Hong Kong’s Ocean Park hanging on by its government lifeline after revenues fall 59 per cent, operating deficit doubles

Kathleen Magramo
·4-min read

Revenue at Hong Kong’s Ocean Park has plunged by 59 per cent and its operating deficit has doubled, according to its latest annual report, following a financial year marked not only by extensive coronavirus-related closures, but also months of anti-government protests.

The report, released on Wednesday, showed Ocean Park’s deficit for the year ending on June 30 had risen to HK$1.17 billion (US$151 million) from HK$588.1 million the previous financial year.

However, thanks to a multibillion-dollar government lifeline extended to the ailing attraction in May, the park was able to pay off massive debts, and end the financial year with a net surplus of HK$1.92 billion.

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The most recent year’s losses were just the latest in a string of shortfalls for the park in Wong Chuk Hang. It lost HK$557.3 million in the financial year ending June 2019, and HK$236.5 million the year before.

A government bailout allowed the park to finish the latest financial year in the black. Photo: Winson Wong
A government bailout allowed the park to finish the latest financial year in the black. Photo: Winson Wong

The theme park recorded 2.2 million visitors in the 12 months to June 30, down over 61 per cent from the previous year under the double whammy of the coronavirus pandemic and last year‘s social unrest.

The park was forced to shut down twice – closing for a total of 139 days – during the last financial year due to the government‘s social-distancing rules. More recently, it was asked to close a third time on December 2, and remains shut until further notice.

As visitor numbers dwindled, the park’s overall revenue fell 58.7 per cent year on year to HK$717.1 million. Income from ticket sales was down 63.8 per cent, to HK$413.4 million.

“Market conditions deteriorated rapidly and Ocean Park was not immune to the unavoidable impact of the Covid-19 crisis, despite taking proactive emergency cost-saving initiatives,” Ysanne Chan Sein-yu, Ocean Park’s chief executive officer, said in a statement.

Ocean Park chief executive Ysanne Chan (right). Photo: May Tse
Ocean Park chief executive Ysanne Chan (right). Photo: May Tse

In May, the struggling theme park was bailed out by taxpayers when the legislature approved a HK$5.4 billion relief fund to keep it afloat for another 12 months.

So far, some HK$3.07 billion of that money has been received, and went towards repaying commercial loans and related financing costs for the park’s Tai Shue Wan Redevelopment Project, which includes a new water park, according to the annual report.

Chan said the park had deployed the government assistance in “the most prudent way” possible.

“All of the park’s programmes and events were carried out in an agile and fast-turnaround manner to allow flexible activation and budget management,” she said, adding that such measures had cut operating costs by 17.1 per cent, to HK$1.28 billion.

A notice board reminds Ocean Park visitors of measures in place to prevent the spread of Covid-19. Photo: Edmond So
A notice board reminds Ocean Park visitors of measures in place to prevent the spread of Covid-19. Photo: Edmond So

Tourism sector lawmaker Yiu Si-wing said the theme park had to find new revenue streams to make up for its soaring operational costs and expensive expansion projects.

“It would be extremely difficult for Ocean Park to survive for the next six months, even with their current surplus,” Yiu said, “They’re operational costs are still high and tourism does not seem to have any signs of recovery either.”

With Ocean Park barely hanging on, Yiu said its future would depend on the government’s new directive for the 43-year-old attraction.

Hong Kong Chief Executive Carrie Lam has floated proposals to revamp attractions in Southern district, including Ocean Park. Photo: AFP
Hong Kong Chief Executive Carrie Lam has floated proposals to revamp attractions in Southern district, including Ocean Park. Photo: AFP

In her annual policy address last month, Chief Executive Carrie Lam Cheng Yuet-ngor unveiled the “Invigorating Island South” initiative, which included proposals to remake Southern district into a leisure and tourism hub. One of the measures was a potential tie-up between Ocean Park and the iconic Jumbo Floating Restaurant, which was donated to the park after it was forced to close its doors earlier this year.

The Island South plan would also involve revitalising Ocean Park by focusing on its strengths in education and conservation.

Still, the attraction is facing bleak tourist arrivals for the foreseeable future, as the city’s border with the mainland – the source of many of the park’s patrons – remains largely closed.

This article Hong Kong’s Ocean Park hanging on by its government lifeline after revenues fall 59 per cent, operating deficit doubles first appeared on South China Morning Post

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