Hong Kong Disneyland posts 83% reduction in losses as post-pandemic recovery continues
- Despite recording ninth straight year of losses, theme park’s revenue soared 156 per cent to HK$5.7 billion last year as visitors return
Hong Kong Disneyland Resort reduced its net losses by 83 per cent to HK$356 million (US$45.6 million) in 2023 in a strong post-pandemic recovery that extended into the first quarter of this year.
“We are back and have turned the corner financially,” he said, adding that it had been “a challenging journey through the Covid-19 pandemic”.
Despite the relative improvement, 2023 nonetheless marked the company’s ninth consecutive year of losses.
Disneyland’s Ebitda – or earnings before interest, taxes, depreciation and amortisation – rose by 207 per cent year on year to HK$924 million for the 12 months ending last September 30.
Revenue soared 156 per cent to HK$5.7 billion last year as visitor numbers increased 87 per cent to 6.4 million.
The turnaround in Ebitda means its parent company, Walt Disney Company, will be able to charge a management fee. The base management fee is set at 6.5 per cent of Ebitda with a variable management fee of zero to 8 per cent.
Moriarty said mainland Chinese visitor numbers rebounded strongly last year and exceeded the figures for the 2018 financial year. Southeast Asian visitors also showed a strong return.
Spending per capita in the park jumped 54 per cent in 2023 from the previous year.
However, the recovery of long-haul visitors to Disneyland and Hong Kong remained constrained by flight capacity, which Moriarty said “has not come back to the pre-pandemic level”.
Moriarty attributed the theme park’s recovery to new attractions such as the Ant-Man and The Wasp: Nano Battle! ride in 2019, the revamped Castle of Magical Dreams in 2020, and shows such as “Follow Your Dreams” in 2021, “Momentous Nighttime Spectacular” in 2022 and “World of Frozen” last year.
The overall occupancy rate for the park’s three hotels - Disneyland Hotel, Hollywood Hotel and Explorers Lodge - had risen to 47 per cent in the last financial year from the previous year’s 24 per cent.
The lower rate was recorded at a time when Hong Kong remained under pandemic restrictions, while the Disneyland Hotel was the only one of the three to remain open throughout the three years of Covid-19.
Increased demand spurred Disneyland to return to opening seven days a week earlier this month, up from six.
Moriarty said the theme park had fully repaid a revolving loan facility that its US parent company had provided.
“The recovery was fast and huge enough that we paid it back in December last year.”
Lawmaker Michael Tien Puk-sun said the park’s strong performance in recent months was “the best news” he had heard in a while, despite the operator reporting an overall loss for the previous financial year.
The first half of that year, which began in October of 2022, was while the city still had pandemic restrictions, he added.
“If Disneyland had been able to fully perform for the entire year, I am certain its revenue could have reached up to HK$8 billion, which would have been a record high,” the legislator said.
Tien said he believed records set in the second half of that year would be used as a benchmark for “many years to come”, adding he was almost certain the park would record a profit for the next fiscal year, based on the current trend.
“So if they make money, they don’t need to come to the Legislative Council again for more funds,” he said.
“They can rely on their revenue for their own internal growth … this is what I want to see most.”
Disneyland has only recorded profits over three years since opening in 2005. It is 52 per cent owned by the Hong Kong government, with the rest held by US-based Walt Disney Company through a joint venture called Hong Kong International Theme Parks.
