Hong Kong Disneyland cuts losses, awaits ‘Frozen’ Land

In its most recent financial year, Hong Kong Disneyland theme park experienced a 22% increase in visitor numbers, allowing for a modest reduction in its annual losses. The park, jointly owned by the Hong Kong government and Walt Disney, has faced financial challenges in the past. With the government holding a narrow majority, the park reports its financial year up until the end of September, more than seven months in arrears. Since its opening in 2005, the park has been incurring losses for the majority of its existence, with profits realized in only three years.

The 2021-2022 financial year was particularly complicated due to the strict anti-COVID restrictions imposed in the city. The park remained fully closed for three and a half months, longer than the previous financial year, and had to operate under various social distancing and pandemic-related measures. Furthermore, inbound tourism was significantly curtailed, especially from mainland China. As a result, the park and its hotels primarily catered to local visitors during the reporting period.

Hong Kong Disneyland recorded a total attendance of 3.4 million in the mentioned financial year. Revenue for the year grew by 31% to HK$2.2 billion ($282 million). Earnings before interest, taxes, depreciation, and amortization (EBITDA) improved by 11% to negative HK$861 million. The net loss narrowed to HK$2.1 billion, representing a 12% improvement compared to the previous year.

To support the park during these challenging times, Disney 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 is unable to levy a management fee, which is typically based on a percentage of EBITDA.

Michael Moriarty, Managing Director at Hong Kong Disneyland Resort, expressed gratitude for the unwavering support of shareholders, cast members (staff), and the people of Hong Kong. He credited the park’s strong brand appeal, exciting guest offerings, and effective business strategies for the improvements despite the prolonged impact of the pandemic. Moriarty highlighted the success of recent additions such as the reimagined Castle of Magical Dreams and the night-time spectacular ‘Momentous.’ He also mentioned the highly anticipated launch of the world’s first and largest Frozen-themed land later in the year, which is expected to further enhance the park’s attractions and appeal to both locals and tourists.

Looking ahead, Hong Kong Disneyland has several developments planned. Operations are expected to return to six or seven days a week starting from mid-June. The reopening of Disney’s Hollywood Hotel is also on the horizon. In October 2023, the Walt Disney and Mickey Mouse statue, titled “Dream Makers,” is set to debut, followed by the highly anticipated “World of Frozen” in November.

Overall, Hong Kong Disneyland’s recent performance shows promising signs of recovery and anticipation for upcoming attractions and developments that are expected to enhance the park’s appeal and draw visitors from both local and international markets.

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