Family entertainment giant Disney (NYSE: DIS ) broke out of its typically tight-lipped mode of announcing theme park attendance figures when it revealed that Hong Kong Disneyland has entertained more than a million guests.
Disney has never been one to break down the turnstile clicks at its domestic parks. Its quarterly reports often describe whether attendance is rising or falling at its resorts, but the company does not announce round attendance figures. It lets the industry trades, such as Amusement Business, estimate and dispense those figures to the public.
However, there are a few good reasons why Disney has become a chatterbox regarding its performance in China. For starters, the South China Morning Post reported earlier this month that physical counts of guests entering the park on two different days came in well below the averages that the park would need to achieve to draw its stated goal of 5.6 million in annual attendance.
Another reason is that the Chinese government bankrolled the majority of the park's $2.7 billion construction cost. Stories of waning attendance, if left unchecked, would give critics of the deal some potent ammo to attack China's massive $2.4 billion investment in the joint venture.
Perhaps the third and final reason for the disclosure is that, despite the success of Disney's theme parks in Japan, many still associate Disney's global theme-park push with EuroDisney. The French park got off to a bumpy start, eventually reaching the point where creditors got antsy and Disney renamed the park Disneyland Paris in an effort to wipe away earlier missteps.
If Disney were to trip up early again, it would hurt the company's chances of brokering deals with other countries to expand its empire. Japan's two successful Disney parks are neither owned nor operated by Disney, as their lavish capital expenditures bear out. Disney has been reluctant in recent years to invest in its domestic parks, making its two most recent stateside openings the weakest performers in their respective states.
It shouldn't have to be that complicated. You can see consistent growth at a regional amusement park operator like Motley Fool Income Investor pick Cedar Fair (NYSE: FUN ) , and even the troubled Six Flags (NYSE: PKS ) chain has exhibited signs of life over the past year. For Disney's international push, the success of its theme parks takes on an added layer of urgency because those parks serve as a brand ambassadors. It's why even General Electric (NYSE: GE ) makes sure that its Universal Studios theme parks aren't limited to its two coastal bookends.
Success in Hong Kong would translate into more ambitious expansion in the world's most populous nation, even though just about a quarter of the park's visitors have come from mainland China. It's a region that clearly has explosive opportunity when it comes to leisure, as the economy improves and disposable income becomes a bit more disposable. It's why the Motley Fool Rule Breakers newsletter service has singled out two different Chinese gaming companies, NetEase.com (Nasdaq: NTES ) and Shanda Interactive (Nasdaq: SNDA ) , as attractive growth stocks. Online games are something that Disney is really taking seriously at the moment, and perhaps that's yet another reason why Disney can't afford to lose out on China.
Longtime Fool contributor Rick Munarriz did go to mainland China once. He looks forward to seeing how things have changed since then. He owns shares in Disney and units in Cedar Fair.The Fool has a strict disclosure policy. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.