It’s not often that a business turnaround stuns the public, but the recent announcement from Hong Kong Disneyland Resort is nothing short of extraordinary. After nearly a decade of losses, the theme park has reported a record net profit and all-time high visitor numbers.
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How did it turn its fortunes around? What seems magical was a carefully crafted strategy of investing in Disney’s intellectual property (IP) – such as with the launch of World of Frozen – and a bold move towards higher pricing. This formula not only boosted attendance but enhanced revenue – showing that in the current climate, it is high-end tourism, not budget travel, that holds the key to success.
For its last financial year, Hong Kong Disneyland posted a record revenue of HK$8.8 billion (US$1.13 billion), a surge of 54 per cent year on year. Its net profit of HK$838 million was an astonishing turnaround from the previous year’s net loss of HK$356 million.
More visited and spent more at the park – there were a record-breaking 7.7 million visitors, up 21 per cent, while per capita spending grew by 28 per cent. The hotel utilisation rate climbed from 77 per cent to 88 per cent.
This success is extraordinary considering the park’s financial struggles since opening in 2005. As legislator Michael Tien Puk-sun noted, aside from the latest results, Hong Kong Disneyland had made a profit for only three years in its nearly two decades. In the previous nine years, from 2015 to 2023, accumulated losses exceeded HK$8 billion. For a long time, Disneyland was seen as a financial black hole.
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So what changed? According to management, one key driver was the strong rebound in visitors. Mainland visitors now made up 38 per cent of the total, from 24 per cent, while overseas visitors doubled to 22 per cent. In contrast, local visitors fell from 65 per cent to 40 per cent.