The fifth Disney Park (others are in Orlando, Anaheim, Tokyo, and Paris) Is due to open in Hong Kong in 2005 or 2006. The cost of building the park will exceed US $3 billion. However, Disney itself is only investing around US $314 million, for which it will receive a 43 per cent share in the park (Far Eastern Economic Review, 23 January 2003). In other words, it will not have a controlling interest in the new park. Hong Kong Government (Disney’s partner) is investing some HK $22.45 billion in the project, as follows: * $3.25 billion in equity in the project;
* $5.6 billion loan to be repaid over 25 years with interest; * $13.6 billion in land works and infrastructure costs.
The company is looking for most visitors to come from Hong Kong and mainland China rather than relying on inbound foreign tourists. Data from the Far Eastern Economic Review in January 2003 seems to indicate that this may be correct. For example, it states that: * 6.5 million mainland Chinese tourists visited Hong Kong in 2002, compared to 4.4 million in 2001, a growth rate of nearly 50 per cent; * 50 per cent of mainland Chinese tourists in Hong Kong visited the destinations’ existing theme park, Ocean Park; * 42 per cent of the mainland Chinese tourists to Hong Kong came from the neighbouring province of Guangdong; these people would be unlikely to visit a Shanghai-based park instead; * Mainland Chinese tourists spent, on average HK $5169 in 2001, more than any other market.
Disney expects to earn around US $100 million per annum from its involvement in the park, around 3 per cent of all the revenues of the corporation (Far Eastern Economic Review, 23 January 2003). Benefits the Hong Kong Government is expecting from the Park: * It has been estimated that the project will inject around HK $148 billion into the local economy over a 40-year period, including all the multiplier effects such as salaries, employees spending, extra business for...