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  1. #1

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    Was Disney really cheap?

    A lot of criticism of Hong Kong Disneyland argues that the park was severely under-funded and Disney was trying to get away with the least they could possibly build.

    However, I was examining the financial figures for the park and the other Disney resorts and the results kind of surprised me. HKDL allegedly costs $1.8 billion (Source), which if you adjust that for inflation is almost exactly the same amount that was paid for the Magic Kingdom when it first opened, and double what was paid for Animal Kingdom or Hollywood Studios and three times as much as California Adventure or Walt Disney Studios Park.

    These figures show the initial cost paid for the park, and then that cost adjusted for inflation to the year 2000. They're listed in order of increasing adjusted cost.

    Walt Disney Studios Park _____ 500,000,000 _____ 611,000,000
    Disney California Adventure ___ 700,000,000 _____ 677,000,000
    Disney's Hollywood Studios ___ 500,000,000 _____ 698,000,000
    Disney's Animal Kingdom ______ 800,000,000 ____ 834,500,000
    Hong Kong Disneyland ______ 1,810,000,000 ___ 1,601,000,000
    Magic Kingdom _____________ 400,000,000 ___ 1,691,500,000
    Tokyo Disneyland __________ 1,400,000,000 ___ 2,414,000,000
    Disneyland Paris ___________ 2,000,000,000 ___ 2,441,000,000
    Epcot ___________________ 1,400,000,000 ___ 2,506,500,000
    Tokyo DisneySea __________ 3,000,000,000 ___ 3,723,000,000
    I have more adjusted costs you can see here.


    Hong Kong is still the cheapest of all the Magic Kingdom-style parks, but the amount paid isn't drastically less than other parks as I first expected. From a financial stand-point, it makes sense that the company couldn't justify more money: they were already spending a lot more than their recent parks had cost (TDS being the exception of course).

    Still, the park certainly needed more stuff than what it had when it opened. The question is where all that money went to. I wouldn't have expected labour and material cost to be hugely inflated which makes things difficult for DLP. What was the money spent on?

    ... Or the source is wrong, lol.
    Last edited by MouseketeerCole; 11-15-2010 at 12:20 PM.

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  2. #2

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    Re: Was Disney really cheap?

    Wow! Thanks for doing all of that math and sharing with us!

    Very interesting question. I wish I knew.

    I haven't been to Hong Kong Disneyland, but I have to wonder how nice the hotels are...because they would be part of the budget. And if I remember correctly, when the more recently-built parks were made, the parks would get kinda skimped on and the hotels were given a more lavish treatment.

    Hong Kong Disneyland is also kinda on an island...I don't know if that would potentially make things more expensive to build?

  3. #3

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    Re: Was Disney really cheap?

    Knowing this, I'm even considerably more disappointed with HKDL. It currently has two hotels, as we know. They were banking on appealing to the big-spenders and the a little more budget-conscious with each hotel, but with not much to do in the park, it hardly justifies the cost of building these hotels at the expense of the park.

    People complain that it appeals primarily to kids and that there's only one thrill ride. I, on the other hand, understand that, but there aren't enough distinctly Disney kids rides as well. There was initially only one dark ride in Fantasyland, Small World only came a few years later.

    So assuming everything's adjusted for inflation, and given the same amount of money, I still feel that Disney ad the HK gov't were both "cheap" in the sense that they did not spend the money well.

    Looking at the money they're pouring into the expansion, it might seem that these might "save" HKDL. I guess they're looking to replicate the same magic that Space Mountain brought to Paris, this time with three mini-lands.

    I for one dislike the idea of spending all that money on three tiny lands. I'd have rather that they built one land Frontierland or New Orleans Square, and put two E-tickets, but it does look good on paper.

    May people hate on Toy Story Land. I don't, as much. I understand why it's important, and as nice as it would be to wait for a second gate to feature it there instead, there simply isn't enough time. It's pretty obvious that people are banking on this recognizable slice of the Disney catalog to bring in the people. It might very well be the one to bring in everyone from that side of China.

    Grizzly Gulch and Mystic Point seems to be more aligned to partially meet the demands of the Disney enthusiasts, hence they don't need to promote it as much because we sure know they're coming, and we'll probably go over there anyway to try them out.

    This shows a a conflict of sorts of what a Disney park should be and what it could be. And so far it has hit neither. Disney probably expected that HKDL would practically sell itself, but most people require value for their money in both quality (which it generally has) and quantity (the thing that they're working on). They need to aggressively promote it get most people there.

    This was something I only really realized recently, when I took notice that we even have full page ads here in Manila for HKDL.

    So yeah, not cheap in the overall budget, but some bad decisions made it what it is.

  4. #4

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    Re: Was Disney really cheap?

    Pineapplewhipaddict: Thank YOU for the thanks, lol! The figures do include the hotels, so I wonder how they split it between hotels and park. I have the Disneyland Paris figures somewhere so it should be easy enough to make a good calculated estimate as to the split but I'll have to find them.

    SirEdge: I think I agree with quite a lot of what you said, and your mention of the new expansion got me wondering about those figures as well. With most of HKDL's visitors being drawn to quantity, perhaps the decision to build the funfair Toy Story Land attractions is a magnet to get people in, whilst Grizzly and Mystic are the Disney quality story attractions that will keep them there and impress them. I still don't agree with the theme of TSL, but I can understand the desire to build off-the-shelf rides to increase the numbers and look good in marketing.

    I looked at the figures for the expansion, for which Disney is putting in $450 million. Toy Story Land is a clone of Paris's, which cost $100 million, leaving $350 million for Mystic Point and Grizzly Gulch - I guess $175 million each.

    To compare that just for interest, the Wizarding World of Harry Potter cost $265 million, Journey to the Center of the Earth at TDS (including the mountain showbuilding) cost $250 million (adjusted to current prices), TDS Tower of Terror cost $175.5 million, a Pirates of the Caribbean would cost $120 million and an Indy Adventure would cost $180 million.

    Disney is certainly putting good money in, but I wonder whether building additional lands was a wise choice. If they need extra attractions, why are they spending money placemaking when that money could go on rides being put into the three existing lands? Isn't that needlessly taking money away from the major problem ... the lack of good attactions?

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  5. #5

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    Re: Was Disney really cheap?

    Disney is very conservative with their money which is why i buy the stock and in a down economy it goes up. They drive a hard bargain for everything they need, but always want and expect the best from vendors at the best value. One of the four keys they make a CM learn when you start to work there is "efficiency" which is another way of saying getting things done properly, with the lowest needed cost or investment. Yes, some could call them "cheap" but I respect a company that is thriving in the worst economy's this country/world has had in 50 years.
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  6. #6

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    Re: Was Disney really cheap?

    What I get from the financials is that the $1.8 billion (adjusted) for HKDL, includes the park, hotels, promenade, and, possibly, the power plant).

    "total project cost of developing Hong Kong Disneyland Phase I was HK$14.1 billion ($1.8 billion USD)" That doesn't included reclamation. See section 2.2 below:

    http://www.legco.gov.hk/yr08-09/engl...0809fs28-e.pdf

    So cost of the park itself was probably closer $0.9 to 1.1. billion. And they still didn't get a lot for that amount. Imagineering has become very expensive organization over the past decades (the Fantasyland Expansion will likely be significantly more expensive than Wizarding World of Harry Potter), which is why I can buy these stories about a new outsourcing model being employed for Shanghai.
    Last edited by RandySavage; 11-15-2010 at 09:35 PM.

  7. #7

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    Re: Was Disney really cheap?

    Also weird:

    Almost as much money was spend on both DLP and TDL.
    Even though DLP is MUCH more lavishly build.
    I'm assuming the DLP hotels, train station and entertainment district aren't included in the price.
    Still TDL seems too expensive.. Or DLP too cheap

    Hmm.. The link you're giving says DLP cost 3.1 billion.. not 2.4. More along Disneyseas costs. That seems more plausible.

    Also it says TOT at DCA cost 88 million, the same design at DLP cost 192 million.
    What the what? :o
    No wonder WDS sucks that much.

  8. #8

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    Re: Was Disney really cheap?

    Local labor & construction costs are a big factor, as well. Building similar attractions in Tokyo (an expensive city with special earthquake regulations) always seems to cost 50%-70% more than their Stateside equivalent.

    European labor union strike threats & demands were a major factor in the huge run-up in costs of EuroDisneyland, according to the book DisneyWar.

  9. #9

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    Re: Was Disney really cheap?

    The Hong Kong costs might also include the landfill costs or the metro line they put into the resort. I've not been to HKDL but from your figures is dosen't appear to have been very good value for money - perhaps WDC charged some very big consultancy fees

  10. #10

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    Re: Was Disney really cheap?

    Anyone that has been to HKDL knows the money was spent in a strange way. Space Mountain, Pooh and the tiny castle are just a few things that prove that HKDL has been a bad deal.
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  11. #11

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    Re: Was Disney really cheap?

    lol i think Disney is expensive!
    I am traveling now.

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