The HKDL Source : Hong Kong Government and the Future of HKDL

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Business Several reports out this week indicate that the Hong Kong SAR Government is not that excited about further funding the failing franchise. However, this may not quite spell the end of Hong Kong expansion as we know it - quite the opposite in fact.

Following the Apple Daily's report that the Hong Kong Government and Disney were in talks for further park expansion, there have been several more reports indicating that the talks could go either way at this point. Whatever the case is, the Hong Kong SAR Government seems less than pleased with the idea of further funding the disappointing results that Hong Kong Disneyland has yielded in gate statistics since its September 2005 opening. However, the positive side of this is that both parties agreed on the need to increase the number of attractions in the park over the next few years, with some saying as many as 10 new attractions may debut in that time.

The most interesting report was one from the International Herald Tribune,

"Hong Kong Disneyland is unlikely to receive more money from the local government to fund new attractions because of disappointing attendance at the theme park since it opened two years ago, a local newspaper reported Wednesday.

A spokeswoman for the park, a joint venture between The Walt Disney Co. and the Hong Kong government, said it is still discussing financing options with the government.

Hong Kong's Apple Daily newspaper reported Wednesday the local government, instead of providing fresh cash, is inclined to give the park more land, or sell down its stake in Hong Kong Disneyland for cash to reinvest in the park. All land in Hong Kong is technically owned by the government and leased to commercial developers on long-term contracts.

The government believes the Hong Kong public will not support fresh spending on the park because of its unsatisfactory results, the paper said. Hong Kong's Commerce and Economic Development Bureau had no immediate comment on the report.

Hong Kong Disneyland spokeswoman Glendy Chu said Disney and the government are "engaged in discussions regarding financing options aimed at advancing the long-term financial and development of Hong Kong Disneyland".

She declined further comment.".

Another article concurred with the above information, reiterating the Hong Kong SAR's options of selling down its share or freeing up more land. Now, this all sounds pretty dire, especially if you know that the Hong Kong Government is a 57% stakeholder with Disney in the Hong Kong Disneyland venture. However, as we've indicated before, this may not be the end of the world. All this means is that the Hong Kong SAR is not going to inject more money into the project, which would mean that the cost of expansion and growth will fall on Disney. Some may argue with over US $1 billion being sent into Disney's California Adventure (DCA) in Anaheim, it is less likely that this money is going to head to Hong Kong. However, all other indication we have heard point to Disney CEO Bob Iger viewing the Asian park as a pet project, and nobody at the top level of Disney is keen to see their toehold on China slip into oblivion. This year's Halloween event, for example, is an indication that Disney are willing to spend a bit more on seasonal events than they were a year ago.

Besides, the advantage of being partners with the government has never purely been one of money. Given the problems Disney is facing in Anaheim at the moment with zoning measures, having a partner that can literally free up the land needed for park expansion may just be the ticket Hong Kong Disneyland needs to expand beyond our wildest dreams.

Posted By Richard Gray on October 3rd, 2007 at 4:04 pm | Viewed 852 Time(s)

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The HKDL Source

Hong Kong Government and the Future of HKDL

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