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• Theme parks, which provide a variety of entertainment options packed into an enclosed area, are an ideal avenue for attracting more visitors to a particular city. Indeed, a theme park is a destination in its own right, which combines entertainment, food/beverages and souvenirs, and a fantasy environment that is different from that outside the park.^{1Legend symbol denoting See Ho & Ap (2009).} The United Nations World Tourism Organization^{2Legend symbol denoting The organization is a specialized agency of the United ‎Nations and the leading international organization in the field of tourism. It serves as a ‎global forum for tourism policy issues and a practical source of tourism know-how.} includes theme park as one of the key reasons for people visiting a particular city.
• Theme parks have a long history dating back to the 1500s in Europe^{3Legend symbol denoting Denmark's Bakken, which was opened in 1593, is the oldest amusement park in the world.}, and have evolved since then. In 1955, the opening of Disneyland in California of the United States marked a turning point in the modern theme park business, particularly as an antithesis of the old amusement parks^{4Legend symbol denoting Both theme parks and amusement parks serve the same purpose of providing outdoor fun and entertainment to males and females of all ages. However, theme parks embody a theme or a story to tell the visitors and visitors can feel the underlying theme when they are enjoying its various features.} in its environment, atmosphere, cleanliness and safety.^{5Legend symbol denoting See Milman (2007).} In recent decades, the theme park industry has expanded globally with the development of worldwide variety of theme parks ranging in size, capacity, products and entertainment offerings.^{6Legend symbol denoting The development of theme parks around the world has followed a typical product life cycle curve of market growth followed by stabilization and then reinvestment to diversify. Developers responded to the maturation and saturation of the North American market in the early 1980s by pursuing international opportunities, starting with the opening of Tokyo Disneyland in Japan in 1983. See InPark Magazine (2015).} In 2014, about 223.5 million people visited the top 25 worldwide theme parks. This figure was about the number of international tourists that visited France, the United States and Spain combined in 2014.^{7Legend symbol denoting According to the United Nations World Tourism Organization, France, the United States and Spain were the world's top three tourist destinations in 2014.}
• Hong Kong is home to two large theme parks. Ocean Park covers more than 915 000 sq m and the Hong Kong Disneyland spans 720 000 sq m. Ocean Park has been profitable in recent years, whereas the Hong Kong Disneyland only started turning a profit in 2012 after its opening in 2005. However, the business prospects for both theme parks are likely to be overshadowed by the recent slowdown in Mainland visitor arrivals (the major source market) and the expected intensifying competition among theme parks in the Asian region. This issue of Essentials reviews the challenges facing Hong Kong's theme park industry, particularly the opening of a number of large theme parks in Asia during 2016-2019.

Theme parks in Hong Kong

• Ocean Park and the Hong Kong Disneyland are among the most well-received tourist attractions in Hong Kong, which ranked the fourth and third most visited places by tourists respectively in 2014.^{8Legend symbol denoting Globally, Ocean Park ranked the fourth in Asia and 13th worldwide in 2014 according to the TEA/AECOM Theme Index. The index shows the rankings of top worldwide theme parks as measured in terms of their annual attendance. The corresponding rankings for the Hong Kong Disneyland were sixth and 15th in 2014.} According to the latest attendance figures available, both theme parks however saw consolidation in their number of visitors in most recent years. After recording double-digit growth during 2011-2012, the number of visitors to Ocean Park increased by only 8.5% in 2013 and 7.0% in 2014, and even declined by 3.9% in 2015. For the Hong Kong Disneyland, the visitor numbers increased by some 13.6% during 2011-2012 before easing to a growth of 10.4% in 2013. The growth rate decelerated further in 2014 to a mere 1.4%.
• The weak attendance figures for both Ocean Park and the Hong Kong Disneyland reflected, among other things, the recent setback in the growth of Mainland visitors who accounted for about 50% of attendance in both theme parks in 2014.^{9Legend symbol denoting In 2014, Mainland tourists constituted the largest portion of visitor attendance in the Hong Kong Disneyland with the guest mix of 32% local, 48% Mainland and 20% international. Ocean Park does not publicize the composition of the visitors' origin. According to the Commissioner for Tourism, the visitor profile of Ocean Park was broadly similar to that of the Hong Kong Disneyland.} The number of Mainland visitors grew by only 16.0% in 2014, compared with an average annual increase of 22.7% during 2010-2013.^{10Legend symbol denoting The number of Mainland visitors surged after 2009 when the Central Government allowed residents with eligible Shenzhen household registration to apply for One-year Multiple-entry Individual Visit Scheme Endorsements to visit Hong Kong.} The setback continued into 2015 with the Mainland visitor numbers down by 2.9%, the first since 1997.
• Reduced Mainland visitor arrivals^{11Legend symbol denoting See Legislative Council Secretariat (2015) for various factors contributing to the reduced Mainland visitor numbers.}, coupled with the expected increasing competition from other theme parks in Asia, add to the challenges facing Ocean Park and the Hong Kong Disneyland. This is particularly the case in view of the recent rush of theme park construction across Asia.

Theme parks in Asia

• The theme park industry in Asia has experienced remarkable growth in recent years.^{12Legend symbol denoting According to the Themed Entertainment Association (2015), there were 123 million visits to the top 20 Asian theme parks in 2014. The figure represented an average annual increase of 6.3% since 2010, which was larger than the corresponding growth rates for the top 20 North American theme parks (2.8%) and the top 20 European theme parks (1.4%).} Currently, Asia is the second largest theme park market in the world after North America with annual attendance estimated to have exceeded 300 million visitors or more than one-third of global theme park attendance.^{13Legend symbol denoting See Themed Entertainment Association (2015).}
• Looking ahead, a number of favourable factors should help boost the growth potentials of the theme park industry in Asia. These include (a) growth in domestic and international tourism (especially outbound tourism of Mainland visitors^{14Legend symbol denoting An investment house recently estimated that by 2020 outbound Mainland tourist numbers would reach 200 million, doubling the corresponding figure of 100 million in 2013. See CLSA (2016).}), (b) increasing demand for new leisure/tourism and entertainment experiences in the Asian region, (c) expanding middle class^{15Legend symbol denoting According to the Organisation for Economic Co-operation and Development, the global middle class was forecast to increase to 4.9 billion people by 2030 from 1.8 billion in 2009. Almost all of this growth (85%) would come from Asia, with China and India home to the largest share. See Kharas (2010).}, and (d) opening of a number of major new theme parks during 2016-2019. Reflecting the above fundamentals, theme park spending^{16Legend symbol denoting Theme park spending consists of admission fees and, if applicable, food/beverage, souvenirs and other related purchases made at the parks.} in Asia is forecast to increase from US$13.1 billion (HK$101.6 billion) in 2013 to some US$25.5 billion (HK$197.8 billion) in 2018, representing an average annual growth of 14.2% over the period.^{17Legend symbol denoting See International Association of Amusement Parks and Attractions (2014).} The figure is much higher than the corresponding growth rates for the global average (9.5%) and North America (7.6%).

New theme parks in Asia

• In Asia, new theme parks are scheduled to open from China, Japan and South Korea to Singapore and Malaysia over the coming years (Table 1), targeting Asia's rapidly growing middle classes. In Malaysia, the Twentieth Century Fox World Genting Malaysia will not only serve as a standalone attraction for leisure activities to cater to family visitors, but also as part of an integrated resort to attract diversified types of visitors such as MICE^{18Legend symbol denoting MICE visitors refer to those who travel for meetings, incentive travels, conventions and exhibition events.} visitors.^{19Legend symbol denoting The Twentieth Century Fox World Genting Malaysia, to be opened in Genting Highlands, constitutes part of the rejuvenation project to redevelop the Resorts World Genting which was built in 1978. The project aims to expand the hotel capacity of the Resorts World Genting and develop the resort into a main hub for shopping, dining, gaming and themed entertainment. As to themed entertainment, the Genting Outdoor Theme Park was closed in 2013 to make way for the Twentieth Century Fox World Genting Malaysia which is scheduled for completion by end-2016.} The same holds for South Korea's Resorts World Jeju which is an integrated resort with a theme park, hotels, a large adventure waterpark, gaming entertainment, cultural facilities, leisure and entertainment amenities.
  
  Table 1 - Ongoing major theme park projects in Asia
  
  

  Country/theme park	Expected opening date	Area (sq m)	Expected annual attendance	Attractions
  China
  Shanghai Disney Resort	June 2016	3.9 million	10 million	•  The tallest and largest castle among all Disney theme parks. •  The longest parade route of all Disney theme parks.
  Shanghai Haichang Polar Ocean Park	end-2017	0.3 million	6 million	•  The world's largest polar-themed park showcasing more than 500 species of polar animals and 20 000 types of sea creatures.
  Universal Beijing	2019	1.2 million	10 million	•  The world's largest Universal Studios theme park showcasing blockbuster movie themes and presenting family shows with Chinese culture.
  Japan
  LEGOLAND Japan	Q2 2017	0.1 million	2 million	•  Located in the Nagoya city (名古屋). •  The second LEGOLAND park in Asia featuring a Nagoya Castle made up of 225 000 LEGO blocks.
  Moomin World	2017	0.2 million	1 million	•  To be opened at Lake Miyazawa (宮沢湖), an hour's drive from Tokyo. •  The world's second Moomin World after its origin, Finland.
  South Korea
  Robotland	Sept 2016	0.8 million	2.8 million	•  Located in Incheon (仁川), Robotland is the world's first robotic theme park. •  The theme park comprises exhibitions and amusement elements and includes four major areas (Robot Kingdom, Kidbot Village, Robotopia and Fun City).
  Resorts World Jeju	2017	2.5 million	information not available	•  An integrated resort on the Jeju Island (濟州島) with a myth and history theme park in medieval setting.
  LEGOLAND Korea	Mar 2017	0.3 million	2 million	•  Located in Chuncheon (春川市), the theme park is the world's largest LEGOLAND resort.
  Twentieth Century Fox World Korea	2018	0.3 million	10 million	•  The world's third Twentieth Century Fox World to be opened in Changwon (昌原市).
  Malaysia
  Twentieth Century Fox World Genting Malaysia	end-2016	0.1 million	5 million	•  The world's first Twentieth Century Fox World featuring characters, rides and activities around Fox's most popular and loved movies.
  Movie Animation Park Studios	mid-2016	0.2 million	1.5 million	•  Located in Ipoh (怡保), the Studios is Asia's first animation theme park featuring the Smurfs and other cartoon characters from DreamWorks.
  Singapore
  Funtasy Island	2017	3.3 million	1 million	•  The world's largest eco-park to be built by a Singaporean company on Indonesia's Riau Islands (廖內群島).

  
  Sources: Various sources including websites and press releases of relevant developers and entertainment companies.
  
  
• Apart from the positive industry outlook, government support has also fuelled the rush of theme park construction across Asia. In the region, governments often support the development of theme parks in their tourist destinations as an attractive theme park can serve as a main anchor for domestic and international tourism. In addition, new theme parks also enhance the attraction of a tourist destination, bringing in more visitors and hence economic benefits for the local community. In particular, they provide job opportunities for part-time and lesser skilled workers.
• As shown in Table 2, China, Japan, South Korea, Singapore and Malaysia have put in place government support measures to incentivise the development of theme parks in their tourist destinations. These measures include public-private partnership, tax incentive scheme, infrastructure support (e.g. transport facilities) and land grant.
  
  Table 2 - Government support measures for theme park projects in Asia
  
  

  Country/theme park	Government support measures
  China
  Shanghai Disney Resort	•  Public-private partnership
  Shanghai Haichang Polar Ocean Park	•  Public-private partnership
  Universal Beijing	•  Public-private partnership, and infrastructure facilities
  Japan
  LEGOLAND Japan	•  Infrastructure facilities
  Moomin World	•  Public-private partnership
  South Korea
  Robotland	•  Public-private partnership, and tax reduction/exemption
  Resorts World Jeju	•  Tax reduction/exemption
  LEGOLAND Korea	•  Tax reduction/exemption, infrastructure facilities, and land grant
  Twentieth Century Fox World Korea	•  Public-private partnership
  Malaysia
  Twentieth Century Fox World Genting Malaysia	•  Tax reduction/exemption
  Movie Animation Park Studios	•  Public-private partnership
  Singapore
  Funtasy Island	•  Infrastructure facilities

  
  Sources: Various sources including websites and press releases of relevant developers and entertainment companies.

Concluding remarks

• The expected increasingly competitive landscape among different theme parks in Asia underlines the importance for Hong Kong's theme park industry to continue developing novel and distinctive elements. Against this, Ocean Park has embarked on developing an all-weather indoor cum outdoor waterpark at Tai Shue Wan. The construction of the Park's first hotel has also commenced. Both development projects are expected to be completed in 2017. The Hong Kong Disneyland will have a new themed area "Iron Man Experience" featuring the Marvel characters in late 2016. Added to this, a new hotel is scheduled to open in early 2017.

Prepared by Samantha LAU and YU Chun-ho
Research Office
Information Services Division
Legislative Council Secretariat
28 January 2016