January 19, 2010 / 6:37 AM / 10 years ago

Hong Kong Disneyland lifts lid on string of financial losses

HONG KONG, Jan 19 (Reuters) - Disney’s troubled Hong Kong Disneyland theme park made a net loss of HK$1.315 billion last year while attracting 4.6 million visitors, in its first major admission of its financial performance since opening in 2005.

Since opening to great fanfare in 2005, Disney’s first magic kingdom in China has struggled to attract the expected flood of visitors from mainland China, although its performance was difficult to gauge given Disney’s initial refusal to fully disclose key results and attendance figures.

In a legislative paper by Hong Kong’s Tourism Commission to local lawmakers, however, it said Hong Kong Disneyland made a net loss of HK$1.315 billion ($169.4 million) in 2009, partly because of the “unfavourable impact” of the H1N1 swine flu outbreak.

The paper added that the park made a net loss of HK$1.574 billion in 2008.

“We would like to point out that HKD is a long-term asset that grows over time and it is still in its early years of development,” the paper said while noting the park’s continued cost containment efforts.

The paper added that Hong Kong Disneyland had brought Hong Kong well over HK$30 billion of economic benefit over the past four years.

The park’s attendance in 2009 was 4.6 million, 2 percent more than 2008, generating revenues of HK$2.541 billion.

The theme park, Disney’s smallest, is now undergoing a $468 million expansion aimed at bolstering its competitiveness with a rival Disneyland that is scheduled to open in Shanghai.

As part of the expansion deal, partly financed by the Hong Kong government, Disney pledged to boost the transparency of its operations by releasing annual operating and financial results.

With attendance falling short of targets, the government has been seeking ways to boost the number of visitors in the long term, given the threat from a rival Disney theme park planned for Shanghai in the next five or six years.

Reporting by James Pomfret; editing by Ken Wills

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