Hong Kong Disneyland Resort spotlights offerings which led to record high local attendances despite COVID impacts

May 16, 2023

Hong Kong Disneyland Resort (HKDL) has reported its business results for the fiscal year 2022 revealing both record highs for local attendance and annual pass memberships which rose by 22% year-on-year, despite the continued negative impact of COVID on tourism and operating conditions.

FY22 represented the third consecutive fiscal year of major business and operational disruption for HKDL as a result of the pandemic. As required by relevant regulatory measures, the resort experienced a compulsory closure of its theme park for nearly three and a half months, which was longer compared with the prior year, as well as capacity limits, social distancing requirements and other anti-pandemic measures. In FY22, HKDL’s theme park only operated for about six months in total due to both mandatory closure and five- day operation weeks.

The fifth wave of the pandemic in Hong Kong led to continued travel restrictions and quarantine requirements, keeping tourist arrivals essentially at a standstill. The resort also faced severe headwinds from the overall market environment, with a reversed economic growth trajectory and a shrinking local workforce.

Despite these challenges in FY22, HKDL posted a 22% increase in total attendance to 3.4 million fuelled by only local Hong Kong residents. Revenue for the year grew by 31% to HK$2.2 billion. Earnings before interest, taxes, depreciation and amortisation (EBITDA) improved by 11%, to negative HK$861 million. Net loss narrowed to HK$2.1 billion, which represents a 12% improvement compared to the previous year.

At the resort hotels, overall occupancy edged up three percentage points to 24%, reflecting, among others, the absence of tourist arrivals as well as the temporary closure of the Disney’s Hollywood Hotel for planned renovation. However, the hotel utilisation for the year was 78%. Efforts to enhance guest offerings and products drove improvements in per capita guest spending and per room guest spending by 11% and 7%, respectively.

In addition to deferring royalty payments for FY22, The Walt Disney Company (“TWDC”) has upsized its revolver facility for HKDL from HK$2.1 billion to HK$2.7 billion since November 2022, demonstrating their support of the resort.

When the government relaxed health control measures as soon as the pandemic situation had improved, HKDL reacted swiftly by adjusting its operations to capture business opportunities. These have enabled the resort to maintain its commitment to Hong Kong’s tourism industry.

Michael Moriarty, managing director at Hong Kong Disneyland Resort shares “thanks to the staunch support of our shareholders, cast members (staff) and the people of Hong Kong, strong brand appeal, exciting guest offerings and effective business strategies, we have seen improvements across the board despite headwinds from the prolonged pandemic.

“The reimagined Castle of Magical Dreams and nighttime spectacular ‘Momentous’ have been game changers. Additionally, the world’s first and biggest Frozen themed land, which will be launched later this year, will be a defining addition to our world-class attractions that help us win over locals and tourists alike”.

The theme park will review market conditions and, where appropriate, adjust its operation to open six or seven days a week from mid-June onwards to meet guests demand.

HKDL optimises performance in locals-only market with premium offerings and brand loyalty

With a “locals-only” market landscape due to the pandemic in the past few years, HKDL optimised its performance by introducing an exciting array of new offerings with creative storytelling, driving business and product innovation and launching targeted sales and marketing communications – all while prudently managing its cost base.

Popular seasonal events including Halloween and Christmas offered local guests impressive experiences. A number of special and timely promotions, notably the “Double the Fun” offer, helped drive repeat visits.

The resort also collaborated with local cultural talent, strengthening community bonds. In December 2021, the resort joined hands with the Hong Kong Philharmonic Orchestra to curate the first-ever in- park live orchestra performance, “A Magical Nighttime Symphony”. This performance showcased HKDL as a premium destination that brings together culture, entertainment and tourism.

In June 2022, the resort launched “Momentous”, a brand-new nighttime spectacular at the majestic Castle of Magical Dreams, reinforcing HKDL’s position as a premium resort for guests and fans.

The introduction of LinaBell, the inquisitive fox from Duffy and Friends, performed extremely well with fans, with the first 10,000 LinaBell plush toys selling out online within six hours of launch. Under the “Duffy Fans-tasy” campaign, Linabell became HKDL’s best selling merchandise product in FY22 in only 17 days.

The acclaimed Halloween show, “Let’s Get Wicked”, featuring popular Disney villains, won the “2022 IAAPA Brass Ring Award for Most Creative Halloween Haunt, Show, or Experience”, one of the most prestigious honours in the global attractions industry.

The resort has also continued to implement health and safety measures that take into account the latest guidance from government authorities, with a focus on preserving the guest experience. The resort continues to maintain exceptional guest satisfaction ratings in FY22, with 94% of theme park guests surveyed and 89% of hotel guests surveyed reporting that their overall experience was “excellent”, “very good” or “good”.

Expanding community contributions and fostering diversity, equity and inclusion

Throughout the year, HKDL remained committed to community service and promoting inclusive opportunities. The resort continued to collaborate with community leaders and non-profit organisations to understand local social needs and create timely, impactful initiatives. Additionally, HKDL continued to give out nearly 60,000 complimentary theme park tickets to people in need despite fewer operating days in FY22.

HKDL helped the local community through Disney VoluntEARS in three major areas. These included providing a free online storytelling video series; donating food and essentials to underserved families; and demonstrating appreciation to medical staff and other frontline workers. Over the past 17 years, HKDL has dedicated around 114,000 volunteer hours to spreading magic beyond the resort to the local community. The resort also collaborated with the Foodlink Foundation to donate nearly 10 tonnes of food.

As part of its initiatives to support the disabled community, HKDL collaborated with different non-profit organisations to:

offer the Barrier-Free Ambassadors Training Programme so employees can further understand their needs;
relaunch a four-month apprenticeship programme “Disney Side by Side Journey” to provide vocational training and job opportunities; and
provide additional inclusive offerings and products, such as introducing theatrical interpretation with sign language with body movements to the Halloween show “Let’s Get Wicked” and “Mickey and the Wondrous Book”.

HKDL is committed to inspiring and empowering the next generation of diverse storytellers and innovators. It held the Disney Imaginations Hong Kong 2022 Design Competition which saw the participation of more than 300 local tertiary students. Members of the champion team were given internship opportunity at the resort for eight weeks.

Collaborating with The Boys’ & Girls’ Clubs Association of Hong Kong, the resort funded the Sports Legacy Scheme to provide tailor-made professional sports training for around 200 children and young people. A new career and life development programme, “Youth Dare to Dream”, was also launched, covering ethnic minorities and others.

Additionally, HKDL prioritised the wellbeing of its cast members and improved its package of staff benefits. This included increasing parental leave entitlement and expanding child bonding leave benefits to all staff. Nearly 190,000 hours of professional and technical training, workshops on diversity, equity and inclusion, and an Emerging Leaders programme were also provided to develop a highly skilled, quality labour force.

The resort was recognised once again as one of the “Most Attractive Employers 2022” among university students in Hong Kong. On average, HKDL employed around 4,700 full-time and over 1,400 part-time staff during FY22, continuing to be one of Hong Kong’s largest employers in the tourism and family entertainment industry.

In the past 17 years of operations combined, the resort brought approximately HK$116.1 billion of value-added to Hong Kong’s economy, equivalent to 0.27% of Hong Kong’s GDP, and cumulatively created 277,200 jobs (in terms of man-years), benefiting Hong Kong’s overall economy.

Image. Michael Moriarty, Managing Director Hong Kong Disneyland Resort

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