Hong Kong Disneyland suffers first loss in five years
Hong Kong Disneyland recorded a loss of HK$148 million ($19 million) in the year ending early October 2015, the first loss in five years after fewer Chinese tourists visited the city.
Hong Kong Disneyland Resort has recorded its first annual loss since 2011 as its latest financial report shows a loss of HK$148 million (USD 19 million) for the fiscal year ending October 2015. It made a profit of HK$332 million in 2014.
Revenue also fell 6.4 percent to HK$5.11 billion, the park's first year-on-year decline in income since 2009. The resort suffered seven years of losses since its 2005 opening, before turning its first profit in 2012.
As Walt Disney Co. readies to open its first Disneyland resort in Shanghai on June 16 this year, its decade-old theme park in Hong Kong has tumbled back into a loss, portending challenges ahead amid the country’s slowing economic growth and retail sales slump as fewer mainland Chinese tourists visit.
"Tourists now have more choices," said Andrew Kam, its managing director in Hong Kong, "because many countries have relaxed their visa requirements.
"Currency rates in some countries have depreciated remarkably over the past two years and airlines are offering more international routes at competitive prices."
Hong Kong Disneyland's total attendances fell to 6.8 million in the year, a 9.3 percent fall, while the figures also revealed a dramatic 23 percent drop in numbers from the mainland, which now accounts for 41 percent of total visitors compared with a half during its peak.
Kam admitted it had been "a challenging year", but said the company had already adopted a new strategy to attract a more diverse mix of guests, particularly from Asian markets including India, Thailand, Singapore, and Indonesia.
The number of local Hong Kong visitors to the site actually set a record in 2015, accounting for 39 percent of the total, a 14 percent increase on the previous year.
In the mainland, Kam said its marketing focus will be cities and areas linked by high speed rail, after the opening of the Guangzhou-Shenzhen-Hong Kong express line in the future.
As for competition from Mainland China, the sister resort in Shanghai is three times larger in size, and with ticket prices that are 20% cheaper. Kam said the Hong Kong park is opening new features based on the blockbuster movies Star Wars and Iron Man, as well as a resort hotel this year.
Hong Kong Disneyland is a joint venture with the city’s government owning 53 percent and Disney with 47 percent. Disney’s Chinese partner, state-owned Shanghai Shendi Group, will own 57 percent of its new resort in mainland China.