Poaching from Mickey

Dec 15, 2008
*Special to asia!
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The Venetian fights Disneyland in an all out battle for staff.

On August 1, Sheldon Gary Adelson, a casino tycoon, celebrated his 74th birthday. It was a joyous occasion for the once-poor Jewish boy who grew up selling newspapers in Boston and whose wealth today is close to rivalling that of Bill Gates. But not so for the guys who run Hong Kong Disneyland.

In a long and extremely varied career – Adelson started more than 50 businesses including Comdex, the world’s biggest computer show that he sold for US$860 million in 1995 – he has never competed with Disney. Until now.

In 2004, Adelson opened his Venetian casino in Macau. He recouped his investment in record time and went on to build a huge convention centre, also called Venetian, on the former Portuguese colony.

The convention centre opens on August 28, a very auspicious day. It will be the vanguard of Macau’s effort to compete with Hong Kong for a bigger slice of the lucrative convention business.

A large convention centre needs good soundmen, lighting technicians, event organizers, crowd pleasers and people to generate the buzz that makes or breaks the place. Adelson has decided to recruit many of them from Disneyland just across a small body of water in Hong Kong. And he is not stinting on pay.

Talk is Venetian has offered many Disneyland employees double the salary – averaging more than HK$23,000 (US$3,000) a month – to switch jobs. And most who received the offer did.

This caused a panic in Disneyland, which has spent more than two years training its people only to see them now poached by a more aggressive rival. The Disneyland management tried to retain the staff, but fail to do so as it could not match the salary dished out by the Venetian.

It is rare to see Disney outmatched. Usually Disney poaches staff from others. But Hong Kong Disneyland is different. It is not only the smallest of all Disney theme parks, but it is also arguably the most unsuccessful. In July the theme park completed its second full year of operation. The occasion was marked by a lack of publicity, especially from the majority shareholder, the Hong Kong government.

It was during the Sars (severe acute respiratory syndrome) scare in 2003 that the Hong Kong government conceived what it considered the brilliant idea of using Disneyland to revitalise the territory’s sagging tourist business. It was so desperate that it agreed to take up 57% of the stake in the theme park and underwrite most of the cost.

It is money badly spent. Disneyland Hong Kong ended the first year with 5.2 million visitors, way below expectations. Its second year saw another big drop, to an estimated 4 million. (Disneyland management has steadfastly refuses to disclose numbers). Losses are mounting. The Hong Kong government, under pressure from opposition parties, is demanding Disney "do something".

"Doing something" clearly does not include matching offers from Venetian. Not only is Disneyland Hong Kong short of cash, it would also have a huge morale problem if it is to raise the salary of some staff and not the rest. There was nothing it could do but to let its people go. But this is not the end of the story. The more Adelson expands in Macau, the more he will poach from Disney. The exodus has only just begun.



lee han shihLee Han Shih is the founder, publisher and editor of asia! Magazine.


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