HK’s theme-park operators raise eyebrows with fee hikes
Moves by Hong Kong’s two prime tourist draws — Ocean Park and Hong Kong Disneyland — to raise their admission fees at a time when the city is still struggling to lift itself out of a prolonged economic quagmire have caused a stir in industry circles.
Experts have questioned the wisdom of the moves — apparently aimed at funding the parks’ ambitious expansion programs and helping propel the thrust toward a more locally oriented clientele base as overseas visitors shrink — saying that the multiple threats from an unabated slowdown on the Chinese mainland, a sliding yuan and the deep resolve of key mainland players in the entertainment business to take on the world are real.
Adult visitors to Ocean Park will have to dish out HK$438 each — up almost 14 percent — to go through the turnstile from Jan 1, but local residents will be exempt until March 1, while prices for the “Smart Fun” annual passes will remain unchanged.
Hong Kong Disne yland had already jacked up its oneday adult admission price by 9.3 percent from HK$539 to HK$589 from Dec 16 — the fourth consecutive year it has raised admission fees. The price of a platinum annual pass remains unchanged, while those for the gold and silver annual passes have gone up by 9.3 percent and 12 percent, respectively. Local residents can also enjoy a threemonth grace period.
“Both theme parks are trying to lure Hong Kong families with favorable prices for annual passes in a bid to raise local attendance,” said Dennis Wong Ka-wing, senior lecturer at the department of hotel, services and tourism studies at the Hong Kong Institute of Vocational Education.
Therefore, it’s inevitable for them to hike ticket prices, taking into account their high operating costs and expansion plans, he said, believing that focusing on local consumers is the right thing to do rather than relying on mainland customers, as the city’s allure as a premier tourist venue may have faded.
Visitors from the mainland and other countries and regions took up some 60 percent of total admissions at Ocean Park this year, while at Hong Kong Disneyland, mainland visitors accounted for 41 percent of the total number of visitors last year, against 48 percent in 2014, according to the latest statis- tics from the two parks.
Lam Chi-ting, general secretary of the Federation of Hong Kong Trade Unions in Tourism, had reservations about the prices increases, noting that the theme parks have been forced to make such a move to cash in on the upcoming festive season. If they don’t, he said, it’ll be even harder for them to raise fees during the low season.
“But, I’m not optimistic about the parks’ performance during the coming holiday period because I believe the price hikes will further deter mainland customers. Tourists will think that if it’s not worth it, they won’t come here,” Lam told China Daily.
Wong, however, took a softer approach, arguing that the higher admission fees at Ocean Park and Hong Kong Disneyland are still lower than those of their peers in the region, and that holidaymakers would not mind spending more.
“The price increases will not hit the parks’ competitiveness. Travelers who’ve chosen to come to Hong Kong for the holidays may not be that sensitive to the price range. Besides, it’s usually more expensive to travel during the holiday season,” he said.
For the fiscal year ended June 30, 2016, Ocean Park posted a HK$241 million deficit — its worst performance in nearly three decades. The park attributed the loss to an 18.8-percent drop in visitor numbers to 6 million, dragged down by a dwindling mainland visitor pool. The deficit stood in contrast to a HK$45.2million surplus for the park in the previous fiscal year.
“The 2015-2016 fiscal year has been truly challenging, not just for Ocean Park, but for the local tourism and retail sectors at large,” said Chairman Leo Kung Lin-cheng, adding there’s little chance of a quick turnaround as the mainland’s economic downturn continues, coupled with a depreciating renminbi and stiff competition from other parks in the region.
Hong Kong Disneyland has fared no better, seeing slipping attendance at the attraction. According to the latest report from Walt Disney Co, the operating income of Disney’s parks and resorts sector grew 9 percent for the year ended Oct 1, driven by domestic operations in the US, but partially offset by “decreased attendance at Hong Kong Disneyland Resort”.
Although its 2016 annual results are still unavailable, Hong Kong Disneyland swung to a loss of HK$148 million in the 2015 fiscal year as mainland visitors stayed away.
Battling hard against the tide, both Ocean Park and Hong Kong Disneyland are on the offensive, with bold expansion plans to win back the hearts of their fans.
Ocean Park is forking out more than HK$10 million on Christmas attractions, including a major stage spectacle. In addition, two five-star hotels, plus an all-weather watertheme park, are scheduled to go into service in the next three years, with the aim of turning the park into a world-class resort.
Hong Kong Disneyland is using $1.4 billion to expand the resort from 2018 to 2030, partially funded by the Hong Kong government, with dazzling features that will include the first Frozen- and Marvel comics-themed attractions. It will increase the number of themed areas from seven to nine, while the total number of attractions will go up from some 110 to more than 130.
“Hong Kong tourism is going through an adjustment,” Secretary for Commerce and Economic Development Gregory So Kam-leung said earlier this month. He called the million
Both (Ocean Park and Hong Kong Disneyland) are trying to lure Hong Kong families with favorable prices for annual passes in a bid to raise local attendance.” operating loss for Ocean Park during the fiscal year ended June 30, 2016
net loss for Hong Kong Disneyland during the 2015 fiscal year
expansion program a strategic development to get tourists to stay overnight and spend more.
Hong Kong’s theme parks could also extract insights from their mainland counterparts. For example, Haichang Ocean Park — the mainland’s largest operator of marine life parks — is launching a new “asset light” business model based on three main business lines — management output, interactive technological children’s entertainment and cultural intellectual properties — with an estimated gross profit margin of 70 percent.
According to the Hong Kong Tourism Board, the total number of visitors to the city slumped 5.7 percent in the first 10 months of this year, while the number of mainland visitors plunged 8.7 percent.
Ocean Park and Hong Kong Disneyland — the city’s two premier tourist attractions — have resorted to raising entrance fees in the hope of helping to fund their expansion programs and putting a halt to shrinking profitability. Industry experts have poured cold water on the moves, projecting a rather poor show for both theme parks during the upcoming holiday season.
Visitors from the Chinese mainland and other countries and regions took up some 60 percent of total admissions at Ocean Park this year, while at Hong Kong Disneyland, mainland visitors accounted for 41 percent of the total number of visitors last year, against 48 percent in 2014.
Dennis Wong Ka-wing, senior lecturer at the department of hotel, services and tourism studies at the Hong Kong Institute of Vocational Education