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[Patrick]

Disney facing finance poser

Benjamin Scent

Thursday, May 10, 2007


Declining attendance numbers and guest spending at Hong Kong Disneyland are likely to leave Walt Disney Co unable to draw on a US$294 million (HK$2.29 billion) revolving credit facility, the company said.

"Hong Kong Disneyland may require alternative sources of financing to meet its operating and development needs," Burbank, California-based Disney said in a filing with the US securities regulator.

"Hong Kong Disneyland is engaged in discussions with the Walt Disney Company and Hong Kong Disneyland's other shareholder regarding financing options aimed at advancing its long-term financial and development needs," a spokesperson for Hong Kong Disneyland said.

The Hong Kong government owns 57 percent of Hongkong International Theme Parks, which operates Hong Kong Disneyland in a joint venture with the US giant, which holds the remaining 43 percent interest.

"Our discussion does not involve seeking additional funds from the government," the spokesperson said.

Disney expects to make an additional investment as part of the new financing arrangement. Alternative financing arrangements would need to be completed before September 30, when the performance stipulations of the revolving credit facility will be measured.

"Although there is no assurance that acceptable financial arrangements can be obtained prior to September 30, 2007, management currently expects that Hong Kong Disneyland will be successful in developing financial arrangements necessary to meet
its financial and development needs," Disney said.

Disney announced Wednesday that second-quarter profits jumped 27 percent on the success of road-trip movie Wild Hogs and growth at cable sports channel ESPN.

Second-quarter revenues from Disney's parks and resorts division climbed 9 percent to US$2.4 billion and segment operating income increased 19 percent to US$254 million.

Revenue increases from higher theme park attendance, guest spending, and hotel occupancy at Disneyland Resort Paris "were partially offset by lower guest spending and theme park attendance at Hong Kong Disneyland Resort," Disney said. Hong Kong Disneyland also saw a decline in operating income during the second quarter ended March 31.

"We're launching several marketing initiatives to boost attendance and address seasonality of the [Hong Kong] park," Disney senior executive vice president and chief financial officer Tom Staggs said in a conference call with analysts.

"We view Hong Kong Disneyland as a valuable asset in a rapidly growing market and we're confident in and committed to this project. We'll likely continue to invest in the park to help ensure its long-term success."

A spokesperson for Hong Kong Disneyland said the park recognizes that attendance and guest spending have fallen short of initial expectations, although "guest satisfaction continues to climb higher, reflecting continuous improvement in park operations and guest service."

Meanwhile, the Tourism Commission said the SAR government has no plans to use public funds to increase its investment in the Hong Kong Disneyland joint venture.

Source: http://www.thestandard.com.hk/news_deta ... con_type=3

Obviously the smallest magic kingdom is not doing too well, nice to see Paris getting mentioned about doing well for once though .

[Anthony]

Well a big   to Hong Kong Disneyland then!

Amazing such a cheap park can still struggle.  From what I can see, it just doesn't seem to have found its "place" in Hong Kong, it hasn't become a big feature the way DL, WDW, TDR and DLRP are for their areas and cities.

At least this completes Disney's early 90s trio of underwhelming parks nicely.

[Dlrpfan]

how on earth does this work because under a year ago there where too many ppl 4 the park - ahh i hope it does not go under and the decission of maybe having to close the park like in DLRP. But you never know what may happen

[Patrick]

Well I'm going to take a wild guess at how its worked, hkdl became the new thing, popular, suddenly every local person found out it was so small and so byebye trade.  No new attractions for a year is not a clever idea for a park this size.  This is how many people watch the parade at town square the other week apparently :lol: .

Photo: TDLFAN

The park seems to be starting to think about seasonal ideas, it worked for dlrp, but then again dlrp does have a load more attractions.  HKDL even had a gayday last month.  Then with the pirate season this month, they seem to have gone straight into the idea.

[Kristof]

I'm quite confident they need the Space Mountain Effect...

[Anthony]

...and I'm also quite confident they're thinking "why on EARTH did we pick it's a small world to open next year??!" #-o :lol:

That photo is scary!!  At least one thing DLRP has never been short of is visitors- they've always been quite consistent, if not quite as uber-high as TWDC hoped.

I still can't quite get my head around the fact it doesn't have Haunted Mansion, Pirates, BTM, Peter Pan, IASW, Indy Adventure, Star Tours, etc. I know we moaned about that in 2005, but it's just... not Disneyland.  No wonder the Peking park is doing so well.

[DisneyBud]

Blimey, guest flow must have been on overdrive that day

[x-charlotte-x]

At least there won't be any queues for the existing rides!  :lol:

That parade picture is quite scary, at DLRP you end up fighting for a good spot so that you can see!

[The Butlin Boy]

Oh Dear :?

(8/17/07) According to Variety, Hong Kong Disneyland is still suffering from low attendance problems and unable to lure in the tourists from Mainland China. They claim that the park is on track to report only 4 million guests in its second year (ending September). This is down from previous projections made just before and after the park first opened that called for something between 5.4 and 5.7 million in the park's second year. The reported attendance for the park's first year was 5.2 million, which was down from a projected 5.6 million.

It's not looking good for HKDL


 :arrow: http://www.screamscape.com/html/hong_ko ... eyland.htm

[Owain]

I still cant get over this park doesnt have a Frontierland , instead it just has a giant Adventureland or should i say " Pirateland " :!:

[TowMater]

I don't see nothing wrong with that picture, Stop living in the past.  

[maji]

heading there in 5 weeks so that will be 4 more bodies for the parade route !!

[disney_donutter]

oh my god, I cant believe the lack of people there to watch the parade, surely thats a joke?? lol

[RnRCj]

Is that picture real? :shock: I'd sure be a bit embarrased if I was one of the people in the parade :lol:

[The Butlin Boy]

(9/14/07) Hong Kong Disneyland has now officially been open for two years, but so far the park isn't talking about their attendance figures for the second year just yet. Industry rumors indicate that attendance in the second year could very well have dropped as low as 4.8 million, from the 5.2 million they pulled in the first year. Of course this is all down from the projected 5.6 million Disney had hoped to bring in the first year. However, it's actually quite a common trend for theme parks to experience a big drop in attendance during their sophomore year so this wasn't entirely unexpected.
  Meanwhile it looks like Disney may have bigger problems with their Hong Kong Cast Members. According to Yahoo News, a survey of 470 employees revealed that 63% were unhappy with park management, accusing them of unfair firings and rude behavior. The park has countered those claims with it's own survey of 1000 Cast Members where 92% of them felt that they were being treated with respect at the park.

 :?  :x  :cry:

 :arrow: http://www.screamscape.com/html/hong_ko ... eyland.htm