Tourists ride an attraction at Hong Kong Disneyland in October. During China's Golden Week holiday, lines for rides at the park were surprisingly short as ongoing protests in Hong Kong kept tourists away.
Photo: The New York Times
Photo: The New York Times

Profits plunge at Hong Kong Disneyland amid political unrest

Location faces a $275 million drop in operating income

After five months of anti-government protests, Hong Kong's Disneyland theme park is beginning to feel the pinch of dense crowds, blocked roads, street fires and riot police firing tear gas. 

»RELATED: Hong Kong student's death fuels more anger against police

Disney's parks division faces a $275 million drop in operating income at its Hong Kong location during the current fiscal year if the unrest continues, Christine McCarthy, the company's chief financial officer,  told CNN this week. 

Operating income at Hong Kong Disneyland fell $55 million in the previous quarter, while two other Disney theme parks in Paris and Shanghai reported growth. Disney estimates that profit in the current quarter could also fall by as much as $80 million. 

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At the same time, Disney's Studio Entertainment unit on Thursday reported a 66% decline in quarterly profit due to the rollout of its Disney Plus streaming service, which will launch next week. 

»MORE: 'The Lion King,' 'Toy Story 4' help boost Disney's profit

No stranger to slumping profits, Hong Kong Disneyland reported consecutive annual losses in attendance and revenue in 2015 and 2016, which the company blamed on a softening tourism market.

»FROM 2017: Hong Kong Disneyland reports a 2016 loss as visitor slump worsens

Now with Hong Kong’s economy officially in a recession, the territory's tourism industry appears to be on the brink of further decline despite the Disney park bringing in $1.4 billion more business during the fourth quarter, a 17% increase over the previous year. 

In other negative effects of the protests: tourism has dropped 37% in the third quarter and hotel stays also fell 28% year over year, according to Hong Kong's financial secretary. 

The mass protests have stifled the territory since June, sparked by a bill allowing extradition to mainland China that was seen as interference by Beijing in rights guaranteed to Hong Kong when the former British colony returned to Chinese rule in 1997. The protest movement has since expanded to include other demands, including direct elections for the city's leaders. More than 3,300 people have been arrested, and Beijing has indicated it may tighten its grip to quell the unrest. 

— Information from The Associated Press was used to supplement this report.

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