The global financial meltdown has certainly been felt by every industry, but it has hit the tourism sector more acutely than some others.With the size of Disney’s destination resort business this has had a significant impact on future planning and marketing across the globe.
G KONG (Reuters Life!) – Hong Kong’s top financial official will meet Walt Disney Co. management in Los Angeles later this week to discuss the stalled expansion of the struggling Hong Kong theme park.
Disney and the Hong Kong government have been embroiled in protracted discussions over financing for a second phase of the world’s smallest Disneyland which could cost a reported HK$3 billion ($387 million).
Opened in 2005, Hong Kong Disneyland has been criticized for being far too small to attract repeat visitors despite its proximity to mainland China. Visitor number projections failed to reach initial bullish predictions, and the Chinese tourist market has since been hit by the economic slump.
Disney meanwhile has signed a framework agreement with authorities in Shanghai to build a park there.
The meeting between Hong Kong Financial Secretary John Tsang and Disney on Friday in Los Angeles follows Disney’s decision last month to put the expansion on hold.
The involvement of such a senior Hong Kong official underscores the importance the government sets on getting negotiations back on track.
“We hope we can maintain positive engagement with Disney on the matter, but it’s hard to predict whether there’ll be a breakthrough after the meeting,” said a government source cited in a report by the South China Morning Post.
In March, Disney said it would put the expansion plans on ice and fire about 30 staff dubbed “Imagineers” who had helped conceptualize and plan the Hong Kong expansion.
“Disney wants the (Hong Kong) government to put in some of the (financing) loan, but the government can’t do it. It’s a very sensitive issue,” a well-placed source close to officials involved in the talks told Reuters.
“Disney’s trying to drive a hard bargain (with Hong Kong) and Shanghai’s an ace in the hole.”
(Reporting by James Pomfret; Editing by Nick Macfie)
You can read the full story at Reuters.com.
Wrapping it up
Despite the economy and Disney’s recent staffing cuts, the company is making money – just not as much as Wall Street would like. This is driving some good decisions and some unfortunate ones. Let’s hope this meeting will be fruitful for all the parties involved.