Ocean Park gets roughly the same number of visitors as Hong Kong Disneyland, but its income has been anything but similar to that of the rival.
The marine-themed tourist attraction said last week that it posted a HK$240 million deficit for the year ended June 2016, its worst showing in 29 years and marking the first loss since 2003 when Hong Kong was battered by SARS.
Attributing the dismal result to a sharp drop in mainland China visitors, the company announced a 13.8 percent hike in ticket prices in a bid to shore up revenue.
Ocean Park received about 6 million visitors in the year, not too far off from the 6.8 million recorded by Disneyland in 2015.
But if you look at the financials, the former booked sales income of just HK$1.6 billion, a fraction of Disneyland’s HK$5.1 billion.
How did the big gap arise?
The answer lies in the revenue composition.
Up to 70 percent of Ocean Park’s revenue was generated from ticket sales, while goods sales and restaurant revenue made up only 9 percent and 16 percent respectively.
In the case of Disneyland, the contribution of non-ticket income has been far higher.
Though Disneyland hasn’t provided detailed breakdown of its revenue, various studies based on other Disney parks around world showed that a Disneyland park typically generates 30 percent of revenue from tickets, 30 percent from souvenir sales and 40 percent from restaurants and hotels.
While you can find cheap fast food like hot dogs and sandwiches inside Ocean Park, visitors largely have to eat in restaurants when they go to Disneyland. Expenditure on a day’s meals and snacks can easily exceed the park entry ticket price.
Also, Disneyland has a big portfolio of Intellectual properties, like Mickey Mouse, Winnie the Pooh, Snow White, the Frozen, Star Wars, etc. A toy can sometimes cost as much as the ticket price, but still one finds long queues at its souvenir shops.
By comparison, apart from Whiskers, Ocean Park has few other offerings.
Another key difference is availability of hotels.
Disneyland has two hotels inside the theme park, boasting thousand rooms that charge HK$2,000 a night, and they are usually fully occupied. Ocean Park has no accommodation facility at all.
No wonder, Disneyland can generate about HK$750 of income per customer, versus HK$268 in the case of Ocean Park.
Though Ocean Park has a lot of catching up to do, things are set to improve as construction of its first hotel will be completed next year. The company is also planning extended service hours at some new facilities.
As for intellectual properties, the theme park can perhaps draw on the strength of iconic local comics and popular indigenous cartoon characters.
It will be interesting to see if the company takes all the needed steps to plug its shortcomings.
This article appeared in the Hong Kong Economic Journal on Dec. 9
Translation by Julie Zhu
[Chinese version 中文版]
– Contact us at [email protected]