Ocean Park in Hong Kong will seek government support for a HK$10 billion (US$1.3 billion) rescue plan to reinvent the beleaguered attraction in the face of financial turmoil and strong competition from across the region, the Post has learned.
A source with knowledge of the package said the 43-year-old resort in Southern district needed an immediate cash injection to stay afloat after falling visitor numbers in the four consecutive years to 2019 brought its finances to the brink.
A war chest was also required to fund a major upgrade over the medium term so its attractions could compete with rivals in China and across the Asia-Pacific, the source added.
“It needs fresh blood after suffering huge losses last year and this year,” the source said. “Every single month, it has lost a fortune.”
Ocean Park faces competition from the city’s other theme park, Hong Kong Disneyland resort on Lantau Island. Both are being squeezed by rival attractions over the border, such as Chimelong Ocean Kingdom in Hengqin, Zhuhai.
The park in the south of Hong Kong Island, which at one stage received donations from the Hong Kong Jockey Club, operates as a non-profit organisation and on a site provided for free by the government, which appoints its board members.
The government has a 53 per cent stake in the city’s Disneyland attraction, with Walt Disney in the United States owning the rest.
Ocean Park’s latest troubles were exposed last week when it revealed cost-control measures following a 60 per cent plunge in visitor numbers between July and December last year on the same period in 2018.
The park scrapped an annual salary review for some 2,000 full-time staff for 2020 and imposed measures such as reining in operating and discretionary expenses, stricter energy conservation and suspending all but essential recruitment in a bid to avoid redundancies.
Since June last year, Hong Kong has been ravaged by unrest sparked by the now-withdrawn extradition bill, with radical protesters and riot police trading petrol bombs and tear gas in often-violent demonstrations.
The chaos has had a devastating impact, with preliminary statistics from Hong Kong Tourism Board showing visitor numbers in 2019 were down 14 per cent to about 55 million. More than 40 jurisdictions have issued warnings on Hong Kong travel.
The park said it expected market conditions to remain unpredictable, with no quick rebound in sight.
Tourism sector lawmaker Yiu Si-wing said changes at the park were long overdue.
“We have seen it lose money for some years, visitor arrivals continue to drop, and more competition arising from across the region,” said Yiu, who did not reveal any details of the HK$10 billion rescue plan.
Visitor numbers at the park has fallen from 7.6 million in 2014 to 5.7 million last year. The deficit snowballed from HK$241.1 million in 2016 to HK$557.3 million last year.
Yiu said it was not unusual for the government to support theme parks financially.
A case in point was Disneyland’s HK$10.9 billion expansion that saw the Legislative Council approve taxpayers’ funding of HK$5.45 billion in 2017, Yiu said.
In 2018, the government bailed out Ocean Park with HK$310 million, which was used to fund conservation education initiatives in science, technology, engineering, arts and mathematics.
The park’s HK$10 billion funding bid will be discussed at a Legislative Council meeting on January 20.
Pan-democrat lawmaker Alvin Yeung Ngok-kiu of the Civic Party, who did not reveal any details of the rescue plan, said the park and the government needed to convince the public the proposals were acceptable.
“It involves a big amount and is a very ambitious plan,” he said.
A spokeswoman with the Commerce and Economic Development Bureau said the park submitted a strategic repositioning plan to the government to enhance its competitiveness, with details to be set out in a government paper to the Legco meeting.
Ocean Park declined to comment.
More from South China Morning Post:
- Hong Kong’s Ocean Park will freeze salaries to avoid lay-offs with visitor numbers slumping 60 per cent as protests take hefty toll
- Hong Kong protests and Typhoon Mangkhut prove a perfect storm for Ocean Park as deficit more than doubles to US$72 million
This article Ocean Park to seek Hong Kong government help for HK$10 billion bid to revive ailing resort first appeared on South China Morning Post