Disney mulls new hotels and tipped to make first profit

PUBLISHED : Friday, 09 November, 2012, 12:00am
UPDATED : Friday, 09 November, 2012, 5:27am

Disney is considering adding three hotels to Hong Kong Disneyland, which is set to turn a profit for the first time.

The company is understood to be discussing the plan at board meetings with the government, the largest shareholder in the seven-year-old amusement park.

A source familiar with Disney's operation said the amusement park made a profit of more than HK$100 million on revenue exceeding HK$800 million in the financial year from October 2011 to this September - the first since it opened in 2005.

Attendance was up more than 10 per cent thanks to record numbers of visitors during summer and Halloween celebrations.

Its two hotels - the 400-room Hong Kong Disneyland Hotel and the 600-room Disney's Hollywood Hotel - had occupancy rates of about 80 per cent on weekdays and more than 90 per cent at peak times.

The results have encouraged Disney, which will own 48 per cent of the park by 2013, to consider expanding. It has worked on plans to develop new attractions on the seven hectares of land remaining for the park's first phase of development.

Building new rides is seen as the most effective way to drive revenue, but hotels are also on the agenda in the face of high demand for accommodation.

"It is unlikely for the three hotels to be built simultaneously … it would take one to three years to build a hotel," the source said.

Depending on its quality, a hotel would cost HK$1 billion to HK$4 billion with the government as biggest shareholder paying its share. A Disney spokesman would not comment on the figures, saying the annual performance results would be announced early next year.

Rival Ocean Park is preparing to put two hotels - Ocean Hotel at the park's main entrance and Fisherman's Wharf Hotel at Tai Shue Wan - out to tender in the first quarter of next year after the initial tender lapsed a year ago.

Park chairman Allan Zeman said the hotels were expected to be completed in 2015.

"Hotels are an important part of the park's future. We are working with the government on the most viable terms," he said.

The lapsed tender was based on the build-operate-transfer model under which bidders would build and operate the hotels and share the profits with Ocean Park before surrendering ownership after 30 years.