After five consecutive years of losses, the Hong Kong Disneyland Phase II land has been reclaimed by the government?
After completing the reclamation project, it has been idle for more than 11 years, and Disneyland has not exercised the right of first-hand subscription. As the epidemic continues, Hong Kong's tourism industry has been frozen. On September 23, the Hong Kong Special Administrative Region government announced that the land subscription right for the second phase of the Hong Kong Disneyland development has expired. Taking into account the current economic conditions, the government will not extend the validity period of the subscription right. A spokesperson for the Hong Kong Commerce and Economic Development Bureau said: The government believes that it is prudent for the theme park companies to focus on the development and expansion of existing resorts in the next few years, rather than expand the relevant land. According to the 'Subscription Right Contract' signed in 2000, the theme park company, a joint venture company established by the Hong Kong Special Administrative Region Government and The Walt Disney Company for the development and operation of the park, was granted the right to subscribe to purchase Penny's Bay, Lantau 60 hectares will be used as reserve land for the second phase expansion of Disneyland. The SAR government stated that the validity period of the subscription rights will expire on September 24 this year. Due to the government's decision not to extend the subscription rights, the theme park company's right to purchase the Penny's Bay site will not be renewed. It is understood that the reclamation project for the second phase of development land began in 2003 and was completed on January 19, 2009. However, after the completion of the reclamation project, it has been idle for more than 11 years, and Disneyland has not exercised the right of preemption. In response, the Walt Disney Company spokesperson said that in the past 15 years, it has kept its promise to invest in the Hong Kong Disneyland Resort and promote the economic development of Hong Kong’s tourism industry. Future expansion plans for the park will also continue to invest funds for the Hong Kong government. The decision not to extend the validity period of the second-phase land subscription rights expressed extreme disappointment. It is understood that, according to the 'Subscription Rights ContractBlock Disney theme parks and hotels. The subscription contract can be renewed twice after its expiration, each for a period of 5 years. Yao Sirong, member of the Legislative Council of Hong Kong's tourism industry, told the 21st Century Business Herald: In the past ten years, Disney has not put forward a specific development plan and left the land idle. It is understandable that the SAR government has exercised the rights of major shareholders to stop the extension of the subscription rights. He said frankly that from the perspective of operations in Greater China, the Disney Group will be more inclined to invest in the lucrative Shanghai Disneyland, and it has relatively reservations about Hong Kong Disney's investment. Loss for five consecutive years As the world's smallest Disneyland, Hong Kong Disneyland has recorded losses in recent years, and the outbreak has made it even worse. Christine McCarthy, Chief Financial Officer of the Disney Group, previously stated that the park was forced to suspend due to the epidemic. From January to March this year, Hong Kong Disneyland’s operating income is expected to drop sharply by US$145 million. In the second half of this year, due to the repeated epidemic in Hong Kong, Hong Kong Disneyland was closed again. Hong Kong Disneyland, which opened in September 2005, once expected that within 5 to 15 years after the park opened, the annual number of visitors is expected to exceed 10 million. However, the 21st Century Business Herald reporter checked the data and found that in the past 15 years since its opening, Hong Kong Disneyland’s attendance has never exceeded 10 million. After setting a record high of 7.5 million in 2014, it turned around immediately. Affected by the social conflict, in fiscal year 2019 (October 2018 to September 2019), Hong Kong Disneyland recorded a loss of 105 million Hong Kong dollars, a five-year-old loss, and the number of attendees fell 4% year-on-year to 6.5 million. Since fiscal year 2015, Hong Kong Disneyland has accumulated losses of HK$976 million. In fact, since the 2008 fiscal year, Hong Kong Disneyland has recorded losses in 11 fiscal years, and only recorded a short-term profit during the 2012-2014 fiscal year. The Hong Kong Special Administrative Region Government, which holds more than 50% of the shares in the Hong Kong Disney Joint Venture, has invested more than 30 billion Hong Kong dollars. In order to cope with the loss and the decrease in visitors, Hong Kong Disneyland announced in November 2016 that it will implement a six-year expansion plan starting in 2018, including the construction of the world's first Frozen theme area and a Marvel superhero Subject area. The total cost of the plan is HK$10.9 billion, of which the Hong Kong Special Administrative Region Government contributed HK$5.8 billion, and the Walt Disney Company will bear the remaining HK$5.1 billion. Change to residential land? Hong Kong has been facing a shortage of land supply for a long time, so some people have suggested that the second phase of land be used for the construction of public housing, and it is estimated that it can provide 20,000 to 40,000 units. However, according to sources, according to the contract signed between the Hong Kong Special Administrative Region Government and Disney, houses, commercial facilities, hotels, racecourses and other facilities cannot be built on the plot, and the buildings cannot be taller than 20 meters. I personally think that if Disney has no plans to expand or use other better plans for the time being, this piece of land is understandable as a short-term supply of transitional housing. However, it is not suitable for a single residential purpose for a long time because the area does not have suitable and sufficient transportation, commercial and living facilities, and it is not suitable for public housing development. Knight Frank Executive Director Lin Haowen told a reporter from 21st Century Business Herald. He pointed out that if the building density is too high, it will affect Disney’s landscape and operations. Therefore, in the long run, the land should be used for commercial or tourism and leisure purposes, thereby creating a synergistic effect with Disney. He predicted that if the land has no development restrictions, it will be allowed For commercial or tourism development, the land value is expected to exceed 10 billion Hong Kong dollars. Due to the new crown pneumonia epidemic, the Hong Kong Special Administrative Region government had built a temporary quarantine center on the site earlier, and it has been approved by The Walt Disney Company that 2,000 quarantine units can be put into service by the end of this year. Author: Zhu Lina