The opening of the Shanghai Disney Resort on June 16 this year was arguably the biggest event in the history of The Walt Disney Company since the first Disneyland opened in California in 1955. The culmination of decades of negotiation, planning and construction undertaken together by Disney and the Chinese government, as well as an investment of $5.5 billion, the park has already received an overwhelmingly positive reception from the public. But according to Philippe Gas, General Manager of the resort, this is just the beginning.
Starting out in a financial role, Gas has been with The Walt Disney Company for 25 years. He has worked on every continent where the company has a presence, making him among the most well- traveled of company executives. Before being assigned to the Shanghai park, he served for seven years as the CEO of EuroDisney. In this interview, he gives a detailed, inside look at the long process of developing the park with the Chinese government, the unique localization that Disney built into the resort and the overall mission to bring happiness to guests.
Philippe Gas, General Manager ofthe Shanghai Disney Resort
Q. Planning of the Shanghai Disney Resort goes way back, 15 or 20 years. How was the concept developed?
A. It goes back a long time, to the early 1990s, and the government of Shanghai at the time. Former Premier Zhu Rongji, who was Mayor of Shanghai from 1987 to 1991, was the one who had the idea to bring Disney to Shanghai. That’s how far it goes back when it comes to the theme park project. And then it was Bob Iger, Chairman and CEO of The Walt Disney Company, who was instrumental in his support behind the development of China for the Walt Disney Company. He arrived as President and COO of Disney in 2000, and he took back this project and really started to engage, actually with Premier Zhu Rongji, to push the agenda forward. That more formal negotiation took us all the way to 2011 and the groundbreaking of Shanghai Disney. It is a long history, but I think it came from both parties—Iger being completely certain of the potential of China for The Walt Disney Company, and the Chinese government also very interested already by the push of the new economy and tourism and thinking about Disney as one of the key drivers, simply because of who we are.
Q. Why did development of the project take so long? Is that a typical timeline?
A. I don’t think we could have expected it to be 10 years or 20 years, but you want to make sure you have a win-win formula. When we build a theme park we build it forever, we are here forever, and we are going to continue to grow. So you want to make sure you have the right level of confidence that what you do is set for that. We come with ambition, we come with pride, we come with a certain view of what we can bring to this market, but also we want to make sure we have all the elements in our hands. We also respect the fact that we are in China, we respect the rules of the game, and the interest of the Chinese parties, our partners. I wasn’t there at the time, so I don’t know what they thought in terms of timing, but it was worth the wait when you think about what we have built, and the size of the investment.
But we also didn’t waste the time, because at the same time we were negotiating, we were taking lessons from the other sites. It is part of a journey of development, understanding what to do to succeed in different contexts and different markets. So we have taken all that to make this product. Once again, we knew it would be long. I don’t think we knew it would be quite that long, but it was worth it.
Q. How did Disney coordinate with the various stakeholders, specifically the Chinese government, which is a major part of the partnership?
A. It’s a bit different in China than in France, my home culture. First of all, you have to come in with the attitude of knowing that there are many things you don’t know. This is where the partner becomes essential, a partner that you trust, a partner that trusts you, because you are going to use that partner, in this case, the Shanghai local government, and the central government as well, as a guide, as an advisor, as people you can go to and talk about issues. And that has been a key dimension of the project. We would not be successful, we would not be where we are without them, because of years of working together, of getting to know each other better, understanding how we contribute to their success, and how they contribute to our success.
And it is like any partnership: not everything is perfect. Sometimes you have a private business agenda that is not completely aligned with the public, political agenda. That happens in France, that happens in Hong Kong, that happens anywhere. It’s ok, as long as you have the same overall objective, you get to find the solution, you get to find the right compromise, and by knowing each other, we have been better able to put ourselves in the partner’s shoes. We have also been careful to not get stuck on the main agreement, the legal document that outlines the responsibilities of each side. This is a piece of paper, right, but what I am going to be aware of is that we are entering into a long-term partnership and we need to make this paper come alive. It is not just about the letter, it is about the spirit, and applying every day the spirit of trust, of partnership. So even if the document says, you, Disney, on that matter decide, I will still take advice. The product we build will be better if we work it out with our partner. And that’s an essential part of our success.
And the number-one thing of defining the relationship with the Chinese partner is understanding what China is building, what China is developing with the tourism industry and the growing service sector, and that we can play a role to help grow this industry in the country. One of most exhilarating missions that the CEO, Iger, gave me was to think of this as not only building the business, but also helping the country raise its level. And we take that very seriously. It is as important as simply making Shanghai Disney successful; it is about our role within this overall Chinese agenda, which I think is great.
Q. China obviously changed a lot while the resort was being developed. To what extent did the concept change with the country?
A. The big change of China in the past 20 years is the growth of the middle class and the fact that China is getting richer, and there is more ability for people to spend on leisure and quality of life. That plays right into our arrival and the timing.
I think the way to think of it that we are here to do something that goes completely through time, which is we bring happiness. We are here with a simple mission: allow families or friends to spend a moment together, in an environment that will allow them to get away from their day-to-day life, and create a memory that will last with them. That’s what we do. It’s very intangible, but that’s what we are here for. And that is done by creating an immersive environment, an excellence of service that goes beyond what you would expect, being able to make one person feel special when actually we have 60,000 people in the resort, and every single guest has to feel recognition of who they are. That’s why we are here, that’s what people know about us and expect from us. With that regard, nothing has really changed when it comes to our philosophy and our mission in China, because that goes across borders, across countries and through time.
Q. This resort is the not Disney’s first experience in mainland China, right? When did Disney the brand first come here?
A. Actually, the story of China and Disney started in the 1920s, and in the 1930s with the princesses and the classic Disney characters being what kids and families were exposed to first. Snow White premiered in Shanghai in 1938, and one of the most popular and well-known princesses today is Snow White. The success of the Snow White adventure we have at the park shows it. People want to relive the story of something their grandparents told them about. So really we have a long-standing relationship with China.
And now we are bringing in very new characters, very new stories, Marvel and Star Wars are coming into this market. Marvel is hugely popular here in China, all the Marvel movies, the newly- released Doctor Strange, are blockbusters. They are something we are going to leverage, and find and live those adventures here in our park. Star Wars is a story that we will create in the Chinese market, but it will grow with the expansion of the movies and franchise in the future. Zootopia is a great example of a very new movie that was an amazing success in China.
So you have these kinds of classic 1920s characters, Snow White and Mickey Mouse and friends, and then you have these brand new cool stories that are also hits. So we have the full spectrum of stories and characters that we are working with that will allow Chinese families and Chinese kids to come and meet at Shanghai Disney resort. It’s a long story, but there is a lot of opportunity to create a stronger connection with the consumers today.
Q. Creating that connection has obviously been successful, but what are some of the challenges in connecting with consumers in China?
A. First, the biggest challenge is to know what the consumers’ expectations are, and then be true to those expectations. Today Disney in China means excellence. How you define excellence is your choice, but it means something quite big. So when you come into the Shanghai Disney Resort, you expect from the moment we open, excellence, excellent service, excellency of the immersions in the stories, excellence in everything we do. And that has been our biggest objective and our biggest challenge.
We have a brand new park, with brand new technology, with brand new themes, brand new stories with brand new cast members. There are 10,000 cast members and employees who come from all over China, and they create the environment for our guests, from the moment they arrive. It is difficult for people to measure how hard that is.
And when it comes to purely how we define our job, it is staying relevant. A piece advice I need to give to any company that comes with a strong culture is that company culture is as good as its ability to find a balance, and be relevant to the expectations of the people. And so one of the things we have tried to do here is to bring things that are not necessarily Disney, but that guests expect to find. Food is a good example. People in China like to eat Chinese food, and we developed a menu throughout the park that is maybe the most diverse menu we have ever developed for any Disney, with 80% of the food representing the eight cuisines of China, and also representing the traditions of Indonesian, Malaysian and Thai food. Actually, we only have one place where we serve burgers.
Q. That touches on localization—can you get into more details about how you crafted an experience that is truly Disney and also truly China?
A. China is an amazingly buzzing place, with a lot of ability from the people of China to embrace changes and to embrace new things, and we thought it was a great opportunity to do something we have never done before. We just allowed ourselves to think differently. For example, in every Disney park, you have a main street, but we don’t have main street here. We felt it was a very Midwestern America concept from the turn of the 20th century and not something that was the most compelling or relevant to Chinese consumers.
So what we have here is Mickey Avenue, with beloved Disney friends welcoming our guests at their entry into the park. This is because people come to Disney for Disney, whether you are in Shanghai, in Hong Kong, or Tokyo. They want to see the Castle, they want stories they can recognize, and they want to see their favorite character. So we have people see things they know when they come into the park, and have them say “I know where I am.” It’s like if you go to Sydney harbor and you see the
Sydney Opera House, you know where you are in the world, you don’t have to guess. You say “I am here, I have arrived.” That’s the same thing we tried to apply here.
But there are some elements that are important to me as my culture tells me, food is one. Language is one. And it is not just saying every sign has a version in Chinese, that’s something we do everywhere. If you go to see our shows, take the stunt show, the pirate show, this show was developed in Mandarin. The story, the dialogues, everything was developed by local Chinese writers for a Chinese audience, not as we do it usually in English and then translate in Japanese or French. No, we have done this with the consumer in mind, so the stories, the jokes, the humor is actually relevant to you because it is your culture talking to you, it is not us trying to look like Chinese.
The architecture has changed some as well. Some elements, like the Castle, remind people of where they are, but we subtly recognize that we are in China at Shanghai Disney. The highest finial of the castle has the Peony flower, the national flower of China. The architecture of Disney town is done in Shikumen style that once again reflects the culture of China. Those are elements that people can appreciate. And with those elements we have tried to express our pride to be in Shanghai, to be hosted and welcomed by the country.
Q. Being a Western brand, do you think Chinese people then see the magic kingdom as something “Western,” or is it a place that is fantastical and beyond that kind of distinction?
A. I don’t think they think about it terms of Western and Chinese. I think they think about Disney as Disney, and the stories and characters. Our values go across borders: kindness, family, friendship, those are values that are very important in China, all those values go across borders. And you can oppose Western versus Eastern, but when it comes to Disney people tend to have a truce, and those values that are communicated, for most of us, if you are an eight year old child, or an old man like me, a lot of our memories start with a Disney story, and so it brings the child back into who you are. And I see that even now in my life. I meet very senior executives, or very serious businesspeople, who turn into kids when they realize I am working for Disney. And why? Because it brings the kid back in you. Either because you are a granddad, and your grandchild now is playing with a Disney toy, or because of yourself. Maybe your dad took you to see a Disney movie. That kind of thing goes beyond borders.
Q. The park has been open for a few months now. How is it going so far?
A. It has been an amazing first few months. But I’ll repeat what I said before: We are here forever. So we are not here to think just about the first few months. Speed is not an object, we want to do things right. This is a new market for us, a market that knows our name, knows a few things about us. And we have one opportunity to make the first good impression, which is critical.
And let me tell you this is the most balanced opening I have seen, and I have been exposed to three, Disneyland Paris, Hong Kong and Shanghai. This one is amazing, and not only because of the popular success, we welcomed four million guests in our first four months of operation, which included the peak summer season, and that’s just an amazing reflection of the demand. We have also achieved a fantastic balance when it comes to communication, the reception of the local market, from all the stakeholders, from the guests, the public parties, the press, everyone has been so supportive of the arrival. We feel we are already part of the environment, which is something very important to us. We want people to recognize we are here, and we want to be a citizen of Shanghai, and we have been, right from the opening day. It is amazing to see the reaction of the guests to what we offer them. They love our rides, they love the shows, they spend the maximum amount of time in the property to see everything. We are very happy with the opening.
Q. Right now is a high-growth period for theme parks in general in China, with venues opening all across the country. What do you think of the competition?
A. I don’t let myself get bothered by things that I don’t control. But I think we help the competition by helping to raise the standards, and raise the level of entertainment. Because when you have a great experience, you want to have more. Meaning if you have a great experience in a park near me, you will want to come to have a great time at Disney. And if you have a great time at Disney, you will want to have a great time somewhere else. And so quality feeds success, and that to me I would say comes back to our mission in China, which is to help raise the standards. I think we came at the right time, because clearly tourism is growing in the country, and that’s great. And second we can help bring more quality entertainment, more quality tourism to China and that is the way I am looking at it. Every day I am thinking of how we can be better at what we do, that’s what really matters to me.
I don’t control what the competition does, but I hope they do great because it will help us. But we don’t let ourselves be bothered by any of it because we are here to do the best for our guests.
Q. You mentioned that Disney is here forever—can you give us any inkling about future plans?
A. It is definitely just the beginning, and we just recently announced we’re already expanding our park with the addition of Toy Story Land. We are here to stay and grow, and we are convinced of the long-term success. But it is a bit early to talk about plans for the future because we are focused on making this park a success, we’ve been open not even five months. It would be very presumptuous to tell you about the next phase. We need to make sure we have a stabilized operation, and that we have a momentum that continues to build. So my focus is on this first phase, but we definitely have a high ambition.
This article has been reproduced with permission from CKGSB Knowledge, the online research journal of the Cheung Kong Graduate School of Business.