- Bosses have outlined HK$10.6 billion plan to rejuvenate the theme park, but lawmakers are balking at the bailout
- The Post looks at the details of the proposal, how Ocean Park got to this point and the questions still to be answered
Hong Kong's cash-strapped Ocean Park faces an uphill battle to secure the legislature's approval for a HK$10.6 billion (US$1.4 billion) bailout.
With just HK$400 million in the bank, senior management at the theme park warned it would run out of money this year without fresh capital, blaming the downturn partly on intensifying competition in the region.
But the ambitious proposal to revamp the attraction was met with widespread scepticism as one lawmaker dubbed it "a failed business", while some feared the debt burden would endure even with the cash injection.
What is the HK$10.6 billion plan?
Aimed at turning the amusement park into an adventure-themed resort, the government-backed plan strives to make better use of its scenic shoreline while appealing more to families.
The 43-year-old park in Aberdeen would be divided into seven themed zones, embracing a total of more than 20 new attractions by 2027.
More than 10 existing popular attractions would be upgraded or remodelled, with others demolished.
One highlight would be a new section called Azure Bay,which under the plan would boast a pier from where visitors could board ferries to a new promenade at Deep Water Bay and Tai Shue Wan. En route, passengers could enjoy the coastal scenery around the south of Hong Kong Island.
Another zone Ocean Square " providing dining and retail facilities " would be open to the public without paying an entrance fee.
The park's deputy chairman Lau Ming-wai said the business would make good use of tree houses and campsites in that area to help them tap into the study tour market.
HK$10.6 billion plan to bail out Hong Kong's ailing Ocean Park
Attendances at Ocean Park are expected to rise from 5 million in the financial year 2022-23 to 7.5 million in 2027-28, which comes close to its 7.7 million record posted in 2012-2013.
Bosses also stated the park would not be able to repay HK$2.3 billion in commercial loans, and another HK$3.67 billion owed to the government, both due within two years.
Part of the proposal includes an eight-year delay in repaying the government.
A failed business?
The amusement park unveiled its proposals last month after scrapping an annual salary review for some 2,000 full-time staff for 2020, amid a tourism downturn triggered by the ongoing anti-government protests in the city.
The policy, along with measures such as reining in operating and discretionary expenses, was the park management's response to its sharp plunge in visitors numbers in the later half of 2019.
On January 20, the park's chief executive Matthias Li Sing-chung revealed in a Legislative Council panel meeting: "We now have HK$400 million in cash."
The shocking revelation of the paltry sum sparked criticism from pro-establishment lawmaker Regina Ip Lau Suk-yee, who is also an executive councillor.
"But you owe debts amounting to billions," the New People's Party chairwoman said. "If you were an actual business, you would have gone bankrupt. This is a failed business."
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Holden Chow Ho-ding, vice-chairman of the city's largest pro-establishment party, the Democratic Alliance for the Betterment and Progress of Hong Kong, said it would be relatively hard to support the proposal with the information provided, and asked whether a short-term revival plan should be worked out first.
But the park's chairman Leo Kung Lin-cheng insisted the time had passed for simply making minor changes.
While the pro-democracy camp's Civic Party opposed the proposal, the park had received the government's backing.
Commerce minister Edward Yau Tang-wah said he had faith in the home-grown brand of Ocean Park, and its prospects under the plan.
Where did it go wrong for Ocean Park?
The theme park's performance has slipped over four consecutive years, with waning visitor numbers, a lack of new major attractions and growing regional competition blamed.
The number of visitors to the park have fallen from 7.6 million in 2014 to 5.7 million last year. The deficit ballooned from HK$241.1 million in 2016 to HK$557.3 million last year.
It has lost money four years in a row to 2018/2019, even as Hong Kong was breaking records for tourist numbers in 2018.
Former chairman Allan Zeman, who was known for cosplaying as a dolphin, an octopus and even a vampire to promote the park during his time at the helm, sensed changes in the venue's atmosphere after his departure in 2014.
"Maybe after I left, I didn't see the same kind of vibrancy," he said.
Brian King, associate dean of Polytechnic University's school of hotel and tourism management, said Ocean Park had tried to work as a commercial theme park and a site for wildlife conservation.
"That formula has not been working well in that highly competitive environment," he said.
Last year, anti-government protests in Hong Kong sparked by the now-withdrawn extradition bill dealt another heavy blow to the attraction.
Its guest numbers plummeted by over 30 per cent to 1.9 million, from the period between July and December 2018 to the same months last year.
The park added that if the trend continued, attendance would drop by more than 40 per cent to 3.3 million in the year to June.
More bad news emerged last month when the park's management revealed its state-of-the-art water park attraction had exceeded its HK$2.29 billion budget by more than HK$1.4 billion.
Its opening, which is now due this year, has been delayed by about three years. The extra cost of that saga is not dealt with in the latest expansion plan.
The park's plight has been shrouded in yet more uncertainty by its closure since January 26, for an indefinite period, as a precaution against the spread of the coronavirus.
How are its rivals performing?
King, of PolyU, said a threat to the park was competition from Chimelong Ocean Kingdom, which opened in 2014 in Zhuhai, mainland China, and had already welcomed 5.5 million guests in its first year.
Ocean Park bailout will do more than 'stop the bleeding': tourism chief
The two parks share similar positioning and branding, he said.
According to a report published by Themed Entertainment Association and the Economics practice at AECOM, a consultancy firm, Chimelong ranked 10th in the world for attendance in 2018, with 10.83 million guests.
The figure was 1.87 times that of Ocean Park's, which came 20th in that report.
"As soon as Chimelong came aboard, Ocean Park has not managed to compete effectively," King said.
He noted Ocean Park was also dependent on mainland travellers, who would find the Zhuhai entertainment hub easier to visit.
The same firm was behind the design of both Chimelong and Ocean Park's Grand Aquarium, he added.
What are the unanswered questions?
Lawmakers have demanded more information and justification for the HK$10.6 billion plan. There are no details available for the individual price tags of each of the planned attractions.
King said the proposal was about getting customers to increase how much they spent rather than just filling the park with large numbers of people.
"Can they get back to these (attendance) numbers? Probably. But the question is more on can they get the economic impact by persuading these visitors to spend a lot, a lot more," he said.
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