(The author is a Reuters Breakingviews columnist. The opinions expressed are her own.)

HONG KONG - Hong Kong is extending its wild ride at Ocean Park. The struggling theme park will receive a fresh government bailout, its second in less than a year. It brings the total amount of support to nearly HK$8.2 billion ($1.1 billion). That’s more than a recently announced stimulus package, in a sign of the city’s skewed priorities. Even with the new proposed business model, the attraction is destined for more downs than ups.

The 44-year-old not-for-profit site known for giant pandas and roller coasters carries more symbolic than economic significance for Hong Kongers. The 2019 anti-government protests and ensuing pandemic have decimated tourism, however. Ocean Park attendance plunged 62% year-on-year to 2.2 million visitors in the fiscal year through June, with its operating loss swelling to over $150 million.

A hefty government loan package last year kept things afloat temporarily. The latest rescue includes more than $200 million in working capital and additional funds to run Ocean Park’s conservation and education programmes. It also waives interest on earlier debt and extends the payback for years. All told, the new financial support announced on Monday is equivalent to about $200,000 for each of the park’s employees.

There is at least an acknowledgment that things need to change to stabilise Ocean Park financially. It will eliminate its all-inclusive ticket fee and make parts accessible for free. There are plans to develop a retail, dining and entertainment area, as well as a new water park.

The amount of funding involved, however, calls into question Hong Kong’s priorities. The city’s public housing supply has missed targets for years, according to an April report by think tank Our Hong Kong Foundation, with continued shortfalls expected. The city's unemployment rate, meanwhile, is set to hit its highest level in 16 years, Financial Secretary Paul Chan wrote on Sunday.

It’s questionable whether even more of Hong Kong’s real estate should be devoted to shopping. The local Disneyland resort in September lost the option to buy a plot of adjacent land after activists pushed for the development of public housing on it. The same rationale could easily apply to Ocean Park. Instead, the city is ready to risk going around again on a precarious financial spin.

 

CONTEXT NEWS

- The Hong Kong government said on Jan. 18 that it would provide Ocean Park with a HK$2.8 billion ($362 million) rescue that also will involve restructuring the struggling theme park’s business model, including changing its ticketing fee.

- As part of the plan, the government will provide about HK$1.7 billion in working capital and another HK$1.1 billion to run Ocean Park’s conservation and education programmes.

- The government had provided HK$5.4 billion of loans in May. Repayment has been pushed back from 2021 to the financial year ending in 2029, with the interest waived.

 

(The author is a Reuters Breakingviews columnist. The opinions expressed are her own.)

 (Editing by Jeffrey Goldfarb and Katrina Hamlin) ((sharon.lam@thomsonreuters.com; Reuters Messaging: sharon.lam.thomsonreuters.com@reuters.net))