Walt Disney Co and Hong Kong have reached a deal to expand the territory’s Disneyland at a cost of nearly US$465 million in hopes of boosting the theme park’s fortunes, officials announced yesterday.
The deal will see the American entertainment giant invest all the necessary new capital to pay construction and operation costs during the building phases.
In the works for two years, the expansion plan is part of an effort to turn around the park after its disappointing attendance in its first two years of operation. Hong Kong’s government is also keen to enhance the park ahead of the possible opening of a Disneyland in Shanghai in the coming years that would siphon off Chinese tourists.
“The expansion will be a catalyst to the park’s long-term development and bring benefits to not just the local tourism industry, but also the entire economy,” said Rita Lau (劉吳惠蘭), Hong Kong’s commerce and economic development secretary.
The park, a joint venture between Walt Disney and the Hong Kong government that opened in 2005, will get three new theme areas, as well as 30 new attractions.
Under terms of the deal, the Burbank, California-based media company will also convert into equity about US$350 million in loans to the venture to help with funding and will keep open a credit facility of about US$40 million.
Hong Kong, which shouldered much of the US$3.5 billion original construction cost, will not add any new capital, the government said.
“Disney is making a substantial investment in this important project,” said Leslie Goodman, a Disney vice president.
The park came under fire after disappointing attendance in its first two years of operation, but traffic in its third year grew 8 percent, figures provided by the Hong Kong government showed.