HONG KONG -- A victim of the dwindling number of visitors from China, Hong Kong Disneyland has suffered a full-year loss after three years in the black.
The park recorded a net loss of 148 million Hong Kong dollars ($19.3 million) for the fiscal year ended October following a HK$332 million profit the previous year. Revenue was down 6.4% at HK$5.1 billion after a record HK$5.4 billion in fiscal 2014, while visitors fell to 6.8 million from a peak of 7.5 million.
Its overall hotel occupancy rate, meanwhile, fell to 79% from the year-earlier 93%, and per-capita guest spending was up only 3%.
The weak performance comes as the Hong Kong theme park girds itself against the economic slowdown in China and competition from the much larger $5.5 billion Shanghai Disneyland, opening in June with lower ticket prices.
"The next two years will be very challenging," Hong Kong Disneyland Managing Director Andrew Kam Min-ho told reporters on Monday, adding: "We have plenty of new attractions to offer."
A 750-room hotel is due to open in 2017. Kam said new attractions this year include a revamp of the Space Mountain roller coaster with elements from "Star Wars," and a themed area based on Marvel's Iron Man franchise.
"Our asset is really differentiation," Kam said. "We will focus on serving customers around the region." Falling numbers from China have encouraged the theme park to look harder at Southeast Asian markets, including Indonesia, the Philippines and Thailand. Mainlanders still account for 41% of visitors, and Hong Kongers 39%.
Overall, in Hong Kong, nearly 75% of tourists are from China. The number fell 2.5% to 59.32 million last year -- the first drop since 2003, when Beijing relaxed travel restrictions.
Kam dismissed violent clashes in Mong Kok, Kowloon, on Feb. 8 as a "single event" that would have little impact on the park's business.
Analysts are less optimistic over the longer term, however. A February survey by brokerage CLSA suggests that nearly two-thirds of middle-class families in China want to visit Shanghai Disneyland and 17% plan to go this year.
"The new Disneyland is likely to draw a large portion of travelers" from China whose Hong Kong itinerary includes the Magic Kingdom, CLSA said in its report.
Hong Kong Disneyland is 52%-owned by the Hong Kong government. It is the world's smallest Disneyland, and a third the size of Shanghai's, but is slated for a 25% expansion. The government said in January that it was in talks with Walt Disney Co. on the upgrade. Kam said the weak earnings are unlikely to delay the expansion as both shareholders prefer to invest in long-term tourism infrastructure over paying out dividends at this stage.