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Boost for theme park after second-year loss of HK$1.5b
Hong Kong Disneyland is finally  expected to achieve its first-year attendance target of 5.6 million this year, a marked improvement on last year's figure of less than 4.2 million.
Disney has already revealed double-digit percentage growth year on year in the theme park's overall business, including attendance, in the six months to March.
Now sources familiar with the park's operation say that its performance this summer also met targets for its 2007-08 financial year, which ends next month, and that attendance is set to reach 5.6 million.
The sources attributed the rebound to improvements in its marketing strategy on the mainland and to strong economic growth.
The park reported 5.2 million visitors in the first 12 months after it opened in September 2005. Attendance at the Lantau attraction has not yet met forecasts. The park, Disney's newest, will celebrate its third anniversary in two weeks' time under new  chief Andrew Kam Min-ho.
The government owns a 57 per cent equity stake in the  park joint venture, with Disney holding 43 per cent.
When the Walt Disney Company and the government sealed their deal in 1999 to build the park, the government gave projections for attendance. It forecast 5.21 million visitors in the first year, 5.47 million in the second year and 6.22 million in the third year, which ends next month.
Disney's own target for the first year was 5.6 million.
Confidential documents seen by the South China Morning Post show the park had 4.17 million visitors in its second year - an average of 11,400 a day, or roughly one-third of its 34,000 capacity. Hong Kong was the biggest source of visitors that year, accounting for 31 per cent. About 15 per cent were from other cities in southern China and 25 per cent from elsewhere on the mainland. International visitors made up 29 per cent.
The documents show visitors spent more than HK$2.36 billion on admission, merchandise, food and other items but that the park's costs totalled HK$2.64 billion, meaning a loss of HK$272 million. Including depreciation of HK$775 million and interest expenses of HK$468 million, the  park suffered a loss of more than HK$1.5 billion in its second year.
Hong Kong Disneyland is taking steps to ease its financial burden. These include early repayment, by the end of next month, of about HK$2.6 billion in commercial loans. To generate more business, the park needs to quickly add more big attractions. Working plans seen by sources include a Wild West-themed Frontierland with a mountain train ride. One of the working titles for the attraction is 'Grizzly Peak'.
A park spokesman said: 'We do record healthy growth in our business, in particular the MICE [meetings, incentives, conventions and exhibitions] business, hotel occupancy, food and beverages and sales of our merchandise.
'We do not comment on attendance figures, as they do not reflect the full picture of our business.'
An expert on the Walt Disney Company's theme park operations, Dennis Speigel, president of consultancy International Theme Park Services, based in Cincinnati, Ohio, said attendance of 5.6 million in the third year was possible but that attendance of 15 million over three years was below expectations.
A government spokesman said: 'We would like to see continuous improvement in the park's attendance and operations. We will continue to urge the management to enhance operating efficiency, revamp marketing strategy and launch more diversified events.'



Disneyland set for 5.6m attendance