The Disney magic ain’t making enough money, at least in Hong Kong.
Hong Kong Disneyland — 53 percent owned by the government — this week reported that its losses for the last financial year had doubled to HK$345 million (US$44 million), compared to HK$171 million (US$21.8 million) the year before.
The loss came despite an 8 percent increase in revenue (HK$5.1 billion, or about US$651 million) and a 3 percent increase in the number of visitors (6.2 million).
In a statement released yesterday, the park blamed the loss on depreciation linked to its expansion project and costs associated with the launch of new attractions including the Iron Man Experience and the Disney Explorers Lodge, a 750-room hotel.
It marks the third consecutive year in the red for the park, which hiked its ticket prices in December.
The statement, though, noted that earnings before interest, taxes, depreciation and amortization were HK$914 million (US$116 million), 28 percent higher than the prior year.
Hongkongers made up 41 percent of visitors during the 2017 fiscal year, with mainland and international guests accounting for 34 percent and 25 percent, respectively.
The park has faced tough competition after the 2016 opening of Disneyland in Shanghai, which recorded 11 million visitors in its first 12 months of operation and began turning a profit last year, EJ Insight reported.
Work is currently underway on a HK$10.9 billion (US$1.3 billion) overhaul, nearly HK$6 billion (US$766 million) of which was pledged by the HK government.
The project will see new themed areas and attractions added every year for the next six years.
As you might expect, Hong Kong Disneyland managing director Samuel Lau said was he positive about the future.
The upgrades, he said, would help make the resort “an even more attractive destination, drawing new and repeat visitors from across Asia.”
Though Disneyland Hong Kong might have faced a tough few years, Disney’s theme parks across the world are helping the company through a “tough stretch” as its TV earnings retreat, Bloomberg reports.
According to the outlet, new attractions and increased attendance at Disney’s theme parks in the US — where ticket prices were recently hiked — helped the entertainment giant deliver better than expected first quarter results this fiscal year, with revenue of US$15.35 billion.
The conglomerate’s theme parks — its second-largest division — brought in US$18.4 billion in revenue and US$3.8 billion in operating income during the 2017 ending in September, Reuters reported.