Hong Kong Disneyland posts widening yearly loss
It loses $22 million as attendance drops 11% and revenue falls 7% amid sag in tourism.
Two weeks after Walt Disney Co. launched a bailout of struggling Euro Disney, another international Disney resort revealed that its financial woes grew last year.
Hong Kong Disneyland reported a second consecutive annual loss on an 11% drop in attendance and a 7% decline in revenue. The $22million loss for the fiscal year ended Oct. 1 compared with a $19-million loss in fiscal 2015.
The company attributed the slump to a softening tourism market and an unfavorable comparison to the previous fiscal year, which was a week longer.
Park attendance fell to 6.1 million in the most recent fiscal year. In fiscal 2014, Hong Kong Disneyland’s last profitable year, the park set an attendance record of 7.1 million visitors.
Although visits from international tourists increased last year, the resort reported a big decline in attendance from mainland China. The drop coincided with the opening in June of the $5.5-billion Shanghai Disney Resort, the first Disney park on mainland China.
Travelers from mainland China accounted for 36% of Hong Kong Disneyland visitors in fiscal 2016, down from 41% in fiscal 2015 and 48% in fiscal 2014.
But Disney representatives say the drop in attendance at the Hong Kong park was not a result of the opening of Shanghai Disney Resort, noting that the two resorts draw from different populations, located more than 700 miles apart.
Despite the slide in attendance and revenue, Disney is betting that recent additions at the resort will help boost visitor numbers and spending.
In June, the park added several “Star Wars” elements at Tomorrowland, including a remake of Space Mountain, now dubbed Hyperspace Mountain, featuring characters from the popular “Star Wars” franchise.
In January, the resort opened its first Marvelthemed ride, the “Iron Man Experience,” which includes a ride simulator that takes visitors on a virtual flight over Hong Kong. It also includes an exhibition hall where parkgoers can see the Iron Man suit and other gadgets developed by Stark Industries, the company owned by Iron Man’s alter ego, Tony Stark.
“The resort is committed to bringing more magical experiences to the people of Hong Kong and strengthening our offerings to enhance Hong Kong’s attractiveness as a premier tourist destination,” Samuel Lau, executive vice president and managing director of the resort, said in a statement.
Hong Kong Disneyland, which is co-owned by Disney and the government of Hong Kong, previously announced a $1.4-billion expansion of the 11-acre resort, the smallest of Disney’s dozen parks. The project is awaiting approval by Hong Kong officials.
During the first-quarter earnings conference call early this month, Walt Disney Co. Chief Financial Officer Christine M. McCarthy said that the company already is seeing “improved results” at Hong Kong Disneyland.
Troubles at Disneyland Paris caused Walt Disney Co. to begin buying out all other shareholders and announce plans to invest $1.6 billion in Euro Disney, which owns the resort that includes the Walt Disney Studios Park, seven themed hotels, two convention centers, golf courses and Disney Village, a dining, shopping and entertainment area.
The financial bailout is the second in three years for the European theme park, which has reported weak financial results and sluggish attendance amid terrorism fears in France.