How Does The 43 Year Old Hong Kong Ocean Park Survive The Middle Age Crisis?

In response to the news from the outside world that the ocean park has entered the 21st century, it is said that it is a long time since the beginning of the 21st century.

What makes Cheung lung or Hong Kong Ocean Park fall into the rumor is the data disclosed by ocean park at the beginning of the year from 2019 to 2020. Among them, Ocean Park has owed the government subsidiary loans and commercial loans as high as HK $5.09 billion, and the interest payable is close to HK $1.28 billion. Meanwhile, the annual cash deficit generated by its operation will exceed HK $600 million.

And then a new coronal pneumonia epidemic made Hong Kong Ocean Park ushered in an unprecedented "middle-aged crisis" when she was 43 years old.

Ocean Park has always been one of the most popular tourist attractions in Hong Kong. It was opened in January 1977 and was funded by the Hong Kong Jockey Club. After that, it became independent from the Hong Kong Jockey Club and was responsible for its own profits and losses.

In 2005, the ocean park launched a new development plan with a cost of 5.55 billion Hong Kong dollars. The number of scenic spots and amusement games in the park increased from 35 to 80, divided into eight major theme areas, and became one of the most popular theme parks in the world with the largest number of visitors. The applause award was also awarded in 2012. Since its opening, the ocean park has received more than 140 million tourists.

Now, it has to face the problem of debt restructuring for many years.

A travel agent told the 21st century economic reporter that the operation mode of Ocean Park has hardly changed over the years, and little has changed in the past few decades. The number of Hong Kong local tourists actually attracted is relatively small. All of them are mainly mainland tour groups. However, with the rise of mainland theme parks such as Chimelong, its competitiveness has been weakened.

At that time, the youth was proud

If the theme of Hong Kong's Ocean Park has gradually become a model for the development of the ocean park, it is said that the theme of Hong Kong's Ocean Park has gradually grown from a model of adventure to a world of adventure. For many older Hong Kong people, going to Ocean Park has become an indispensable happiness in their childhood memory.

The ocean park was opened on January 10, 1977. It was originally funded by the Hong Kong Jockey Club and managed by the Jockey Club. In the first half year of the opening ceremony, more than 1.31 million people entered the ocean park.

In January 1979, Haiwei, a killer whale, was introduced into ocean park, which became a selling point of Ocean Park. Since 1980, more facilities such as the swimming Park and the water park were built.

On July 1, 1987, Ocean Park separated from the Jockey Club and became a non-profit organization. In order to increase the number of visitors, Ocean Park also began to add new projects. In 1999, the park received two giant pandas as gifts and introduced more large-scale mobile games, such as skyhoppers and cross mine flying cars.

Ocean Park launched a new development blueprint in 2005. The number of scenic spots and mobile games doubled from 35 to 70. In 2007, the number of visitors reached 4.9 million, ranking 16th in the world and 5th in the Asia Pacific region. In 2009, the number of visitors to the ocean park jumped to the 14th in the world, the 5th in Asia and the 1st in China.

In 2005, Hong Kong Disneyland just opened. In the following years, Hong Kong Ocean Park continued to dominate Disneyland with differentiated competition, so that Sheng Zhiwen, the then CEO, was known as "Mickey mouse killer".

At the beginning of 2009, the giant panda aquarium, one of the largest zoological projects in Asia, was launched in 2011.

In 2011, the layout of Hong Kong Ocean Park was divided into seven regions. Shanxia garden is connected with Nanlang mountain by cable car and ocean train opened in 2009. Nanlang mountain and Dashu Bay are connected by climbing elevator, which is the second longest outdoor escalator in the world.

At that time, the reason why Ocean Park was able to win a place in the competition of theme parks was that its strategic thinking was simple and clear. It took a differentiated route for Disneyland, focused on cultivating Hong Kong people's feelings for Ocean Park, and vigorously developed the mainland market.

In 2014, all the visitors from Guangdong and its surrounding areas were from the mainland, except for Shanghai. Since 2003, Ocean Park's marketing expenses for the mainland have risen from 5% to 30%. In 2006, it opened a representative office in Guangzhou. In addition to publicity with many consumer brands, such as Carrefour, Coca Cola, KFC, China Merchants Bank and UnionPay, it also actively attracted domestic tourists through SMS and Internet.

However, from 2014 to 2014, the profit of Ocean Park was at the turning point. Compared with the data of Hong Kong Disneyland, it is coincidentally that the highest number of visitors also appeared in 2014, which reached 7.5 million person times. At the same time, it achieved the best performance in the past, with business income of HK $5.466 billion and profit of HK $332 million. In 2013, Disneyland was profitable for the first time in Hong Kong. 2014 was the second year of profit.

However, since 2015, Hong Kong Disneyland has also suffered losses for four consecutive years, with no more than 7 million tourists per year. As the world's smallest Disneyland, the loss does not forget to expand every year. At the same time, the ranking of Hong Kong Disneyland is also moving forward, up to 17th.

In 2014, 60.84 million tourists visited Hong Kong, and in 2018, 65.15 million people visited Hong Kong. The number of visitors increased by 7%, but the number of visitors to Hong Kong's two major theme parks was less. Tourists from the mainland account for 77% of the tourists visiting Hong Kong. Over the years, the proportion of tourists in Hong Kong Ocean Park is about 4:4:2 in the mainland, Hong Kong and overseas.

The ocean park of "youth pride" did not continue its previous scenery, because the number of tourists in the mainland decreased, the equipment was outdated, the business model was relatively simple, and the number of similar competitive categories increased, Ocean Park began to face more and more challenges.

Transformation under the middle age crisis

The first high point of the middle-aged debt crisis is exposed at sea park.

Since 2005, Hong Kong Ocean Park has borrowed nearly HK $5.5 billion from the Hong Kong government and businesses for new expansion projects. By 2013, it has borrowed another HK $2.29 billion from the government to build a new water park, involving a total of about HK $7.8 billion. Of the two loans, the government lent a total of HK $3.67 billion, and the remaining over $4 billion were commercial loans (some of which were guaranteed by the government).

According to the annual report of Ocean Park from 2018 to 2019, Ocean Park owes HK $6.37 billion in government subsidiary loans, commercial loans and interest. By fiscal year 2019, Hong Kong Ocean Park has lost money for four consecutive years. Heavy debt has become an important reason for Ocean Park to make ends meet.

On May 11, the Secretary for commerce and economic development of the Hong Kong SAR government, Mr Yau Teng Hua, said that the SAR government had applied to the Legislative Council of the SAR to allocate HK $5.4 billion to Hong Kong Ocean Park to support its operation. Otherwise, the park might face the risk of bankruptcy in June.

On May 29, 2020, the Finance Committee of the Legislative Council of the Hong Kong Special Administrative Region deliberated and approved the proposal of "allocating HK $5.42 billion to Hong Kong Ocean Park", which will assist the park to continue its operation for 12 months, and redefine its future development strategy during this period, so as to help the park tide over the difficulties. On June 26, the government of the Hong Kong Special Administrative Region appointed Liu Mingwei as the new chairman of the board of directors of Ocean Park Corporation. The new leading group will re plan the orientation and development direction of the park.

On the other hand, Hong Kong's marine park also faces many challenges in terms of profitability.

The theme park has to face a common ordeal of middle age is maintenance. According to public information, the latest renovation of Ocean Park was eight years ago. In 2019, Kong Lingcheng, then the president of Hong Kong Ocean Park, once said that due to the damage caused by super typhoon Shanzhu and other factors, the maintenance expenses increased greatly, as well as various expenses related to the depreciation of new infrastructure and new facilities, which led to the increase of operating costs of Ocean Park.

In addition, Hong Kong Ocean Park also needs to face the fierce competition caused by the increase of theme parks in the region.

In the list of theme parks of the United Kingdom of Disneyland (AECOM) and the United Kingdom of Disneyland (AECOM) ranked No. 8 in the global theme list, respectively, with the theme research institutions of the United Kingdom of Disneyland (AEA), the United Kingdom of Disneyland (AECOM) and the United Kingdom of Disneyland (AECOM), respectively, ranked the third in the list of themes Bit. Hong Kong Ocean Park only ranked 20th.

"In addition to attracting mainland tourists from the surrounding areas and weakening the demand for Hong Kong Ocean Park, many Hong Kong tourists will also prefer to visit Zhuhai." As far as the ocean park of Hong Kong is concerned, there is a direct competition between Ocean Park of Hong Kong and Ocean Park of Hong Kong. In 2014, Zhuhai Chimelong ocean Kingdom officially opened to the outside world. As the world's largest ocean theme park, it received 8 million tourists in that year. In 2018, the annual number of tourists received exceeded 10 million for the first time, ranking 11th among tea global theme parks. The theme of ocean kingdom is to invest more than 50 billion yuan in the ocean kingdom. What's more, Zhuhai Changlong has an advantage in terms of customs clearance convenience. "

Haichang Ocean Park is the largest marine theme park and supporting commercial property developer and operator in China. It has the largest animal population in the industry, with more than 66000 marine organisms. The conservation level and operation management level are in the leading position in the industry. From the first Ocean Park in 2002 to Sanya dream ocean night city in January 2019, Haichang ocean has 8 ocean theme parks and 3 comprehensive entertainment theme parks.

Meanwhile, visitors to Ocean Park are disappearing.

Since June last year, the social unrest in Hong Kong has reduced the number of visitors to Hong Kong. The number of inbound tour groups and free pedestrians in Hong Kong Ocean Park decreased by more than 60% from July to December 2019. In order to encourage employees to share difficulties with the park in difficult times, Ocean Park will distribute 600 yuan and 300 yuan red envelopes to full-time and part-time employees respectively in the spring and new year, with the amount reduced by half compared with last year.

This year, affected by the epidemic, Hong Kong has been closed for nearly three months, and Hong Kong Ocean Park has also announced its closure in January. At the same time, due to the severe business environment, the park has implemented a number of cost control measures, including "freezing salary" and encouraging employees to apply for unpaid leave or early retirement without affecting the daily operation, including animal care, service and performance activities, and the safety of tourists.

Li Shengzong, chief executive officer of Ocean Park, told the media on May 8 that the park has lost 1 million passengers since its closure, greatly affecting its income and worrying that the capital flow will not last until September. Li Shengzong himself will retire in July.

Liang Zhenying, the former chief executive of Hong Kong, once said publicly on social media that "the financial difficulties of Ocean Park may have management problems, but no one seems to have discussed a very important factor external competition. In 2013, Chimelong ocean Kingdom, located in Zhuhai, was opened. The ocean park in Hong Kong is no longer a single market business. Mainland residents do not need to apply for a pass to visit. Today, seven years later, Chimelong covers an area of 2000 mu, with 5000 hotel rooms and more than 10 million visitors per year. Now there are expansion plans. If you are concerned about the survival of the ocean park, you are advised to study with a learning attitude. ”

"The ocean park is in danger. In fact, the problem is not complicated. If the epidemic situation passes after two or three months, and mainland tourists are mobilized again, will there be another demonstration and disturb tourists in the park? These answers all determine the life and death of Ocean Park. In the past, some banks borrowed money from Ocean Park, but now they don't, why? Let's look at the feasibility of government funding for Ocean Park in a completely uncomplicated way of thinking: if the government pays off all the debts or write off the debts, and then sends out the whole ocean park for free (but it is not allowed to stop operation), will any businesses dare to accept it? I think it's time for the government to let go. We can't afford this hole financially. The sightseeing ocean park without mainland tourists must be closed down. " Mr Leung said.

It seems that the theme of Hong Kong's misfortune will not escape.

According to public data, as of the end of September last year, Hong Kong Disneyland had a net loss of about HK $105 million in fiscal year 2019, a sharp increase of 94% compared with a net loss of HK $54 million in 2018.

In contrast, Hong Kong Disneyland held an online press conference on April 12 and released its performance report. According to the report, between October 2018 and September 2019, the revenue of Hong Kong Disneyland remained at HK $6 billion, which was the same as that of fiscal year 2018. In the first nine months of fiscal year 2019, that is, from October 2018 to June 2019, Hong Kong Disneyland performed strongly, with revenue up 11% year-on-year, admission increased by 5% and hotel occupancy increased by 8%.

Yang Shanni, chief executive officer of Hong Kong Disneyland, said that the public security problems caused by the social unrest in Hong Kong in the second half of last year severely damaged the local tourism industry and affected the performance of Hong Kong Disneyland from July to September last year. As a result, the annual profit before interest, tax, depreciation and amortization of the park decreased by 17% to HK $1.1 billion, with a net loss of HK $105 million.

Under the middle-aged crisis, Hong Kong Ocean Park began to accelerate its transformation.

Hong Kong Ocean Park plans to transform its traditional theme park into a resort with education and conservation functions, the Secretary for commerce and economic development of the Hong Kong SAR government, Mr Yau Teng Hua, said on May 21.

According to its introduction, the ocean park will consolidate and give full play to its advantages in education and conservation, and devote itself to relevant research and promotion; it will break away from the traditional theme park mode, reduce the construction or investment in amusement games and other facilities, and build into a resort and leisure area relying on the natural and cultural landscape of the Southern District of Hong Kong Island.

In addition, in terms of operation mode, the ocean park will re-examine the five aspects of fund source, operation mode, legal framework, land use and Southern District development, so as to make the park more flexible in terms of revenue and expenditure, avoid the appropriation from the SAR government, and make the operation more flexible.

At the same time, we will consider changing the scale of the marine park management and the business model, or we will change the business model of the marine park and other business organizations, and at the same time, we will reduce the scale of the operation of the marine park.

People in the industry believe that the development of marine parks will be accelerated in the future.

Supporting the commercialization of the park is not necessarily the same as privatization and marketization. For example, in terms of operation and appointment of management, market elements can also be added to increase the motivation of the park to pursue maximum interests. Since the Ordinance stipulates that the members of the park's board of directors are appointed by the chief executive, the Hong Kong government, while retaining this power, may consider adding assessment criteria for board members, such as attendance and income growth, as factors for renewal or accountability during the appointment period; or, in addition to the board remuneration, a reward and punishment mechanism should be added to measure the park's financial performance.

?