Disney plans major expansion of Hong Kong theme park
June 30, 2009
The $450-billion, five-year project in association with the Hong Kong government will add three new theme areas and boost the total park area by 23% in a bid to jolt sagging performance.
7:24 AM PDT, June 30, 2009
Reporting from Beijing — The Walt Disney Co. and the Hong Kong government said today that they have agreed to a major expansion of the Hong Kong Disneyland theme park, a move that would boost an attraction that has struggled to meet expectations since it was opened in 2005.
Disney will pay about $450 million for the construction and convert its outstanding loans totaling around $340 million into equity in a joint venture company, Hong Kong International Theme Parks, officials said.
The announcement comes at a time when Hong Kong Disney could soon face a major competitor in Shanghai, which is still in negotiations with the Burbank-based Disney to open a much larger $3.59-billion theme park as early as 2014.
“We, of course, would like to [start construction] as soon as possible,” said Rita Lau, Hong Kong’s secretary for Commerce and Economic Development, in a press conference.
Officials determined that the expansion was needed to keep the park economically viable, though they said Hong Kong Disney has added an average of 0.2 percentage points to the territory’s gross domestic product in its first three years.
“If there is no expansion, then I think it is quite natural to expect that the attractiveness of the theme park will fall over time,” said the government’s chief economist, Helen Chan.
Disney’s experience in Hong Kong has been checkered. It has failed to meet attendance goals, was sullied by a mob scene of angry tourists denied entry during the 2006 Lunar New Year and has been accused of being uncooperative with the local government.
This month, health officials complained that a promotion to attract more young children to the theme park interfered with emergency policies to curb the spread of the H1N1 swine flu virus.
Hong Kong’s Chief Executive Donald Tsang told reporters that the deal would “enhance the transparency of the park’s operation in [the] future” because part of the agreement required Disney to share more financial and attendance data.
The three new theme areas, called “Grizzly Trail,” “Mystic Point” and “Toy Story Land,” will give Hong Kong Disney 30 new attractions and boost the park’s size by 23%, officials said.
