Tourists watch Disney on Parade at Hong Kong Disneyland. The government is disappointed with Disneyland's financial performance in 2009. Bloomberg News

Theme park needs to control costs and increase efficiencies: Lau

HONG KONG: The government has openly expressed dissatisfaction with the bottom line of the operations of Hong Kong Disneyland, which is showing an HK$70 million loss before interest, taxes, depreciation and amortization. The net lost, after interest and taxes in 2009 was HK$1.315 billion.

The theme park revealed its financial results yesterday, for the first time since it opened in 2005.

Over 4.6 million people visited Hong Kong Disneyland last year. That's an increase of 2 percent over the previous year. The loss recorded was 57 per cent lower than the loss recorded a year earlier.

However, the government, the theme park's largest shareholder, said it still was not satisfied with the results, despite the improved performance.

Per capita expenditures dropped by 1 percent against the previous year.

Secretary for Commerce and Economic Development Rita Lau said the financial result is not as good as expected. She said the government is not satisfied and she would reflect the government's concern to the board of Hong Kong Disneyland and urge it to do better in cost control and to raise its operational efficiency.

From its opening, until December 2009, Hong Kong Disneyland received a total of 19 million visitors, said Bill Ernest, Walt Disney's Asia Pacific President and Managing Director. In spite of the global financial crisis and swine flu scare, the number of visitors increased from 4.5 million to 4.6 million.

In terms of origin, local visitors accounted for 41 percent, while 36 percent came from the mainland and the rest were international visitors.

From October 2008 to May 2009, it even recorded double-digit visitor growth until the H1N1 swine flu broke out, Ernest said.

With the expansion project underway, the area of the park will increase by 23 percent after completion in 2014.

Hong Kong Disneyland Managing Director Andrew Kam noted most of the park's customer sources, such as Taiwan, Singapore, Malaysia and Australia, were affected by the financial crisis.

Summer is high season for Disneyland, but park attendance was seriously hit by the swine flu during the seven months from May to December last year.

Disneyland officials vowed to do better to attract more visitors but declined to disclose the visitor growth forecast for the next few years.

Raymond So, an associate professor at the Chinese University's Faculty of Business Administration, said the attendance figure was acceptable, given the impact of the financial crisis and swine flu, adding that Hong Kong Disneyland needs to enhance its competitiveness in the face of competition from Singapore and Shanghai.

He also noted Disneyland managed to reduce its loss as a result of an interest rate reduction. If the interest rate rises again, the park will be subject to great pressure.

Legislative Councillor Fred Li said the average number of visitors per year was far below the 5.5 million projected during the planning stage of the theme park.

He said he was concerned with the decrease in international visitors by about 10 percent. He said that the park needs to attract more foreign tourists, acknowledging that those visitors also spend on airfares, hotels, shopping and dining in Hong Kong.

In the past, Hong Kong Disneyland has refused to disclose attendance figures and financial results. The theme park operators were compelled to disclose the figures last year by the Hong Kong government as part of the terms and conditions of the government's injection into the expansion project.

(HK Edition 01/20/2010 page4)