Hong Kong Disneyland Narrows 2011 Loss to $30.5 Million
No profit in sight for the five-year old park, with local resentment growing.
HONG KONG – The Hong Kong Disneyland recorded a net loss of HK$237 million (US$30.5 million) on over HK$500 million in revenue for the fiscal year ending in Oct. 2011, the highest since the theme park opened its doors in 2005, but with still no profit in sight.
The company attributes the increased revenues of HK$3.63 billion, and EBITDA of HK$506 million, to a surge in park attendance, hotel occupancy, and guest spending.
Nevertheless, the theme park still recorded a net loss for 2011 – a three-fold improvement from the dismal results of a net loss of HK$718 million in 2010.
Visitors from China are the driving force behind the improved results, with 45% of total park attendees coming from there, marking an increase of 20% from 2010. Hong Kong visitors accounted for 31%.
Now in operation for five years, 31 million people have visited Hong Kong Disneyland.
In Nov. 2011, the theme park saw its first themed area in the HK$3.63 billion expansion project -- the 2009-approved Toy Story Land – completed and opened. The next two world-exclusive themed areas, Grizzly Gulch and Mystic Point, will be in service this summer and in spring 2013, respectively.
In a statement announcing the record earnings, the company justified the expansion plan, unpopular among local legislators, who likened the approval process as “being hijacked” when it was passed in 2009, by claiming it would create jobs in the fields of construction and hospitality.
The theme park and resort is a joint venture between The Walt Disney Co. and the Hong Kong government, holding 47% and 53% stakes, respectively. As cited in the initial agreement, Disney is compensated for 6.5% of EBITDA, or a total of HK$32 million. But the government currently receives no revenue due to the theme park’s continual losses.
U.S.-based Disney also maintained in its press release that the rise in revenue has “brought about HK$6.7 billion of value added to Hong Kong in fiscal year 2011, which is equivalent to around 0.4% of Hong Kong’s GDP.”
However, for all the company’s assertions of the theme park’s contribution to society, the Hong Kong government has already provided $420 million as equity and a $725 million as loan to the joint venture with the Walt Disney Co. since 1999, and has spent $1.4 billion on land reclamation fees and related community facilities.