Disney Halts Hong Kong Design Work, Raising Government Tensions

Walt Disney Co., the second-largest U.S. media company, halted creative and design work on the expansion of its Hong Kong theme park, leading to 30 job cuts and raising tensions with Hong Kong’s government.

The theme-park operator said it still hasn’t reached an agreement with the government on an expansion plan after two years of investment and negotiations. The city government, which owns 57 percent of the venture, said the cuts aren’t conducive to the talks.

“The uncertainty of the outcome requires us to immediately suspend all creative and design work on the project,” Leslie Goodman, executive vice president of Walt Disney Parks and Resorts’ worldwide public affairs, said in a statement today.

Hong Kong’s government is “puzzled” by Disney’s decision, the Commerce and Economic Development Bureau said in an e-mailed statement today. “We have expressed grave concern about the decision and urged the company to reconsider.”

Both Alannah Hall-Smith, a Disney spokeswoman, and B.C. Lo, Hong Kong Disneyland’s vice president for public affairs, declined to add to Goodman’s comments in phone interviews today.

Hong Kong Disneyland, which is operated by Hong Kong International Theme Parks Ltd., planned to expand the park by a third to attract visitors, Managing Director Andrew Kam told reporters in December.

The park, which opened in September 2005, attracted 14.5 million visitors in its first three years, Kam said in January. The number of tickets sold rose 8 percent to 4.5 million in the year ended September, he said.

The park increased ticket prices by as much as 19 percent last month, the first adjustment since it opened.

Hong Kong’s tourist arrivals will probably fall 1.6 percent in 2009 from a year earlier to 29 million, according to the Hong Kong Tourism Board.

“The government still hopes to reach an agreement with Walt Disney Co. as soon as possible,” Hong Kong’s commerce bureau said.


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