DIS Walt Disney Co

By Chester Yung 

HONG KONG-- Walt Disney Co. is turning to "Frozen" and "The Avengers" to revive its Hong Kong Disneyland theme park.

The company on Tuesday unveiled plans for a US$1.4 billion expansion plan for the park--its smallest. New attractions are set to open nearly each year from 2018 to 2023, including "Frozen" and Marvel Comics-themed areas, a larger, remodeled castle and a new entertainment venue. The total number of attractions would rise to more than 130 from 110 once the upgrade is complete.

Disney will put up US$657 million for the expansion project, while the Hong Kong government, which has a 53% stake in the park, will contribute US$747 million in the form of cash equity injection.

The latest expansion plan also involves the closure of some existing rides, with the company converting around 17% of existing park space for the new additions. The classic Disney ride Autopia closed earlier this year, while the Buzz Lightyear Astro Blasters will be "reimagined," per Disney parlance, or redressed into an attraction based on Marvel superheroes.

It hasn't been a happy time for what is known as the happiest place on earth. Hong Kong Disneyland has been suffering from declining attendance and weak financial results. The theme park posted its first loss since 2011 last fiscal year, as China's economic slowdown hurt Hong Kong's tourism market.

The park recorded attendance of 6.8 million people for the fiscal year ended early October 2015, down from 7.5 million a year earlier. The company said there has been some improvement since the summer.

In the nine months to September, the number of visitors to Hong Kong from mainland China--which accounts for about three-quarters of total tourists in the city--fell 8.7% from a year earlier to 31.72 million, according to the Hong Kong tourism board. For the same period, total visitors to Hong Kong fell 6.1% to 41.72 million.

Another challenge facing Hong Kong Disneyland is a shiny, new rival: the much larger, $5.5 billion-plus Shanghai Disneyland, the third Disneyland in Asia, which opened in June. The company denies the competition has had any negative effect on its Hong Kong park.

"We haven't seen an impact from Shanghai," said Samuel Lau, managing director of Hong Kong Disneyland. "In the summer, Shanghai actually helped us because it brings the Disney brand into Asia. ... There's much more awareness of the Disney brand in Asia."

The expansion plan is subject to approval from both the Hong Kong legislature and Walt Disney's board of directors. Legislative approval could be an obstacle, as opposition lawmakers have been filibustering government initiatives recently.

To address earlier criticisms that the park was too small, Disneyland's owners have added attractions and expanded areas in the park. A third hotel is planned to open by mid-2017.

Hong Kong Disneyland was largely modeled after the original Disneyland park in Anaheim, Calif. Even the iconic castle is the same, but it is far smaller than the one in Shanghai.

The Hong Kong government said Tuesday that both parties remain in discussions for a second theme park next to the existing Disneyland.

Jeffrey Ng contributed to this article.

Write to Chester Yung at chester.yung@wsj.com

(END) Dow Jones Newswires

November 22, 2016 05:41 ET (10:41 GMT)

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