It was a difficult year for Ocean Park Hong Kong. In 2016, the marine theme park reported a near 20 per cent fall in visitors and a HK$241m ($31m, £25m, €29m) deficit – highly unusual – for the fiscal year.
This was caused by a combination of circumstances that created a perfect storm for the Hong Kong tourism industry. There were several contributing factors.
“Hong Kong is currently facing extremely tough business challenges, especially in the tourism sector,” says Ocean Park CEO Matthias Li Sing-chung. “The market is facing some headwinds due to the declining economy, downturning retail environment, depreciation of currencies of other Asian destinations, and change in tourism-related policy. All of this has played a part in eroding Hong Kong’s competitiveness against other regional cities and affected tourist arrivals to the city, as well as to tourist attractions like Ocean Park.”
It’s marked an eventful start for the new CEO, who only took the reins from outgoing boss Tom Mehrmann in July. Li’s no stranger, though, having been part of the Ocean Park family since he joined as finance director in 1994. If anyone can navigate the tempest, it should be Li.
“Over the past 22 years, I’ve developed a deep passion for Ocean Park, not only from working with the entire staff to transform a local recreational facility into an international tourist destination, but also from experiencing up-close the pride locals derive from their park,” Li says. “Now, as CEO, my immediate focus is to face the challenges presented by the changes in Hong Kong’s visitor profile and the intense competition in the region.”
In recent years, tourism to Hong Kong was rising, reaching an all-time high of 60.8 million in 2014. However, in the two years since, those numbers have taken a hit, falling 4.5 per cent from 2015 to 56.7 million last year. In turn, that’s affected Hong Kong’s attractions.
In its year ending 30 June 2015, Ocean Park welcomed 7.4 million guests, its third-highest attendance on record. That made it the 15th-most visited park in the world, according to the annual TEA/AECOM report. This was topped off by its second-highest ever total revenue (HK$1.9bn, $243m, £205m, €238m) and a surplus of HK$45.2m. However, for the financial year ending June 2016, the park received just 6 million guests, a decline of 18.9 per cent.
THE MAINLAND FACTOR
Hong Kong Disneyland was also affected, attributed to the fall in the number of tourists from Mainland China – a demographic that once made up almost eight out of 10 visitors to the autonomous territory. A series of anti-tourist protests by Hongkongers unhappy with the huge surge in Mainland visitors is at least partly to blame. Reports show the number of visitors from China fell 50 per cent in the first half of 2015 as a direct result of the protests. Hong Kong’s image as a hospitable place was tarnished, and many Chinese decided to go elsewhere, flying instead to Thailand, South Korea, Japan, Singapore, Malaysia and Vietnam.
With 120 million Chinese travelling abroad each year, it’s a huge piece of the pie to lose out on. Countries like Japan, Malaysia, Indonesia, Thailand and the US lifted visa restrictions on Chinese visitors, making trips easier to arrange than those to Hong Kong, where travel permits and visas are still required. Other factors, too, influenced Mainlanders’ decisions.
“Competition from other regional destinations, the strengthening HK dollar against the renminbi and other currencies, and slowing economic growth in China have affected Mainland visitor flows to the city,” Li says. “The Hong Kong Tourism Association predicts the city will continue to see a 10 per cent drop in the number of group visitors and 20 to 30 per cent drop in the number of FITs [free independent travellers] from Mainland China.”
In past years, 50 per cent of Ocean Park’s visitors were Chinese, with 35 per cent from Hong Kong. This demographic has altered, as now about 40 per cent are Chinese and 40 per cent are local. The next core markets are Taiwan, South Korea, India and the Philippines.
PEOPLE’S PARK
So, what is Li to do in the face of these facts and figures? Well, first and foremost, he’s not painting a gloomy picture – anything but. This year marks Ocean Park’s 40th anniversary, and there has been a celebratory mood, especially among the locals. In fact, the attraction’s reputation as the “people’s park” is one of the foundations of its success over the years.
It’s a “homegrown” operation that dates back to 1977, when it was funded by the Hong Kong Jockey Club and built on land donated by the government. In the early 80s, the Jockey Club funded further development and rides, until 1987 when Ocean Park Corporation was formed, a financially-independent, not-for-profit organisation with a government-appointed board. Ocean Park reached a defining moment in 2005 with the launch of a HK$5.5bn ($709m, £573m, €665m) Master Redevelopment Plan (MRP), taking the park from a mid-size attraction to a global destination. The master plan doubled the number of the site’s attractions and rides, included the opening of Old Hong Kong, which recreates the streetscape and ambience of the city 50 years ago.
Last year alone, 2.4 million Hongkongers visited Ocean Park, that’s one-third of the domestic population. More than 450,000 of them benefited from complimentary or cut-price admission, as the park offers free entry to under threes, over 65s, registered disabled and all residents on their birthday.
“Through the ups and downs of the past 40 years, we’ve always believed it’s crucial to uphold our local appeal and remain well connected to the community,” Li says.
STAYING CREATIVE
The 90-hectare (222-acre) Ocean Park is situated on the southern side of Hong Kong Island at a bay called Tai Shue Wan. Overlooking the South China Sea, the resort consists of two areas, the Waterfront and the Summit, connected by cable cars and the Ocean Express funicular. The park has over 80 attractions, with the Summit home to a wide variety of thrill and family rides. There are live shows at the Ocean Theatre dolphinarium, designed to “educate and entertain”, and the chance to visit the Ocean Park Tower, one of the tallest observation towers in Southeast Asia. At the Waterfront, themed areas include Amazing Asian Animals, where some of the continent’s rarest species are on display.
To keep people coming, especially for a destination that’s dependent on repeat visits from locals, Li knows it’s important to keep innovating. “As the years go by, it’s important to stay creative to win guests over,” he says.
On that note, there are major developments coming down the track. The most exciting must be the brand new year-round waterpark on the site of the old Water World facility, opening in 2018. There are two hotels on the way, the Ocean Park Marriot Hotel and the Fullerton Hotel @ Ocean Park. The children’s play zone Whiskers Harbour is also being modernised. And, in December, a transport link opened, the MTR South Island Line (East), which connects central Admiralty to Ocean Park Station in just four minutes.
NEW INVESTMENTS
“The all-weather Water World will stay open late to offer night attractions for the local community and international tourists,” Li says. “The MTR South Island Line significantly enhances our connectivity across the entire area of Hong Kong, making a visit to Ocean Park even more convenient. It will likely facilitate increased guest visitation from both locals and FITs. The opening of the hotels will enable us to extend the visit duration of our guests, elevating the appeal of Ocean Park. They will also provide a new venue for Meetings, Incentives, Conventions and Exhibitions (MICE) event organisers from around the world, which will be easily accessible thanks to the new MTR link.”
There’s work going on behind the scenes, too, as the park strives to constantly improve the visitor’s day out. Free resort-wide Wi-Fi has been rolled out, and a new mobile app. Special promotions are targeted at specific overseas markets with growth potential. Also newly launched, the park’s self-developed proprietary PFlow guest management system – winner of a GSM Association Asia Mobile Award – is enhancing how people experience the park.
“PFlow is a custom-designed integrated mobile platform that enables timely collection, analysis and dissemination of guest flow and guest mix information. The data empowers our management team to make calculated decisions that can enhance guest experiences, such as the proactive management of guest flow, operations and manpower,” says Li.
Furthermore, Ocean Park’s “Big Five” seasonal offerings are updated and enhanced, often featuring new local elements and strategic brand collaborations, to ensure Summer Splash, Halloween Fest, Christmas Sensation, Lunar Lucky Fiesta and Animal Discovery Fest keep people returning year after year.
INTENSIFYING COMPETITION
The region’s theme park sector is heating up, particularly with Disney opening in Shanghai last June. For families who want to visit a theme park in the region, the China resort must be at the top of the list.
“Ever-intensifying competition posed by new and existing themed attractions in the region, including Disneyland Shanghai, Chimelong Ocean Kingdom in Zhuhai, and numerous family entertainment facilities in Macau, have channelled away, or even, deterred Mainland tourists from visiting Hong Kong as they can gain easy access to themed entertainment closer to home.”
“However, despite the current downturns in economy and the industry, the demand for leisure activities in the region will continue to grow, given the rising number of middle class within Mainland China, and the rapidly increasing income levels.”
Li believes the growth of the attractions industry in Asia is helping meet demand for leisure and entertainment and in turn promoting both short and long-haul tourism in the region. Big players like Disney raise standards and increase appetite for large-scale destination attractions.
“The entry of international players encourages theme parks in the region to improve their hardware and software to meet the expectations for high quality, fun and value-for-money guest experiences, heightening the industry’s standards.”
MANAGING A CRISIS
As Li reflects on a 40-year story, what’s the greatest challenge the park has faced?
“I believe that would be around 2003, the time when SARS hit Hong Kong and the region, impacting Hong Kong’s economy and the sentiments of locals and overseas visitors, not to mention the park’s attendance. That was a big challenge for all members of the park and for me as the finance director at the time.”
Li says that the park’s persistence and strength in the face of such adversity helped the business survive as it looked to the future with the launch of the highly ambitious MRP, which broke ground in late 2006 and was completed in July 2012. That year the park became the first Asian winner of the IAAPA Applause award.
ANIMAL LOVERS
Ocean Park’s position as a marine and animal attraction should not be forgotten. The company’s mission to educate guests about wild animals has always been a central tenet. It became the first zoological park outside North America to be accredited by the Association of Zoos and Aquariums (AZA) – and that accreditation is something the park takes very seriously.
“All zoos and aquariums have a responsibility to ensure the highest standard of welfare for all animals in their care. The park subscribes to the animal welfare ordinances in Hong Kong and works closely with the Agriculture, Fisheries and Conservation Department to ensure that all our exhibits, along with the management practices, are designed with the animals’ physical, social and psychological needs in mind.”
This has meant that over the years Ocean Park’s status has grown. The facility invests in education and scientific research, works on conservation in the wild through Ocean Park Conservation Foundation Hong Kong (OPCFHK) and is now recognised as an international conservation centre. The park shares its expertise in sustainable breeding programmes which focus on genetic diversity and recently became the first Asian facility to be certified by the American Humane Association. Meanwhile the OPCFHK supported 51 conservation projects across nine countries last year.
Onsite, Ocean Park has an approach that aims to facilitate learning through intimate experiences with animals, such as dolphin, penguin and seal encounters. But how does Li react to criticisms about attractions that encourage human-to-animal interaction? For example, TripAdvisor recently announced it would stop selling tickets to attractions that offer direct contact with wild animals. Is this something that could affect the park?
“We understand TripAdvisor’s decision would encourage animal facilities to put greater consideration into the responsible designing of educational programmes that involve close encounters with animals in captivity,” Li says. “While we agree there are different ways to raise awareness on animal conservation, we strongly believe that the impact of actually seeing and connecting with animals is much more immediate and far-reaching than alternative methods, thereby irreplaceable in inspiring people to make behavioural changes in their daily lives to contribute to protecting these precious animals.”
CHANGING WORLD
Li cites some studies by the Alliance of Marine Mammal Parks and Aquariums (AMMPA) that found nine out of 10 people believe children learn more about marine mammals at an aquarium or zoo than in a school classroom or from TV programmes.
“In our beliefs, it is important for accredited facilities, such as Ocean Park, to provide opportunities for guests to experience animals in a respectful, safe and educational environment. Our guests are touched at their hearts and are taught about the need to conserve the animals. The positive effect of our presentations has been validated time and time again through third-party research and in-park guest surveys,” Li says, though he concedes he will continue to “observe any changes in the situation”.
“Nothing will ever stop us from constantly improving ourselves. We understand that the world is changing quickly and that’s the same for the standards in animal welfare nowadays,” says the CEO. “Therefore, going forward, we shall continue to keep our animal facilities and management practices up to, or even exceeding, industry standards, in order to offer the best possible care to all animal ambassadors in the park while promoting the important messages of conservation to our guests.”
“The key to remaining resilient is we understand our edge and we never cease to amuse our guests. We are determined to keep this up under all circumstances.”
