Numbers sow fear park's taking the mickey

Editorial | 26 Feb 2018

Latest official figures show Hong Kong tourism has been on a steady recovery course, with more than 58 million travelers coming here last year.

And the Tourism Board is predicting more - some 60 million in total - will visit this year. If this materializes, it would represent a modest 3.6 percent growth, but higher than the 3.2 percent reported for 2017.

That's certainly good news, showing the Fragrant Harbor is once again emitting the right scent.

The recent rise was primarily made possible by sustained growth in mainland visitors. The Year of the Dog saw an impressive start, as 1.06 million of them ventured south during the Lunar New Year gold week.

That's 130,000 visitors, or 14 percent, more than that of the same period in 2017.

Local retailers have every reason to uncork the champagne - or least sparkling wine.

However, we also have to digest the distressing news from both our two flagship theme parks, as Ocean Park and Disneyland reported losses for the second and third consecutive year, respectively. The deficit sustained by our "pride" in Sunny Bay even disappointingly doubled to an alarming HK$345 million.

Could that be possible in light of the steady recovery in general? Had the parks been wholly privately owned, shareholders would be howling for some management heads to roll.

Meanwhile, Hong Kong Disneyland has apparently offered some "sound" reasons for the red ink. But does Walt Disney, the park's manager, know people are asking how much the SAR government - the majority owner - has gained from the theme park since its opening in 2005? Does Disney know more and more people are calling it a bad deal so many years later?

I wish the critics were wrong. But the only way to prove them wrong is to show that the park is profitable - not only before tax, but also after all costs are considered. For a normal shareholder, the only meaningful figures are the net earnings.

Disneyland's managing director, Samuel Lau Wing-kee, attributed the widened losses to depreciation and amortization. He was probably correct because that's the standard accounting practice. However, the problem is the operator hasn't been transparent enough to convince an increasingly skeptical public.

Indeed, earnings before interest, tax, depreciation and amortization were a robust HK$914 million - 28 percent higher than the year before. The distressing 2017 results appeared to be natural after all costs were considered. But some crucial information seems to be missing, if the results are to be understood better.

Is it possible to release further details of the management fees charged by Walt Disney, the co-owner of what's known as the world's smallest Disneyland?

Until greater transparency is given to the management charges, I fear people will continue to view the results with distrust.

As far as SAR taxpayers are concerned, it's just too bad that when the Lantau theme park appears to be making money with increasing visitors, they don't get a fair share of the pie - while Walt Disney gets to stuff its already deep pockets.

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