Disney in red - but hope's building up

Hong Kong Disneyland Resort is in the red for the eighth consecutive year, although its net loss shrank 12 percent to HK$2.1 billion last year, when Covid's fifth wave hit.

And the theme park's management is confident its financial condition will improve.

Now open five days a week, the park will resume six or seven days of operation from the middle of next month, with the Hollywood Hotel - suspended during the pandemic - to reopen on July 14.

In November it will open the first-of-its-kind World of Frozen, which will recreate the Arendelle town of Elsa and Anna in the hit animated movies. It will feature two attractions: the Frozen-themed coaster and Wandering Oaken's Sliding Sleighs.

Both ticket and annual pass sales reached historic highs, with the turnout rising 22 percent to 3.4 million, mostly locals, and revenue surging 31 percent to HK$2.2 billion.

The 18-year-old theme park on Lantau Island only operated for 190 days, about half of the calendar days in the last financial year, due to nearly three-and-a-half months of mandatory closure ordered by the government, social distancing curbs and the park's five-day operation week.

The overall occupancy of the resort's hotels edged up by 3 percentage points to 24 percent, despite the flagship Disneyland Hotel being the only one operating out of three hotels throughout the pandemic.

Walt Disney Co in the United States has deferred Hong Kong Disneyland's royalty payments for the financial year 2021-22, while the company has upsized its facility for the park from HK$2.1 billion to HK$2.7 billion since last November.

The never-disclosed royalties accounted for 5 to 10 percent of revenue.

Managing director Michael Moriarty said despite the headwinds the park is seeing improvements in its results. He added: "We are focusing on returning to profitability as soon as we can. We are optimistic about summer for both our business and the travel trade." The park has no plans to increase ticket prices in the short term, Moriarty said.

He said the park is making a strong comeback as the city reopens, with a strong Easter last month and the number of mainland and Southeast Asian visitors rebounding to prepandemic levels.

Moriarty hoped local visitors, and those from the mainland and overseas, could each account for one-third of visitor numbers in the coming financial year.

"The market is recovering and we don't have a crystal ball on where the market is going or how fast it's recovering. But what I can say right now is that we're better than the market," he said.

The park has been prudent in cost management but more flights into Hong Kong are needed to further boost visitors figures so the park could resume all-year-round operation.

The park would also retain its reservation system as it was effective in managing the park's capacity, Moriarty said.

The park is still looking for 1,000 extra staff to strengthen its services. About 300 employees were hired during a job fair in the park in February, while another job fair in March targeted vacancies in the three hotels.

The park plans to hire temporary staff during the summer holiday and will hold job fairs this year.

By September 30 last year, it had 6,100 staff - 4,700 full-time and 1,400 part-time.

Meanwhile, the Tourism Board said 2.89 million visitors came to Hong Kong last month, up 18 percent year on year and equivalent to 58 percent of prepandemic numbers. Almost 80 percent, or 2.3 million visitors, were mainlanders.

"With the last weekend of the month preceding the Labor Day Golden Week, the number of mainland visitors showed a remarkable increase," it said.

"For other markets, with the Easter holidays and the end of Ramadan, visitors from Southeast Asian markets also recorded a relatively large increase."

eunice.lam@singtaonewscorp.com