Apr. 26 (NBD) -- Following the footsteps of Disney parks in the U.S., Hong Kong Disneyland Resort on Wednesday raised ticket prices by around 3 percent, the fifth price increase in the past six years.

Not long ago, its counterpart in Shanghai introduced ticket promotions to attract customers. 

The Shanghai Disneyland has presented a huge challenge to the Hong Kong park since its opening, Lin Huanjie, president of Institute for Theme Park Studies in China, said to NBD. According to him, the high construction expenses result in heavy pressure on the Hong Kong Disneyland's cost amortization, and the theme park should create some ground-breaking attractions with renowned IPs to attract tourists. 

Photo/Shetuwang

Hong Kong Disneyland in deficit for 11 years

The standard park ticket for Hong Kong Disneyland Resort currently starts at 639 Hong Kong dollars (81.4 U.S. dollars). 

This marks the fifth time the theme park has lifted its ticket prices after establishment. In December 2017, the park increased the starting price of standard tickets by about 5.8 percent to 619 Hong Kong dollars.

It is reported that the latest price adjustment is led by climbing operating costs and other factors.

The amusement park, known as the second and most expensive Disney theme park to open in Asia, involved an initial construction cost of 25 billion Hong Kong dollars and follow-up capital injection of 3.4 billion Hong Kong dollars.

However, it wasn't profitable until 2012, when the resort generated a net profit of 109 million Hong Kong dollars, which jumped to 332 million Hong Kong dollars two years later.

But in 2015, the park slumped back into financial losses.

"The high construction expenses of Hong Kong Disneyland, which was caused by the high cost of land and construction difficulties, result in heavy pressure on cost amortization," Lin analyzed to NBD.

Meanwhile, as a resort jointly owned by the Hong Kong government and Walt Disney Company, it is required to pay royalties and management fees to Walt Disney, which pushes up the operating costs.

Besides, the Hong Kong resort is also facing massive cost of equipment repair, renewal, expansion projects and labor cost annually, Liu Simin, head of a tourism institute under the cultural creativity industry research center at Beijing Foreign Studies University, told NBD.

"The opening of Shanghai Disney Resort also poses a challenge to the Hong Kong theme park. The all-new Shanghai resort is winning over visitors from mainland China, one of the major sources of visitors for the Hong Kong park," Lin also said.

Fierce rivalry with counterparts in Shanghai and Tokyo

In contrast to rising ticket prices of the Hong Kong park, Shanghai Disneyland is wooing tourists via ticket promotions.

The Shanghai theme park has launched non-dated bounce back tickets priced at 498 yuan and 199-yuan afternoon tickets that allow visitors to enter the resort after 3:00 pm.

Covering approximately 1,000 acres of the land, the Shanghai park is, according to the company, is the "largest Disney castle park" in the world, three times the size of the Hong Kong resort.

Its first-year business performance exceeded expectations of Disney.

In the year, Shanghai Disneyland saw over 11 million visitors and around half of the park's visitors came from outside Shanghai, Disney CEO Bob Iger revealed.

Welcoming visitors from China and all over the world, the Shanghai park features the largest percentage of new content of Disney facilities. Its exhilarating "Soaring Over the Horizon" experience debut in Shanghai before the opening at California's Disneyland and Disney World in Orlando.

Compared to Hong Kong Disneyland, the Shanghai park is at an advantage for the variety of events, newly constructed amusement facilities and supporting facilities such as Disneytown, Lin Huanjie pointed out.

In addition, its pricing strategy under which different prices of tickets are offered in weekdays, weekends and holidays could be a unique competitiveness of Shanghai resort.

NBD noticed that Hong Kong Disneyland's Japanese rival Tokyo Disney Resort currently sells tickets at lower prices than Hong Kong, with the starting price standing at 7,400 yen (66.9 U.S. dollars). Known as the most profitable Disney theme park in Asia, the Tokyo resort received 32.56 million visits and reaped the ordinary profit of 129.4 billion yen in the 2018 fiscal year ended March 31 of 2019.

Photo/Shetuwang

Unlike Hong Kong Disneyland relying heavily on ticket revenue, the Tokyo resort tends to optimize its profiting model by diversifying entertainment products and strictly insists on quality service offerings.

According to the latest financial results, the Tokyo Disney Resort 35th Anniversary events brought a rise of attendance and boosted merchandise sales of the resort.     

"I am greatly impressed by the personalized service and the hospitality of the workers in the Tokyo resort," recalled Ms. Fu, who paid a visit to the tourist attraction during the Anniversary events this year.

"Tokyo Disneyland's success could be partly attributed to a combination of humanistic service concept of the Japanese operator and Disney's business philosophy," Lin explained.

Ground-breaking attractions themed with popular IP needed

Despite losses for four consecutive years from 2015 to 2018, Hong Kong Disneyland saw a narrowing loss in the fiscal year 2018, which could be a positive sign that it was on its way to be in the black.

The new financial report revealed the Hong Kong theme park's net loss reduced by 84 percent to 54 million Hong Kong dollars.

Part of its effort in attracting visitors and offsetting the operating expenses, the Hong Kong park is expanding with new attractions and experiences under a six-year expansion and development plan starting from 2018.

With a total investment of 10.9 billion Hong Kong dollars from the local government and the parent company, the resort will build two new themed areas and the number of attractions will increase from 100 to more than 130.

The first new offering, "Moana: A Homecoming Celebration" stage show, opened in May 2018. Last month, the Marvel-themed attraction "Ant-Man and The Wasp: Nano Battle!" made its debut in the park.

When asked how Hong Kong Disneyland Resort could further enhance its strength to rival with Shanghai and Tokyo parks, Lin suggested that the Hong Kong resort should create some ground-breaking attractions with renowned IPs, such as The World of Avatar in Disney World in Orlando.

Apart from new facilities, marketing activities and promotions can also be considered for the park, he added.

Email: lansuying@nbd.com.cn