Hong Kong Disneyland Theme Park Reduces Losses, Awaits ‘Frozen’ Land

Hong Kong Disneyland Theme Park Reduces Losses, Awaits ‘Frozen’ Land

The Hong Kong Disneyland theme park managed a 22% increase in visitor numbers in its most recent financial year allowing it to modestly reduce its annual losses.

The park, which is jointly owned by the Hong Kong government and Walt Disney, with the government holding a narrow majority, reports a financial year to the end of September – and does so more than seven months in arrears. It has been loss-making for the past eight financial years and has made profits in only three years since its opening in 2005.

The 2021-2022 financial year was again complicated by the city’s strict anti-COVID restrictions. It was fully closed for three and a half months (longer than the previous financial year) and operated under other social distancing and pandemic measures. Additionally, inbound tourism was heavily curtailed, especially from mainland China. That meant that during the reporting period, the park and hotels were largely visited by locals only.

HKDL posted total attendance of 3.4 million. Revenue for the year grew by 31% to HK$2.2 billion ($282 million). Earnings before interest, taxes, depreciation and amortisation (“EBITDA”) improved by 11%, to negative HK$861 million. Net loss narrowed to HK$2.1 billion, which represented a 12% improvement compared to the previous year.

Disney has deferred its royalty payments for the 2022 financial year and increased its loans to the facility from HK$2.1 billion to HK$2.7 billion since November 2022. The EBITDA losses also mean that Disney cannot levy a management fee. The base management fee is set at 6.5% of EBITDA with a variable management fee of zero to 8% of EBITDA.

“Thanks to the staunch support of our shareholders, cast members (staff) and the people of Hong Kong, strong brand appeal, exciting guest offerings and effective business strategies, we have seen improvements across the board despite headwinds from the prolonged pandemic,” said Michael Moriarty MD at Hong Kong Disneyland Resort.

“The reimagined Castle of Magical Dreams and night-time spectacular ‘Momentous’ have been game changers. Additionally, the world’s first and biggest Frozen themed land, which will be launched later this year, will be a defining addition to our world-class attractions that help us win over locals and tourists alike.”

Upcoming developments are expected to include: a return to six- or seven-day a week operations from mid-June; the reopening of the Disney’s Hollywood Hotel; the Walt Disney and Mickey Mouse statue – “Dream Makers” set for October 2023; and in November, the “World of Frozen” will make its debut.

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