There’s a lot more at stake for Hong Kong Disneyland than just declining attendance numbers. Since the opening of Shanghai Disneyland, the park has suffered a drop in visitors and a massive expansion is being planned. The expansion will include Marvel and Frozen themed lands, as well as a new stage show based on Moana.
However, that expansion will cost Hong Kong taxpayers billions.
In what is being called an “unequal deal,” the Hong Kong government will need to foot the bill for half of the cost of the HK$10 billion renovation, as it is the largest shareholder.
According to lawmaker Michael Tien puk-sun of the New People’s Party, Hong Kong Disneyland would be profitable if it wasn’t for the exorbitant fees the park has to pay The Walt Disney Company.
The New People’s Party deputy chair said the Lantau Island amusement park would not be losing money if it did not have to fork out those charges. Industry insiders described it as a good deal for Walt Disney, as the company could pocket a big portion of its parks’ revenue before profits are generated. And in loss-generating years, the company would not have to pay corporate tax to local governments – which has been the case eight of the past 11 years for Hong Kong Disneyland.
According to theme park insiders, the terms for Hong Kong’s Disneyland are similar to Disney’s agreements in other Asian countries.
Now Hong Kong lawmakers are unable to come to an agreement to continue funding the park, which might put the brakes on further development. According to the South China Morning Post, concerns have been raised over the longterm financial impact of refusing to pass the funding application.
In a desperate attempt to press for Finance Committee endorsement, commerce minister Greg So Kam-leung told lawmakers on Saturday that a risk test showed Hong Kong could lose up to HK$31.6 billion in economic benefits over 40 years if Disneyland’s visitor numbers shrank by 15 per cent. Lawmakers were unable to vote on the funding request at the end of a seven-hour debate, which included two failed motions seeking adjournment of the proceedings.
It should also be noted that Disney has kicked in an additional HK$350 million to help move things along.
On April 30, Hong Kong Disneyland will open its third hotel, based on Disney and Pixar adventure films. Clearly they anticipate an upswing in attendance at some point?
What are your thoughts? Comment below or in the forums!
[Photos: Disney Parks Blog]
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