Disneyland Pays off Loans, Cuts Ties to Anaheim
Hong Kong Disneyland is now officially free and clear of financial debts to The Walt Disney Company, leaving one of the world’s most profitable theme parks to be controlled by the Chinese government.
The Hong Kong Disneyland Resort was the first Disney Park opened in China, a massive step forward for the Mouse in terms of establishing a foothold in the mega-profitable Asian market. Established in 2005, it was part of then-CEO Bob Iger‘s (who has since returned to lead the company) plan to expand the company’s global theme park dominance and has since been followed by Shanghai Disney Resort.
In addition to the actual resort, Hong Kong Disneyland contains the Hong Kong Disneyland Hotel, Disney’s Hollywood Hotel, and Disney Explorers Lodge, all of which have been specifically tailored and constructed to appeal to Chinese cultural sensibilities and traditional Disney imagery. It currently includes Ant-Man and The Wasp: Nano Battle!, a reimagined Castle of Magical Dreams, the castle daytime show Follow Your Dreams, the Momentous Nighttime Spectacular, and the World of Frozen.
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However, unlike the Disneyland Resort in Anaheim and the Walt Disney World Resort in Orlando, Hong Kong Disneyland is not owned outright by the Mouse House. Instead, due to strict national laws, the company is actually majority-owned by the Hong Kong government, itself a special district of the People’s Republic of China. Disney technically manages the park and has maintained control over its operations via a revolving credit line, which helped it stay afloat during the strict Chinese isolation protocols of the COVID-19 pandemic.
For many years, Hong Kong Disneyland has been unable to turn a profit, in part because of COVID and partially due to the significantly smaller size of the resort than most Disney Parks. That has also left it unable to pay back its Disney credit and, despite the Chinese government owning 52% of the park (under the joint venture Hong Kong International Theme Parks, Limited), both figuratively and literally in debt to the Mouse.
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That has changed. Variety reports that Hong Kong Disneyland has massively increased its revenue and reduced losses in the last year, saying:
“[R]evenue between October 2022 and September 2023 climbed by 156% to HK$5.7 billion ($731 million) as total attendance grew by 87% to 6.4 million. Earnings before interest, taxation and depreciation (EBITDA) tripled to HK$924 million ($118 million) and net losses tumbled by 83% to HK356 million ($45.6 million).”
Even more importantly, this has allowed the Hong Kong government to pay back its debt to Disney and, reportedly, it has not extended any more credit. On the plus side for Disney, the Mouse can now charge a management fee, but it is notable that it has lost significant authority over a major Disney Parks asset.
Disney Parks are a more important part of the company’s revenue than ever, and China is one of the world’s largest consumer markets for all forms of entertainment. The more control that the Mouse loses there, the less money it will likely be able to make.
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