re in somebody else’s house you need to fit in, abide by the rules of being a guest. They came in to try to dictate their terms and there was a backlash, people kind of got turned off by it.”
But the main problem is that the park is too small. At 125 hectares, it is by far the company’s smallest theme park with the actual attractions occupying only about 40 hectares. Two new attractions were opened this year, and a third, “It’s A Small World,” is scheduled to open early next year. Ultimately, over 15 years, Disney expects to handle 10 million visitors a year.
But in the meantime, it has suffered. Disney projected 5.6 million visitors for its first year, but announced only 5.2 million, and many observers believe they got that figure by counting every freebie let in. The park, notoriously stingy with information despite the taxpayer dollars invested, hasn’t released later figures, but the annual number could have fallen to as low as 4.8 million.
Certainly, a visit to the park can be a less than rewarding experience. It’s very hot during the summer, for one thing – hot enough to make you feel sorry for the panting players in the Mickey and Minnie suits. The limited number of rides means visitors can do the park in an afternoon, largely making it a one-off.
But not for nothing is Disney the world’s top-rated entertainment company. Euro Disney near Paris, after 15 years of operation and many stumbles, has become one of Europe’s top tourist attractions. Third-quarter 2007 results showed revenues up 12 percent to 322 million euros and year-to-date revenues up 11 percent to 834 million euros. Some 170 million guests have now visited the park. Disney isn’t going to give up on Hong Kong.
And Zeman, who seems to be having great fun, is all for peaceful coexistence. “Disney is an import, an American icon, and Ocean Park is local. So once I saw that there were two different theme parks, we thought well, there is no reason they can’t coexist. It just makes sense,” Zeman says. “We are not stepping on each others toes.”