Hong Kong’s Ocean Park will freeze salaries to avoid lay-offs with visitor numbers slumping 60 per cent as protests take hefty toll

Hong Kong’s iconic Ocean Park has announced a pay freeze as a sharp decline in visitor numbers in the second half of 2019 and a sluggish economy take their toll on the attraction.

The park said on Friday the freeze, starting from January, was a difficult budgetary decision to make.

“But by forgoing staff raises, the park will avert lay-offs that might otherwise be necessary,” the Aberdeen resort said in a press statement.

The last time the attraction froze all salaries was in 2003, when a deadly outbreak of Severe acute respiratory syndrome (Sars) hit the city.

In 2017, amid an economic downturn, most frontline staff still enjoyed a 1.5 to 2.6 per cent pay rise although management did not get an increment.

The latest announcement followed the park last month reporting a widening deficit for the past financial year. The deficit more than doubled to HK$557.3 million (US$72 million) in its financial year to June 30, from HK$236.5 million the previous year – largely as a result of repairs from damage caused by Typhoon Mangkhut, which struck in summer 2018.

Wong Shuk-fan, chairwoman of the Ocean Park Employees’ Union, said the pay freeze was understandable given the huge deficit last year, but she believed the management had responsibilities as well.

“Given the chief executive of Ocean Park announced plans to retire this July, and they are still [in the process of] hiring both a chief executive and personnel director, it seems we are running without proper management,” Wong said.

“We want someone with experience to head the company through difficult times.”

The ongoing civil unrest, which broke out in June over the now-withdrawn extradition bill, has also dimmed the 42-year-old park’s prospects.

The park said on Friday that visitor numbers dropped more than 60 per cent year-on-year from July to December 2019 and that it expected market conditions would remain unpredictable with no quick rebound for the tourism sector in sight.

To maintain operational and financial sustainability in an extremely difficult operating environment, the park has been implementing a number of cost control measures on the premise that visitor service, animal welfare, show quality, and the safety of guests and staff would not be affected.

These measures include strict control of operating expenses and discretionary expenses, energy conservation, suspension of non-urgent and non-essential hires, voluntary no pay leave, voluntary early retirement and the latest, cancellation of salary review.

However, to celebrate the Lunar New Year, all eligible full-time employees will receive a red packet of HK$600, whilst eligible part-time staff will receive a red packet with half that amount.

The extradition bill protests evolved into a broader anti-government movement with escalating levels of violence between radical protesters and police affecting tourist, commercial and residential districts.

The tourism sector has suffered setbacks, with visitor arrivals down 56 per cent in November year on year, to 2.65 million – the biggest drop since May 2003. More than 40 regions have issued warnings or alerts to travellers planning to visit Hong Kong.

Set up in the 1970s, Ocean Park has been facing rising competition from theme parks across the border, namely Chimelong Ocean Kingdom in Hengqin, Zhuhai, which positions itself as a Monte Carlo of the East.

Ocean Park’s new HK$2.9 billion water park, known as Tai Shue Wan Water World, is expected to open this year, while completion of a Fullerton hotel and resort at the park is due in 2021.

Meanwhile, its rival, Hong Kong Disneyland Resort on Lantau Island, will give staff pay rises despite its losses.

Eligible staff would get an increment ranging from about 1.5 per cent to 4 per cent, effective on January 1. Bonuses equivalent to 0.6 to 1.6 months of base salary would also be given.

A Disneyland spokesman said the resort had taken a variety of factors into consideration with a view to “maintaining competitiveness in the labour market and high standard of service”.

In November, the resort said the economic turmoil would cost it US$135 million in income by the end of the year. In 2018, Disneyland reported a deficit of HK$54 million compared with a loss of HK$345 million in 2017.