HONG KONG - As Walt Disney readies to open its first Disneyland resort in mainland China by mid-year, its decade-old theme park in Hong Kong has tumbled back into a loss, portending challenges ahead amid the country's slowing economic growth, Bloomberg reported.
Hong Kong Disneyland recorded a loss of HK$148 million (S$27 million) in the year ending early October 2015, the first loss in four years after fewer Chinese tourists visited the city. The resort suffered seven years of losses since its 2005 opening, before turning its first profit in 2012.
The former British colony has already seen retail sales slump as fewer mainland Chinese tourists visit, hurt by a combination of China's slowdown, political unrest, and a weak yuan relative to the Hong Kong dollar that has dulled the city's attractiveness.
With Disney's Shanghai park set to open June 16, more Chinese could be lured away.
Mainland Chinese customers helped boost Hong Kong Disneyland to a record profit of HK$322 million in fiscal year 2014. Last year, they formed the biggest group of visitors to Hong Kong Disneyland accounting for 41 per cent, the resort said in a statement Monday (Feb 18), followed by locals at 39 per cent and international customers at 20 per cent.
It will be contending with a sister resort in Shanghai that's three times larger in size, and with ticket prices that are 20 per cent cheaper. Disney Chief Executive Officer Robert Iger has called the Shanghai resort the Burbank, California-based company's greatest opportunity since Walt Disney himself bought land in Central Florida in the 1960s.
In response, the Hong Kong park has pledged more investments, including a new themed area based on the hero character Iron Man to be opened later this year as well as a new resort hotel, a 750-room Disney Explorers Lodge.
A ride based on Hollywood blockbuster Star Wars: The Force Awakens will also be introduced this year, Disney said.
Hong Kong Disneyland is a joint venture with the city's government owning 53 per cent and Disney with 47 per cent. Disney's Chinese partner, state-owned Shanghai Shendi Group, will own 57 per cent of its new resort in mainland China.
Meanwhile, the operators of Tokyo's Disney themed-parks have sounded a confident note, announcing earlier this month that it would hike admission prices in order to obtain funding for investment of its parks, Japan's Nikkei newspaper reported.
The price hike, which will kick in from April 1 this year, makes it the third year running that operator Oriental Land has revised prices upwards, according to Japan's Nikkei newspaper. The hike comes as the operator is betting on projections of a steady flow of visitors to its parks.
Under the price hikes, adults will now pay 7,400 yen (S$91) for a single-day ticket, an increase of 500 yen (S$6), the paper reported. Prices will rise to 6,400 yen, or 400 yen more, for those aged 12 to 17, and by 300 yen to 4,800 yen for children aged 4 to 11. Group rates and prices for annual passes will also go up.
A company official at the Oriental Land said it estimates that the latest price hike would not reduce visitors' attendance.
According to the Nikkei, Oriental Land also estimates the number of visitors to slip by 3 per cent for the fiscal year through March, although the decline was largely due to an extraordinary jump in attendance in the previous two years as a result of the park's special events such as the 30th anniversary of Tokyo Disneyland's opening and the launch of large attractions.