Expansion deal reached on Hong Kong Disneyland-report

[keithlee83]

Wed Jun 24, 2009 11:37pm EDT Email | Print | Share| Reprints | Single Page[-] Text [+]

HONG KONG, June 25 (Reuters) - Hong Kong has reached a deal with the Walt Disney Co (DIS.N) to expand the local Disney theme park, seen as necessary to bolster the park's long-term prospects against a Shanghai rival, a newspaper reported on Thursday.

The agreement is expected to be announced by June 30, with details of the deal to be laid out to local legislators in a special meeting, the Hong Kong Economic Times reported.

A spokeswoman for the Commerce and Economic Development Bureau, which oversees the Disneyland project, confirmed to Reuters that a special meeting had been called, but disclosed no specifics.

The report said the deal was expected to be worth HK$7 billion ($903.3 million) of which HK$4 billion would be used for expansion.

The size of Hong Kong Disneyland, the smallest of Disney's magic kingdoms, is expected to almost double, with construction to begin within a year, pending approval from the city's legislative council in July, the newspaper reported.

Hong Kong's Financial Secretary John Tsang travelled to Los Angeles in May, where he met senior Disney executives. The trip is seen to have paved the way for the breakthrough after Disney earlier said it would stall any expansion amid the credit crunch.

There was no immediate response from Tsang's office.

When contacted by Reuters, a Disney official in the United States said discussions are ongoing, without giving any specifics.

The Walt Disney Co (DIS.N) earlier indicated it would likely invest more capital in Hong Kong Disneyland and allow the Hong Kong government to convert its loans to equity to maintain its majority share of the theme park, a source involved in their talks told Reuters earlier.

The Hong Kong government, which owns 57 percent of the underperforming resort, desperately needs the expansion to boost flagging attendance, with a much larger rival Disneyland expected to be built in Shanghai in 2014 that could draw much visitor traffic from the burgeoning mainland China market.

"At this stage, we have to support the expansion otherwise it will be very difficult to compete with Shanghai in five to six years time," said legislator Fred Li of the Democratic Party, who said his party backed the expansion as long as Disney boosted its financial transparency in future on attendance figures. (Additional reporting by Gina Keating in Los Angeles) (Reporting by James Pomfret; Editing by Chris Lewis and Muralikumar Anantharaman)

[iluvHKDL]

Oh my gosh!!!!! It was totally unexpected.

[TimmyTimmyTimmy]

Originally Posted by keithlee83

Wed Jun 24, 2009 11:37pm EDT Email | Print | Share| Reprints | Single Page[-] Text [+]

HONG KONG, June 25 (Reuters) - Hong Kong has reached a deal with the Walt Disney Co (DIS.N) to expand the local Disney theme park, seen as necessary to bolster the park's long-term prospects against a Shanghai rival, a newspaper reported on Thursday.

The agreement is expected to be announced by June 30, with details of the deal to be laid out to local legislators in a special meeting, the Hong Kong Economic Times reported.

A spokeswoman for the Commerce and Economic Development Bureau, which oversees the Disneyland project, confirmed to Reuters that a special meeting had been called, but disclosed no specifics.

The report said the deal was expected to be worth HK$7 billion ($903.3 million) of which HK$4 billion would be used for expansion.

The size of Hong Kong Disneyland, the smallest of Disney's magic kingdoms, is expected to almost double, with construction to begin within a year, pending approval from the city's legislative council in July, the newspaper reported.

Hong Kong's Financial Secretary John Tsang travelled to Los Angeles in May, where he met senior Disney executives. The trip is seen to have paved the way for the breakthrough after Disney earlier said it would stall any expansion amid the credit crunch.

There was no immediate response from Tsang's office.

When contacted by Reuters, a Disney official in the United States said discussions are ongoing, without giving any specifics.

The Walt Disney Co (DIS.N) earlier indicated it would likely invest more capital in Hong Kong Disneyland and allow the Hong Kong government to convert its loans to equity to maintain its majority share of the theme park, a source involved in their talks told Reuters earlier.

The Hong Kong government, which owns 57 percent of the underperforming resort, desperately needs the expansion to boost flagging attendance, with a much larger rival Disneyland expected to be built in Shanghai in 2014 that could draw much visitor traffic from the burgeoning mainland China market.

"At this stage, we have to support the expansion otherwise it will be very difficult to compete with Shanghai in five to six years time," said legislator Fred Li of the Democratic Party, who said his party backed the expansion as long as Disney boosted its financial transparency in future on attendance figures. (Additional reporting by Gina Keating in Los Angeles) (Reporting by James Pomfret; Editing by Chris Lewis and Muralikumar Anantharaman)

That is what many would call damage control. This sounds like a buisiness that is struggling and not like a succesful themepark that has to expand to fit the hords of visitors that keep increasing.
Let´s hope they use the space that is left to build on wisely and push in as many unique rides as possible. No Disneyland deserves to get the treatment that HDKL has got.

[dland_lover]

WAAAAAAHHHHOOOOOOOOOOOOOOO!!!!!!!!!!!!!!!!

[Uncle Bob]

I'm glad to hear they're going forward with this. Good news.

[SleeplessInSG]

Looking forward to the good news!

[hkdl]

It was totally unexpected. I hope so they will push through it.

[tasman]

I'm curious what is meant when they say that "the deal is worth $7 billion HKDL, of which $4 billion HKDL will be used for expansion." Does that mean that the remaining $3 billion HKDL will be used for other aspects of the resort, or something else? $4 billion HKDL is roughly $ 516 million USD...which is still small compared, for example, to the $1.2 billion USD being expended on DCA's phase 1 + TSMM (which is the kind of investment that both HKDL and WDS Paris sorely need). But got to start somewhere I guess...

[Dustysage]

the deal is worth $7 billion HKDL, of which $4 billion HKDL will be used for expansion

That would only leave about half a billion for expansion. Disney is spending over a billion dollars on the expansion of California Adventure and we are really just getting Carsland, Mermaid, and World of Color, and a bunch of retheming. With $500 million (US) in Hong Kong they could build a few eTickets at most.

Perhaps Disney is planning to put some money of their own into this project. But this might not be the great news that it appears to be at first blush.

Still, any growth at HKDL is better than what they've got now!

[k_peek_2000]

Originally Posted by Dustysage

That would only leave about half a billion for expansion. Disney is spending over a billion dollars on the expansion of California Adventure and we are really just getting Carsland, Mermaid, and World of Color, and a bunch of retheming. With $500 million (US) in Hong Kong they could build a few eTickets at most.

Perhaps Disney is planning to put some money of their own into this project. But this might not be the great news that it appears to be at first blush.

Still, any growth at HKDL is better than what they've got now!

Actually WOC is a separate budget, you guys are forgetting that. HOWEVER, The new viewing area is in the 1.2b.

[tloolgb]

Originally Posted by Dustysage

That would only leave about half a billion for expansion. Disney is spending over a billion dollars on the expansion of California Adventure and we are really just getting Carsland, Mermaid, and World of Color, and a bunch of retheming. With $500 million (US) in Hong Kong they could build a few eTickets at most.

Perhaps Disney is planning to put some money of their own into this project. But this might not be the great news that it appears to be at first blush.

Still, any growth at HKDL is better than what they've got now!

Yeah but think about it...they can still do something with that money. I mean it was $600 million to build WDS in Paris...not a great park but when you are not spending the money on park infastructure you should be able to build a good amount. One can only hope this is like DLP's first big expansion...home to a wide range of attractions, Cs, Ds and Es not just a few E-Tickets.

DCA might be getting a billion to expand, but it had less than that when it was built. And if whole parks can be done half-assed for that money, who says a few new rides can't be done all the way for the same amount?

[yoyoflamingo]

And if some of the attractions aren't e-tickets, then the money can be used even more wisely. Peter Pan, Snow White, etc. are all additions that could be added, in addition to a few larger scale like HM, that could help the park immensely.

I'm excited about the announcement to hear what their plan is.

[vfire]

It's just a PR release, and until there are shovels in the ground with hardhats laying the foundation, I won't believe the expansion is happening.

Besides the obvious e-tix like PotC and HH, the park desperately needs at least a couple traditional dark rides like Snow White and Pan.

[Baloo]

Originally Posted by Dustysage

That would only leave about half a billion for expansion. Disney is spending over a billion dollars on the expansion of California Adventure and we are really just getting Carsland, Mermaid, and World of Color, and a bunch of retheming. With $500 million (US) in Hong Kong they could build a few eTickets at most.

Perhaps Disney is planning to put some money of their own into this project. But this might not be the great news that it appears to be at first blush.

Still, any growth at HKDL is better than what they've got now!

Don't forget that the money being invested at DCA also includes quite a bit of demolition and infrustructure changes. The work being done and mentioned above has not reached the 1.2 billion budget yet.


The 500 million expansion budget for Hong Kong Disneyland will be well spent since they have an open canvas to start with with no need to spend money on demolition and major infrustructure changes. The cost of construction is also much cheaper in Hong Kong then California

[TimmyTimmyTimmy]

Since it is cheaper to build in Hong Kong and in China the next projects could be as elaborate as TDS. Since HKDL is small they should try to outshine the other parks by looks and not just build the after the standard.