The Hong Kong government is to bail out the loss-making Ocean Park with a HK$310m ($39.6m) cash injection to lift it out of the red.
The one-off bailout was revealed in the annual budget of Financial Secretary Paul Chan Mo-po and is for the park to “develop education and tourism projects”. Ocean Park lost HK$234m ($29.9m) in the financial year ending in June 2017, following a HK$241m ($30.8m) deficit the year before.
The money is part of a broader HK$706m ($90m) package to revitalise Hong Kong’s image and lure big spending visitors. It includes a proposed e-sports hub, museum expansions and heritage preservation.
“It is vital for large-scale theme parks to make sure their attractions can continuously lure visitors,” Chan said. “We see that there is room for Ocean Park to improve in this regard.”
As part of the deal, 10,000 free tickets will be distributed to local primary and secondary students in the coming year.
Ocean Park will open its first hotel this June. The theme park’s chief executive, Matthias Li, told the South China Morning Post that he expects the Hong Kong Ocean Park Marriott Hotel to spark double-digit growth in visitor numbers and revenue.
Hong Kong Disneyland renegotiation
The cash injection for Ocean Park comes as the government considers whether to renegotiate management fees for Hong Kong Disneyland with the Walt Disney Company following the park doubling its losses in 2017.
To manage the park, Disney charges a base management fee of 6.5% of EBITDA and a variable management fee of zero to 8% of EBITDA. The company waived the variable fee for 2018 and 2019 following calls for a review from the government last year.
Hong Kong is the majority shareholder of the park with 53% while Disney holds the other Disney 47%.
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.