Reporting results fully seven and a half months after the fact, Hong Kong Disneyland Resort said that it lost nearly $1 million per day last year. For the financial year to September 2020, theme park and hotel revenues were $185 million. Net losses reached $341 million (HK$2.66 billion).
The global coronavirus pandemic meant that the theme park was closed for some 60% of the financial year. The park’s hotels were open longer, but operated at minimum safe levels. Management described the turmoil as: “a year of unprecedented uncertainty and challenges to the global tourism industry.”
“These numbers do not provide a meaningful reference of our future potential,” said MD Michael Moriarty.
Border restrictions meant that the park could not rely on its normal mix of international and local visitors. It had to re-focus instead on the local Hong Kong population. Average visitation by locals increased 15% per open day, Moriarty said. But, because of repeated periods of closure, total visitor numbers dropped by 73% to 1.8 million.
The Walt Disney Company, which is a 47% minority owner, provided a $270 million (HK$2.1 billion) revolving credit facility. HKDL started to draw on the credit line from the beginning of the current financial year for working capital and operational needs. Moriarty said that there were no plans to tap the Hong Kong government, the park’s majority shareholder, for similar credit facilities. He also said that the management fees that Walt Disney earns from HKDL, which have proved controversial with local politicians, are performance-based and that none were paid for the financial year to September 2020.
Moriarty suggested that the resort is well-positioned for business recovery. He highlighted new or revised attractions at the park, including a Castle of Magic Dreams that has been rebuilt twice as high as the original, and new daytime show “Follow Your Dreams” will launch on June 30.
But, as so many of the elements that make the difference between profit and loss, such as disease control, vaccinations and the resumption of cross border travel within the Greater Bay Area and South East Asia, are beyond management’s control, Moriarty carefully avoided making financial predictions.
“We need to stay open and for borders to reopen,” he said. The park has been back in continuous operation since Feb. 19, 2021.