Disneyland pins hopes on a busy summer to push it into profit
Hong Kong Disneyland is banking on a busy summer to take it into profit after many visitors stayed away last year because of fears of human swine flu, managing director Andrew Kam Min-ho said.
Merchandise sales have improved, while spending on food has been stable at the theme park, which celebrates its fifth anniversary in September, he said in Shanghai.
But uncertainty about the impact of the World Expo in Shanghai on the number of visitors to Hong Kong during the peak summer period remains a key concern, park insiders say.
Last year Disneyland was profitable until near the end of its financial period, at which point many suppliers were paid, the insiders said. Overall for the year, Ebitda - or earnings before interest, taxes, depreciation, and amortisation - saw a loss of HK$70 million. There are hopes of breaking even or profit this year.
Positive Ebitda is needed for Disney in the United States to earn its management fee from the park, at 6.5 per cent of Ebitda. Its financial year runs from October to September.
The need to rebuild park finances means shifting marketing strategies from one-off promotions to doing more long-term community outreach. Design staff at US-based Walt Disney Imagineering, for example, have expressed interest in helping design an interactive youth centre at the Hong Kong branch of the Savannah College of Art and Design, Kam said. Disney staff will volunteer their time for free. Kam was coy about the theme park's fifth anniversary plans but said a temporary attraction or structure would be erected.
Toy Story Land would be completed late next year or early 2012, Kam said, then new attractions yearly. This attraction, Grizzly Gulch and Mystic Point would increase the park's size by about five hectares to 27.5 hectares. Seven or eight hectares had also been set aside for more attractions, the insiders said.
The expansion will increase the number of people the park can accommodate at any one time from the current 37,000. By size alone, the five-hectare increase would raise capacity to almost 50,000. With the expansion, Disneyland hopes it will go from being a park that people can visit in a day to a "1.5-day park", they said.
Land is available for up to three more hotels. Depending on demand, one or two more hotels, or about 1,000 rooms, can fit between the Disneyland and Hollywood hotels, and one by the park's pier.