Expansion Plans for Disneyland

Managing director Andrew Kam Min-ho said yesterday that Hong Kong Disneyland would bolster its size by more than one-third and would cost half the price of the cruise terminal which is to be built in Kai tak. The approximate cost of the terminal, made by the government is about HK$ 7.2 billion, which means that the park- expansion bill would be about HK$ 3 billion to HK$4 billion.

Mr. Kam also said that three “lands” with a new theme would be occupying about 12 hectares of the 20- plus hectares of land available for development at the theme-park site. Main Street USA, Fantasyland, Tomorrowland and the largest Adventureland in the world are the current prime features of Hong Kong Disneyland.

Disney is amenable for financial help for the current expansion plans and is negotiating with the government as its joint- venture partner in times ahead. The government hold a stake of 57% in the theme park and according to Mr. Kam, the administration would remain the majority shareholder and the only languish would be a slight decrease in its stake if the taxpayer’s funds were not used in to pay for the expansion.

It is quite understood that the government’s failings to inject proportionate funds for expansion plans would lead to a dilution in its majority stake. The debate lies in the decision of the government whether it is willing to pool in funds or is ready to accept a smaller stake. Bill Ernest, Walt Disney Parks and Resorts president and managing director for Asia, said that the talks have been on for a while and would be an ongoing process.The fact that different financing arrangements would alter the capital structure of the theme- park joint venture was reiterated by a spokesman for the Commerce and Economic Development Bureau. He said the government needed to consider the interest of the public and return on its investment yet had declined to put a deadline on the talks.

According to Mr. Kam, both sides had implicit knowledge about the urgency of the negotiations in a time of financial downturn as the expansion plan would help creating thousands of jobs, propping up the economy and would help taking advantage of falling commodity prices and labour costs. Estimated time for this construction would be about two to three years, he said.

As per their observed statistics, 50% of visitors to the theme park are people in their 20s. Hence, Hong Kong Disneyland is trying to entice the young- adult market and increase their profitability.