The loneliness of a major park: the rise and fall of Hong Kong Disneyland

Will Hong Kong Disney become the first Disney to go bankrupt?

This was a ridiculous problem more than ten years ago, but now it has become an imminent crisis!

In February 1999, the Walt Disney Company and the Hong Kong SAR government formally negotiated the construction of a new Hong Kong Disneyland. On October 31 of the same year, the two parties reached a cooperation agreement and jointly established Hong Kong International Theme Park Co., Ltd.-Hong Kong Disneyland Resort.

On January 12, 2003, Hong Kong Disneyland officially started construction, with a planned cost of HK$14.1 billion. As of 2007, the Hong Kong government's investment in the park alone had reached HK$23 billion.

In September 2005, the 126-hectare Hong Kong Disneyland on Lantau Island in the New Territories officially opened.

This is the fifth Disneyland in the world, the second in Asia, and the first in China.

The park is divided into 7 theme parks, namely Main Street, U.S.A., Adventure World, Fantasy World Tomorrow, World Toy Story Base Camp, Grizzly Gulch and Mystic Manor. Among them, Grizzly Gulch and Mystic Manor are the most popular in the world. Unique.

As the most famous amusement park in the world, Hong Kong Disneyland has been welcomed and loved by tourists since its opening.

Local residents of Hong Kong enthusiastically visit the amusement park, and many tourists from the mainland also come here mainly for Disneyland.

As the second Disneyland in Asia, it has also received many friends from all over Asia.

Since the opening of the park, Hong Kong Disneyland has been crowded with people. Some attractions even have to queue for more than three hours. Suddenly, Hong Kong Disneyland is making money and getting hand cramps.

However, due to high investment costs, Hong Kong Disneyland did not achieve profitability in the early stage even with a large number of daily visitors.

According to Hong Kong Disney's official website financial report data, it has been in a state of loss for the first seven years after its opening. It was not until 2012 that it achieved a "turnaround" and made a profit for the first time.

In 2012, net profit reached HK$109 million. In the following two years, Hong Kong Disneyland’s profits soared. In 2014, net profit reached HK$332 million, a rapid increase.

At that time, Hong Kong Disneyland was at its peak and dominated the major theme parks in the country.

On June 16, 2016, Shanghai Disneyland officially opened. It is the second Disney theme park in China and the first in mainland China. It is a theme park with pure Disney style and Chinese style.

Before the opening of Shanghai Disneyland, some people asserted: With the opening of Shanghai Disneyland, the grandeur of Hong Kong Disneyland will never return. Shanghai Disneyland will definitely affect the profitability of Hong Kong Disneyland. Hong Kong Disneyland will continue to lose money in the coming days.

This is indeed the case:

From 2016 to 2018, the number of visitors to Hong Kong Disneyland was 6.1 million, 6.2 million and 6.7 million respectively.

Even such a high number of admissions cannot save Hong Kong Disney.

Since 2015, Hong Kong Disneyland has been in a state of loss.

From 2015 to 2018, Hong Kong Disneyland’s losses were HK$148 million, HK$170 million, HK$345 million and HK$54 million respectively.

In 2021, Hong Kong Disney has become a hot search due to "loss of HK$2.7 billion in 2020".

This time is in sharp contrast to the grand occasion of the past. The three-hour queue is gone forever. There are no longer crowds of people, but more "depression" and "loneliness" ".

Since 2015, Hong Kong Disney has suffered losses for six consecutive years. Despite the support of such a powerful IP as Disney, Hong Kong Disney has still reached a critical moment of life and death.

(1) Operating costs are too high

The cost of living in Hong Kong is relatively high, followed by high labor costs.

In recent years, the number of full-time employees at Hong Kong Disneyland has been more than 5,000, and the number of part-time employees has been around 2,500. Even at its peak, the total number of employees reached 7,800.

Therefore, the annual employee salary cost that Hong Kong Disneyland needs to pay is very high, which is difficult to match in other domestic cities.

There are also relatively high annual equipment repair, update, expansion costs and some water and electricity costs.

Secondly. Hong Kong Disney's business model is a two-in-one government joint venture and franchise. The SAR government's profits are partly based on ticket revenue, while the profits of other ancillary operating projects such as Disney hotels and paid Disney Channels have nothing to do with the government.

Disney headquarters also needs to charge an annual brand fee of 7%. And pay project copyright fees, production fees, etc. to the US side. Regardless of whether Hong Kong Disney loses money or not, Disney Headquarters has always made money.

(2) The opening of Shanghai Disneyland

On June 16, 2016, Shanghai Disneyland officially opened.

Shanghai Disney received 11 million tourists in its first year of operation, achieving "profit in the first year of operation."

The opening of Shanghai Disneyland has greatly affected Hong Kong Disney.

Hong Kong Disneyland’s mainland visitors can even reach 50% of the total visitors during peak periods, while since the opening of Shanghai Disneyland, the peak period has only been just over 30%.

Why go to Hong Kong Disneyland when there is a Disneyland to choose from in the Mainland! After all, going to Hong Kong Disneyland is time-consuming and inconvenient, and you also need to apply for a pass.

Moreover, the expenses in Hong Kong are relatively high.

(3) Hong Kong Disneyland’s equipment is old

It has been 11 years since Hong Kong Disneyland opened in 2005 to 2016.

In the past 11 years, the amusement equipment has become obsolete.

The freshness of Hong Kong Disneyland is far less than that of Shanghai Disney.

Most people have a mentality of "loving the new and hating the old".

(4) Violence in Hong Kong

The violence in Hong Kong lasted for several months, causing a great social disturbance. This extremely absurd and continuous violent incident has also affected the development of Hong Kong's tourism industry, which has suffered a heavy blow.

During that time, few people wanted to go to Hong Kong. Whether it was for shopping or entertainment, the number of mainland and foreign tourists was greatly reduced or even close to zero. Most of the people who went to Hong Kong were forced to go to Hong Kong for work.

(5) Impact of the epidemic

Due to the early impact of the epidemic, Hong Kong Disneyland was temporarily suspended on January 26, 2020. It was closed for more than 4 months before reopening on June 18. open.

Less than a month after the park opened, it was announced to be closed again on July 14.

As the world's third largest economic center and a prosperous port city, Hong Kong has frequent population movements at home and abroad, and epidemic control often fails to achieve the results of the mainland.

While major theme parks in the mainland have opened their doors to welcome many tourists, Hong Kong Disneyland is still closed.

(6) The rise of domestic theme parks

With the rise of major domestic theme parks, people have more and more choices.

Among domestic independent theme parks, Zhuhai Chimelong Ocean Kingdom ranks first.

In 2020, Chimelong Ocean Kingdom received 11.736 million visitors, while Shanghai Disneyland received 11.21 million visitors.

Chimelong Ocean Kingdom surpassed Shanghai Disneyland for the first time and stood out, ranking 8th in the world theme park rankings and standing at the top of China's theme parks.

From the rankings, we can see that it is the only Chinese theme park that ranks among the top 10 theme parks in the world!

If Hong Kong Disneyland does not have good remedial and rescue measures and cannot turn the tide, Hong Kong Disneyland may truly become the first Disneyland to go bankrupt!

Nowadays, there are various theme parks across the country. Come and have fun with your family or friends.

If it were you, which theme park would you choose first?

Should we go to Hong Kong Disneyland, or choose Shanghai Disneyland, Chimelong Ocean Kingdom, or other theme parks? Come and share it!