Disneyland Hong Kong expansion within 5 years
Walt Disney Co. to invest $452 mil in the expansionHONG KONG -- Proposed expansion of Hong Kong Disneyland will include three themed areas, or "lands" with construction to be finished within five years, the Hong Kong government announced Tuesday.
Adding detail to news that emerged last week, Secretary for Commerce and Economic Development, Rita Lau said that Walt Disney Co. will invest HK$3.5 billion ($452 million) of new equity capital for the expansion. That would bring the company's total investment in the Hong Kong park to HK$6.2 billion ($800 million).
"The expansion deal will contribute to Hong Kong's appeal as an international, family-friendly tourist destination and the resort's long-term success," said Leslie Goodman, exec vp for worldwide public affairs, Walt Disney parks and resorts. "Disney is making a substantial investment in this important project, and we are eager to begin work as soon as the necessary approvals are received."
Construction is expected to begin this year. The partners will add 30 attractions and lift the total to more than 100.
"Disney has given assurance that 'Grizzly Trail' and 'Mystic Point' will be exclusive amongst Disney theme parks worldwide and 'Toy Story Land' will be exclusive within the Asian region for five years from their respective opening," the government said.
The government will convert $775 million of its existing loans to the park into equity and retain $130 million of the loan. Its equity stake in the park will drop from 57% to 52%.
Hong Kong chief executive Donald Tsang said, "It will also enhance the transparency of the park's operation." The park operators and the government have been regularly criticized for obscuring details such as visitor numbers to a publicly owned facility.
While the park has missed its attendance targets, the government said that numbers of admissions in the park's first three years since opening totaled 14 million.
Lau said that the expansion is essential if the Hong Kong park is to remain competitive with a planned Disneyland development in Shanghai. She said that the U.S. Disneyland and Disney World parks went through a number of expansions to reach their current sizes and warned that attractiveness to visitors would drop if no new developments were made in Hong Kong.
The government was keen to point out economic benefits of the park and its expansion. It said 650,000 visitors had extended their trip to Hong Kong by 0.7 days, bringing a economic gain of 0.2% to the territory, according to government economist Helen Chan. She also calculated a 5% investment return over the next 40 years.
The expansion is expected to bring over 3,000 jobs and 600 permanent positions to the territory.