Hong Kong Disneyland has made a remarkable financial recovery, slashing its losses and repaying a loan to Disney. In a recent financial statement, the theme park revealed a significant increase in revenue and a substantial reduction in losses for the year ending September 2023.
Record Revenue and Increased Attendance
The park, a joint venture between the Hong Kong government and the Walt Disney Company, reported a 156% increase in revenue, reaching HK$5.7 billion ($731 million). This surge in revenue was accompanied by an 87% increase in total attendance, with 6.4 million visitors during the period from October 2022 to September 2023.
Earnings before interest, taxation, and depreciation (EBITDA) tripled to HK$924 million ($118 million), while net losses plummeted by 83% to HK$356 million ($45.6 million). These financial improvements indicate a strong recovery for the park.
Financial Turnaround and Continued Success
According to park operators, Hong Kong Disneyland has been profitable since the summer of 2023. The trend of financial success continued into the first quarter of 2024, with record-breaking revenue, EBITDA, and net earnings. However, specific figures for this period were not disclosed.
Local media reported that the improved EBITDA allows Disney to charge a management fee. The base management fee is set at 6.5% of EBITDA, with a variable fee ranging from zero to 8%. In December 2023, Hong Kong Disneyland fully repaid a revolver credit facility funded by a Walt Disney Company subsidiary and has not drawn on it since.
Michael Moriarty, the park’s managing director, stated, “We are back and have turned the corner financially.” He highlighted the challenges faced during the COVID-19 pandemic, including stringent anti-disease controls, closed borders, and restricted operations. These measures impacted the city’s tourism industry, delaying the full recovery of its leading airline until early 2025.
Strategic Growth and New Attractions
With the resumption of inbound tourism, Hong Kong Disneyland’s business strategies began to yield positive results. The park’s growth momentum accelerated in 2024, driven by the success of new attractions like “World of Frozen.”
Over the past five years, Hong Kong Disneyland has continually added new infrastructure and attractions. These include “Ant-Man and The Wasp: Nano Battle!” in 2019, the reimagined “Castle of Magical Dreams” in 2020, the “Follow Your Dreams” daytime show in 2021, the “Momentous Nighttime Spectacular” in 2022, and “World of Frozen” in 2023.
Resurgence in Tourism
Following the lifting of travel restrictions, non-local attendance surged, surpassing the recovery of the local market. By the end of the reporting period, visitors from mainland China had exceeded levels seen in the 2017-18 financial year. Additionally, arrivals from Southeast Asian markets also increased. Cumulative attendance by the end of September 2023 reached over 98 million.
In conclusion, Hong Kong Disneyland’s financial turnaround and strategic growth initiatives have set the stage for continued success. The park’s ability to attract a diverse and increasing number of visitors highlights its resilience and potential for future growth.