A successful Disneyland is an asset for Hong Kong
The theme park business remains tough, but Disney should speed up expansion and explore new ways to attract visitors
Maintaining the Disney magic in Hong Kong has proved to be a challenge. The theme park on Lantau Island recorded another deficit of HK$171 million last year, 15.5 per cent higher than its HK$148 million loss in 2015. Pressure is growing on the US entertainment giant to find new ways to enchant more people to visit the Magic Kingdom from near and far.
The loss is in line with the city’s tourism downturn. Dragged down by a plunge in mainland visitors, overall attendance fell 10 per cent to 6.1 million. Mainlanders now only account for about one-third of the park’s attendance, down from a peak of 50 per cent in 2012 and 2013. Ocean Park has not been spared either, posting a loss of HK$241 million last year, the first deficit since 2003.
There had been concerns that the opening of Shanghai Disney last June would deal a blow to the Hong Kong park. The management maintains that a country as big as China has room for two Disneylands. But it would seem there has been some impact.
The latest forecast by the Tourism Board does not bode well for the theme park business. Total visitor arrivals to Hong Kong are expected to shrink by another 2.2 per cent to 55.38 million in the coming year. While mainlanders still account for the majority, their visits are expected to drop by 3.7 per cent to 41.18 million. Per-head spending by overnight visitors is also falling by more than 5 per cent to HK$6,200, according to the board.
With the Lantau park running at a loss for eight out of its 11 years, financial viability is a valid issue. Some people have even queried whether it is still a worthy business venture, referring to the government’s 53 per cent stake in the park. The perception is also coloured by financial arrangements that arguably put taxpayers in an unfair position. So far, the government has not received a single dollar in dividend payments, while the parent US company has been receiving an unspecified amount of management fees and royalties each year, regardless of business performance. The questions will no doubt come under closer scrutiny when the government seeks the Legislative Council’s approval to inject another HK$5.8 billion for the park’s expansion.
It is true that the park has not been as profitable as previously thought. But Disneyland is as much an investment in tourism infrastructure as a business venture. With more theme parks due to be commissioned in the region later, we have to keep strengthening our tourism facilities. A successful Disney is in the city’s interest. It is good to hear that the park’s performance has shown gradual improvement in the past six to eight months. It should speed up its expansion while exploring new ways to attract more visitors.