Walt Disney Co. is embarking on a $1.4 billion expansion of its Hong Kong Disneyland resort, which reported a loss last year, with features that include the first “Frozen” and Marvel-themed lands in its parks.
The six-year construction project, which will begin in 2018, will include two attractions based on the animated film “Frozen” and a related dining area, new rides tied to Marvel’s superheroes as well as entertainment additions to the existing Sleeping Beauty Castle. The park recorded a loss of HK$148 million ($19 million) in the fiscal year ended last October amid a slower Chinese economy and political unrest in Hong Kong. Figures for the latest fiscal year are not yet available.
“Hong Kong tourism is in an adjustment period,” the city’s commerce secretary Gregory So said at a joint briefing with Disney in Hong Kong that featured actresses posing as the main “Frozen” characters “Elsa” and “Anna.” The expansion is a strategic development to attract tourists who would stay overnight and spend more, he said.
The move adds to planned growth at Disney’s parks division, its second-largest business after TV networks. The company opened its $5.5 billion Shanghai resort in June and announced on Saturday a summer 2017 opening date for its “Avatar” themed land in Orlando, Florida. Parks division revenue climbed 5 percent to almost $17 billion last year, while profit rose 9 percent to $3.3 billion.
“We are more excited than ever about the future of Hong Kong Disneyland,” Bob Chapek, chairman of Walt Disney Parks and Resorts, said in a statement.
Hong Kong Disneyland is the smallest of the company’s six resorts worldwide. The property was criticized after its 2005 opening as lacking the breadth of attractions at other Disney parks. Hong Kong has seen a series of expansions since that include an Iron Man Experience ride opening in January and a third hotel, the Explorers Lodge, in the first half of next year.
Attendance dipped in 2015 and the park slipped back into a money-losing position after three years of profitability. The park is 47 percent-owned by Disney with the rest held by the Hong Kong government. Financing for the capital investment will be proportional to the ownership, Disney said, and is still subject to approval by the company’s board of directors and Hong Kong legislators.
“Frozen,” released in 2013, is the highest-grossing animated film of all time with worldwide box office sales of almost $1.3 billion, according to the research site Box Office Mojo.
©2016 Bloomberg L.P.
This article was written by Christopher Palmeri and Crystal Tse from Bloomberg and was legally licensed through the NewsCred publisher network.