Disney looks to Hong Kong as Euro park falters

Mickey Mouse's European pulling power stalled last year but The Walt Disney Company hopes that the big-eared rodent's appeal will boost income from a new Hong Kong theme park.

Mickey Mouse's European pulling power stalled last year but The Walt Disney Company hopes that the big-eared rodent's appeal will boost income from a new Hong Kong theme park.

Euro Disney, the operator of Disneyland Paris, said yesterday it received 12.5 million visitors in the year to September, unchanged from the preceding 12 months. However, the company, 39 per cent held by Walt Disney, reported a 47 per cent drop in net profits to 23.6m euros as royalty and management payments to Walt Disney were reinstated after a five-year break.

The transfers were halted in 1994, two years after the park opened, as the company's debts and payments systems were restructured. Royalties and management fees totalled 30.9m euros last year. Income before royalties, lease and financial charges rose 2.5 per cent to 920m euros.

Euro Disney noted that margins improved to 21.4 per cent of sales, up from 19.7 per cent, as hotel occupancy rose and guests splashed out more per head and ticket prices rose.

"The increase in guest spending reflected higher average admission prices resulting from the extension of high-season prices through to the end of October ... and other moderate price increases during the year," the company said.

In Hong Kong, Walt Disney trumpeted a theme-park deal with the Hong Kong government after eight months of negotiations. Tung Chee-hwa, the special administrative region chief executive, appeared alongside Mickey and Minnie Mouse to say that his government was prepared to pour HK$22.45bn ($2.9bn) into the venture and associated infrastructure works. Walt Disney will commit about a 10th of that sum, or HK$2.45bn.

The sharply differing levels of input prompted criticism from some Hong Kong legislators and residents, it was reported. "The whole thing is engineered in such a way that they want us just to say 'Oh terrific, terrific! Disney is fantastic, let's not talk about the numbers, let's talk about that some other time'," Christine Loh, the head of the pro-democracy Citizens Party, was quoted as saying.

Government officials contend that the project will help to cut the SAR's 6.1 per cent jobless rate and raise its tourism profile across the region. The SAR government will invest HK$3.25bn for a 57 per cent stake in Hong Kong International Theme Parks. Walt Disney has been awarded management control.

Euro Disney shares fell 0.01 euros to 1.30 euros.