$1.4B Expansion Planned for Hong Kong Disneyland
- Nov 29, 2016
Hong Kong—Hong Kong Disneyland is about to get a lot more fun. The Walt Disney Co. and the Government of the Hong Kong Special Administrative Region recently revealed plans for the expansion of the 310-acre amusement park. The two entities will share the $1.4 billion development cost.
The multi-phase, multi-year expansion project will enhance HKDL with new themed areas, including a Frozen-themed area, and various attractions. Construction activity will involve the transformation of the property’s Castle and Hub area, and the development of a new entertainment venue for live performances.
“The all-new developments will further reinforce HKDL’s position as a world-class tourist destination for everyone, including families and young adults,” Samuel Lau, executive vice president and managing director of HKDL, said in a prepared statement.
HKDL has been having a good ride. Since its debut in 2005, the amusement park, located roughly 20 miles from Hong Kong on Lantau Island, has seen more than 50 million visitors come through its gates. But it’s not just the thrill seekers who are benefiting from the park. HKDL has created 195,700 jobs since its opening. And in fiscal year 2015, it generated $1.2 billion of value added to Hong Kong, marking 0.42 percent of Hong Kong’s gross domestic product, as noted in the resort’s fact sheet. The planned expansion of HKDL is a welcomed prospect, to say the least.
“In line with the Government’s policy objective on tourism development, and to enhance Hong Kong’s competitiveness amid the intensifying competition in the Asia-Pacific region, we consider that it is the right opportunity to take forward a large-scale and progressive expansion and development plan at HKDL,” Gregory So, the Hong Kong Government’s secretary for commerce and economic development, said in prepared remarks.
Timing is everything. According to a 2016 report by Hong Kong’s Legislative Council, Asia is the second largest theme park market in the world, and it’s only going to get larger as countries target the fast-growing middle class. Over the next few years, a substantial development pipeline will yield new amusement parks across Asia. Projects on the horizon include Legoland Japan, which will open in April 2017; 20th Century Fox World Malaysia, scheduled to welcome its first visitors by the end of 2017; Universal Beijing, which is on track to open in 2019; and the list goes on. Per the Council report, “The expected increasingly competitive landscape among different theme parks in Asia underlines the importance for Hong Kong’s theme park industry to continue developing novel and distinctive elements.”
Keeping up with the Joneses, however, can be expensive. Walt Disney and the Hong Kong Government plan to finance the HKDL expansion with cash equity based on their respective ownership interests. Walt Disney, which owns 47 percent of the amusement park, will provide $650 million, while Hong Kong will contribute the remaining $750 million, representing its 53 percent stake.
The partners expect to reveal new additions at HKDL annually between 2018 and 2023.