Still losing money, Disneyland has the best year ever in 2010

Updated: 2011-01-19 07:17

By Joseph Li(HK Edition)

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Still losing money, Disneyland has the best year ever in 2010

The park eyes more visitors as three new themed areas will be finished by mid-2014

Hong Kong Disneyland reported a record high gross revenue and a significant increase of attendance last year, though the theme park established in 2005 said it continues to lose money.

It registered a profit of over HK$221 million before interest, taxes, depreciation and amortization in the fiscal year ended in Oct 2, 2010.

However, after taking into account depreciation and interest for government loans for the expansion now underway, a net loss of HK$718 million was reported by the theme park, a joint venture between the Walt Disney Co and Hong Kong government, which holds a majority stake.

The loss was narrowed by 45 percent in 2010, compared with HK$1.3 billion in the year before.

Given the economic growth trend and the anticipation of new facilities in the years to come, management says it is confident that it can attract more visitors and turn the current red ink into profits.

The government is pleased with the park's performance.

"I am happy to see Disneyland has received an improving report card today," Secretary for Commerce and Economic Development Rita Lau said.

"But there is no room for self-complacency, as it should strive to perform better through internal control measures and enhancement of its attractiveness," she said.

Hong Kong Disneyland announced its 2010 business results Tuesday. The theme park did not disclose figures on its performance or visitor attendance until 2009.

By Oct 2, 2010, visitor attendance had reached 5.2 million, a 13-percent increase over the previous year. Hotel occupancy at the site rose by 12 percent to 82 percent, said Andrew Kam, managing director of Hong Kong Disneyland.

During the same period, the gross earnings before interest, tax, depreciation and amortization were HK$221 million, compared with a loss of HK$70 million in the previous year.

With two-thirds of visitors coming from overseas, including the Chinese mainland and Southeast Asia, per capita guest spending rose by 7 percent.

Kam explained the growth was driven by attendance, the hotel, catering and the sale of souvenirs.

He said he was pleased with the results although there were no new attractions in 2010.

"In view of economic growth and new facilities in the coming years, we expect to achieve bigger visitor growth, revenue and net profits fairly soon," he said.

Three new themed areas - Grizzly Gulch, Mystic Point and Toy Story Land - are expected to be completed in phases by mid-2014 in the world's smallest Disneyland park.

Among them, Toy Story Land will be operational by the end of 2011.

Though Singapore has opened the Universal Studio and casino, Kam said the Singapore operation has had little impact on Hong Kong, while Shanghai Disneyland will take years to complete.

Michael Wu, chairman of Hong Kong Travel Industry Council, said Hong Kong Disneyland has come through the most difficult early years that every theme park endures.

If the economic growth trend continues, he predicted the new facilities would attract far more visitors.

A strong renminbi will prompt more mainland visitors from other provinces via Shenzhen to come to Hong Kong following the relaxation of rules recently.

China Daily

(HK Edition 01/19/2011 page1)