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HK Disney falls short on promises - The Standard, 2/9/07


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  • HK Disney falls short on promises - The Standard, 2/9/07

    Problems continue to plague Hong Kong Disneyland, whose low attendance numbers fell even more this quarter toward levels that will see the Disney company break performance promises with its lenders.

    The company said the Hong Kong park drew fewer visitors from October to December 2006 than in the same period the previous year amid otherwise stellar first-quarter fiscal year 2007 results. Attendance and sales at the park also fell short of projections.

    "If these trends do not significantly improve," Hong Kong Disneyland will not meet performance promises it made to bank lenders, Disney said in a filing with the US securities regulator.

    Disney will then be forced to refinance the US$294 million (HK$2.29 million) in debt taken out for the park.

    "The early going in Hong Kong has been more challenging than we had hoped," Disney chief financial officer Tom Staggs told analysts gathered at Walt Disney World in Florida for the company's 2007 investor conference.

    "The decreases at Hong Kong Disneyland ... were primarily due to lower attendance and guest spending," the company said in its report.

    Disney executives in California and Disneyland representatives in Hong Kong have long insisted that the park was doing well. But during an investors' meeting to discuss the first-quarter results, the company admitted changes are necessary.
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