Ocean Park Corporation (Amendment) Bill 2021 (2021/08/26)

Ocean Park Corporation (Amendment) Bill 2021 (2021/08/26)

MR YIU SI-WING (in Cantonese):

Deputy President, Ocean Park ("OP") is a famous theme park and tourist attraction in Hong Kong. With a history of over 40 years, it has gone through the financial crises in 1998 and 2008 as well as SARS in 2003, and had benefited from the introduction of the Individual Visit Scheme in the Mainland. OP has accompanied us for many years, and despite its ups and downs, it has brought plenty of joy to the public and tourists, and it is our collective memory. However, in recent years, OP has faced fierce competition from similar attractions in the region, and without major renew and renovation, OP has become lacking in originality. This, coupled with rising operating costs and unstable income, has caused OP to face difficulties in its operation and record losses for six consecutive years since 2015. Despite an all-time high in the number of inbound visitors in 2018, OP was still unable to turn from loss to profit. Due to the double blow of the riots and the COVID-19 pandemic in 2019, OP even sank into a financial crisis. Had there not been further support measures introduced by the Government, OP would not have been able to avert the fate of closure.


As a landmark of Hong Kong and a major tourist attraction, OP has made a lot of contributions to Hong Kong in many respects, such as tourism, economy, employment, conservation and education. To revive OP, it requires further government injections and changes to the past modus operandi, and this is the most desirable option under the current circumstances. Regarding the contents of the Ocean Park Corporation (Amendment) Bill 2021 ("the Bill") and the future development plan of OP, my views are as follows: Firstly, it is necessary to achieve a fiscal balance. In general, the profit-making model of theme parks is to drive up the number of visitors and then maintain revenue and profitability through proceeds from ticket, food and beverage, and souvenir sales. Therefore, constant updating of facilities and ongoing promotion and publicity campaigns are necessary in order to attract more visitors. This mode of operation incurs hefty costs and high expenditures, and under the inflationary effect, the annual operating, maintenance and construction costs will only keep rising. Once the attendance does not increase or even declines, the park will fall into a vicious cycle of operational difficulties, an imbalance of income and expenditure, and discontinued injection of funds. OP is precisely caught in such a vicious cycle. Given the huge injections made to meet the expenditures over the years, OP has been plunged into an inextricable dilemma. It is in need of government support to reposition itself and identify a new direction for development.


Under the new reform proposal, OP can rent out the Retail, Dining and Entertainment zone in the lower park and parts of that in the upper park. This, I believe, can generate a more stable rental income and help boost its revenue. However, it should be noted that as there is, after all, a limit on the number of visitors, if the lower park is open for free, a large number of people will visit the park on holidays and this may lead to a situation where there is little or even no spending by the visitors, thus affecting the business of the tenants and the rental income of OP in the long run. I suggest that OP can consider charging a fee as appropriate or requiring visitors to buy consumption vouchers of a certain value for admission during holidays, in order to control the flow of people, and as for the admission and itemized charging approaches for the upper park, I think OP will make appropriate adjustments in the light of changes in visitor spending and so, there should not be any big problem.


What I am more concerned about is the challenges to be brought by the operation of the Water World with an investment reaching as much as $4 billion, including the need to meet daily expenses, and also the depreciation costs, capital repayment and interest payment. A few years later, in order to enhance its attractiveness, OP may need to make further investment or renovate some facilities, which will require a certain amount of capital; and in the winter low season, revenue will be significantly affected. In the face of all these pressures, the management must properly formulate budgets for the short, medium and long terms. It must take every step to prevent OP from sinking into a financial crisis again because it will no longer be justified for the Government to further inject funds into OP and by then, OP can only choose to close down, which is the last thing that the public will wish to see.


Secondly, OP should be committed to carrying out work in education and conservation effectively. I agree to the need to include conservation in the functions of OP as proposed in the Bill. In view of competition from many large-scale theme parks in the region, OP has little advantage in terms of scale, hardware or market coverage, but OP has achieved effective results in animal conservation and education over the years. As early as in 1993, OP established its conservation foundation and has a well-established scientific research team. Apart from focusing on Chinese white dolphins and giant pandas, efforts have also been made to carry out studies and conservation projects on many endangered species. The Ocean Park Academy Hong Kong founded in 2004 has long provided courses for primary and secondary school students to learn about the habits of giant pandas, red pandas, dolphins, sea lions, fish, birds and plants as well as knowledge of the ecology, providing practical, professional and interesting courses for our next generation.


Judging from OP's foundation and strengths in conservation and education, it is impossible for its competitors in the neighbouring regions to be on a par with OP in the near future. For the next four years, the Government has allocated $1.12 billion to support OP's ongoing resource injections in conservation and education, which has never happened in other regions before. OP should make use of this provision to formulate a more systematic, professional and scientific conservation and education programme to strengthen its ties with the community, schools and overseas and provide more support. At the same time, by making use of its unique conservation and education resources, OP can develop some in-depth experiential programmes and design conservation activities with local characteristics to provide unique tourism experiences for the public and visitors.


Thirdly, it is necessary to improve the tendering scheme in order for OP to ride out the difficulties as soon as possible. Situated at a prime location with direct access by MTR, OP is surrounded by beautiful sceneries and the facilities inside the park are still quite attractive, while the "Invigorating Island South" initiative will bring more opportunities for OP. The revamped mode of operation can certainly attract participation from local and foreign investors with strengths and solid foundations. Days ago OP began to invite investors to cooperate in the development of OP through a Build-Operate-Transfer (BOT) model and will commence a pre-qualification exercise, and this is proof of the work efficiency of the management. After the passage of the Bill, OP should expeditiously announce the details of the pre-qualification exercise for the tender process and strive to invite tenders before the end of the year, thereby rebuilding public confidence in OP and providing assurances to its staff. While a new mode of operation will be adopted in the future, OP should fulfil its social responsibility by avoiding layoffs or assisting its staff to switch to other posts.


Fourthly, efforts should be stepped up to explore ways of cooperation jointly with the tourism-related sectors. For some time in the past, OP was a must-see destination for Mainland tour groups but then, given the ever increasing ticket price and a growing number of similar attractions in the Mainland, OP's appeal to tour groups has faded significantly in recent years and the attendance has been on the decline year-on-year. In the future, OP will charge separately for admission to the upper park, lower park and the Water World. Apart from the challenges to be faced in setting pricing standards, it will be equally challenging as to how OP can work with other stakeholders in the tourism industry, including travel agents, hotels, stakeholders in the transport sector, and the Hong Kong Tourism Board. OP should communicate more with all relevant stakeholders to understand their needs, so as to achieve greater diversification in its sales and promotion strategies and enrich the choices of its products to attract different types of visitors, thereby generating ongoing income for OP. I hope that OP will ride out the difficulties as soon as possible and have a better tomorrow.


With these remarks, Deputy President, I support the Bill.