Hong Kong Disneyland was expecting a great year from its new Marvel attraction. Instead, it saw a less marvelous year marred by pro-democracy protests.
Walt Disney Co. said the protracted political unrest in Hong Kong is denting earnings at the local Disneyland park after increasingly violent protests caused a major drop in visitors to the city.
Operating income at Hong Kong Disneyland could decline by about $275 million in the fiscal year ending September 2020 if the demonstrations continue to track current trends, Chief Financial Officer Christine McCarthy told investors in an earnings call on Thursday.
The company expects operating income at the park to fall $80 million in the current quarter after slipping $55 million in the previous three months, she said.
Hong Kong’s economy entered a recession in the third quarter as almost five months of unrest hurt local businesses. Tourism has plummeted across the board, especially arrivals from mainland China, which accounts for almost 80 percent of all visitors to the city. For instance, Hyatt Hotels Corp. said revenue per available room plunged more than 50 percent in the city in October.
Earlier Thursday, Disney reported better-than-expected fourth-quarter results, sending its shares up as much as 4.5 percent in extended trading. Results for the quarter were led by the company’s storied film studio, which released hits such as the live-action “Lion King” during the period.
Growth in operating income at Disneyland Paris and Shanghai was largely offset by the slippage in Hong Kong, McCarthy said.
In February, Hong Kong Disneyland had anticipated an “amazing year” based on a new Marvel attraction and a new bridge connecting Macau on the mainland.
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Photo credit: Hong Kong Disneyland Resort. Joel / Flickr