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Hong Kong Disneyland losses double in 2017

Hong Kong Disneyland HKDL. Fiscal. Losses. Double.

Hong Kong Disneyland saw its losses double in 2017 to HK$345m ($44.1m) despite increases in attendance and revenues.

For the fiscal year that ended on 30 September 2017, Hong Kong Disneyland (HKDL) generated revenues of HK$5.1bn ($652m), an 8% increase on the previous year. Earnings before interest, taxes, depreciation and amortisation (EBITDA) were HK$914m ($117m), a 28% increase.

The increase in revenues was powered by a 3% increase in attendance. The park welcomed 6.2 million guests in 2017, including 1.6 million international guests, which is a 5% rise.

Hong Kong locals made up 41% of total attendance while mainland and international guests accounted for 34% and 25%, respectively.

However, despite the increases in attendance and revenues, the Lantau Island theme park posted a net loss of $44.1m, more than double the $21.8m loss it recorded in 2016. HKDL attributes the increased deficit to rise in costs associated with the launch of the Iron Man Experience and Disney Explorers Lodge in fiscal year 2017.

In December, the park increased ticket prices by between 4% and 9%. Adults now pay HK$619 and children HK$458. The changes were the fifth consecutive annual increases.

Samuel Lau, managing director of HKDL, said: “The launch of Iron Man Experience and Disney Explorers Lodge in fiscal year 2017 have taken the resort experience to a new level, strengthening our appeal as a resort destination for families and young adults.

“Together with the roll-out of our newest expansion plans, our investments in the guest experience are set to make the resort an even more attractive destination, drawing new and repeat visitors from across Asia.”

The second Disney park in China, Shanghai Disney Resort, opened in 2016 and received 11 million visitors in its first year. The Hong Kong park was also outperformed by its local rival, Ocean Park, which reported a smaller deficit of HK$234m ($30m) in 2017, an improvement on its performance in 2016 when posted a HK$241.1m ($31m) loss.

Last October, Hong Kong Disneyland kicked off construction of the multi-year transformation of the park. It is adding a Marvel-themed area that will feature attractions based on the Avengers and S.H.I.E.L.D as well as a Frozen-themed area that will include characters and stories from the film.

Taxpayers will fund $700m of the $1.4bn expansion with Disney covering the rest. The Hong Kong government is the controlling shareholder in HKDL with a 53% stake, the other 47% is owned by Disney.

The new areas are expected to open in 2023.

Image: c. Hong Kong Disneyland.

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