Hong Kong Disneyland posts first profit since opening

PUBLISHED : Friday, 30 November, 2012, 1:38pm
UPDATED : Friday, 30 November, 2012, 6:47pm

Hong Kong’s struggling Disneyland has posted its first profit since opening seven years ago thanks to an increase in mainland Chinese visitors, a report said on Friday, as it considers opening new hotels.

The news will come as a welcome relief for the resort, which has battled below-forecast visitor numbers since opening in 2005, while doubts about its future have swirled since China gave permission for a park in Shanghai.

The Wall Street Journal report, which cited an unnamed person familiar with the park’s financial situation, gave no details.

A Disney spokesman declined to confirm the report when contacted, saying the park’s financial report will be released early next year.

A deal to open Hong Kong Disneyland, which is majority owned by the Hong Kong government, was signed in 1999 as part of a plan to boost the city’s economy as it reeled from the Asian financial crisis.

However, it has been desperate to ramp up the number and quality of its attractions as it tries to lure more big-spending visitors from the mainland, while it has also embarked on a huge public-relations campaign.

Walt Disney Company has also boosted distribution of its television shows across the country, while it also runs nearly 24 hours of weekly programming, the Journal said.

And it seems there has been some success. The report said attendance jumped to 5.94 million visitors in the year to September 2011 from 4.5 million in 2008.

It also said the proportion of mainland visitors reached 45 per cent in fiscal 2011, compared with 34 in 2006, while Hong Kong residents made up just 31 per cent, down from 41 per cent.

The park in January said it posted its smallest annual loss for the fiscal year ending October 1, 2011, after enjoying a 13 per cent rise in visitors and a surge in hotel occupancy.

Net loss fell to HK$237 million (US$30.5 million), less than half its net loss of HK$718 million in 2010.

Critics have attributed much of the park’s struggles to its size – it is the smallest of all Disney’s theme parks – and a lack of attractions.

The resort, including two hotels, covers about 125 hectares.

However, the report said the park’s investors are discussing plans to add new hotels to the resort to increase overseas arrivals.

Adding to the resort’s problems was news that the Chinese government had given permission for the building of a US$3.7 billion Shanghai Disneyland, which is expected to open in 2016 and could provide stiff competition.