The 115th Board Meeting of the West Kowloon Cultural District Authority

The Board of the West Kowloon Cultural District Authority (WKCDA or the Authority) held its 115th meeting today. At the meeting, Mrs Betty Fung, Chief Executive Officer of WKCDA, reported on the latest progress in various areas of the West Kowloon Cultural District (WKCD).

Having just completed the annual report for the financial year 2022-23, Mrs Betty Fung provided a brief overview of the WKCDA’s financial performance in the past year at the meeting. With the opening of the Hong Kong Palace Museum in July last year, the two museums in WKCD were fully operational for the entire financial year of 2022-23. As the city progressively returns to normal and cross-border travel resumes, the number of visitors to WKCD has seen a significant surge. The performance of our Retail/Dining/Entertainment (RDE), and venue rental businesses have exceeded expectations. As a result, the operating income of the WKCDA (excluding interest and investment income) has grown by more than fourfold year-on-year, reaching HK$553 million. Throughout the year, visitations to WKCD’s two museums and performing arts venues reached 4 million. Since their respective openings, M+ and the Hong Kong Palace Museum have welcomed over 4.4 million and over 1.64 million visitors, respectively.

Furthermore, sales of our RDE tenants have increased by 75% year-on-year, while commercial leasing income has increased by 3.8 times year-on-year. Nearly all available commercial floor space has been leased out. Through corporate sponsorships, private donations, and the support of members and sponsors, the fundraising income of WKCDA has grown by more than six times compared to last year, reaching HK$197 million.

Besides actively pursuing revenue generation strategies, the Authority has continued to maintain stringent control over expenditures during the last financial year. Under the dual effect of our tightening measures and proactive revenue generation strategies, WKCDA’s underlying operating deficit for the financial year ended 31 March 2023 (before depreciation, amortisation and financing costs) was HK$718 million. This represents a significant reduction of 50% compared to the forecast before the implementation of tightening measures in 2021. In terms of cost recovery rate, WKCDA also showcased commendable performance. During the financial year 2022-23, the Performing Arts Division achieved a cost recovery rate of 34%. Meanwhile, M+ and the Hong Kong Palace Museum attained even higher cost recovery rates, at 46% and 44% respectively. These figures are on par with or higher than those of other globally renowned museums.

Like arts and cultural facilities worldwide, it is challenging for the operation WKCD’s arts and cultural facilities to achieve a balance between income and expenditure. As a self-financed cultural institution, the long-term strategy of WKCDA is to sustain the operation of arts and cultural facilities through commercial revenues. This financial model was adopted by the Government of the Hong Kong Special Administrative Region when establishing the WKCDA.

However, despite the phased operation of arts and cultural facilities, most income-generating commercial facilities in WKCD are still going to take some time to get in place for various reasons. An exception to this is the successful tendering of the Artist Square Tower project late last year. The situation, however, has prolonged the cashflow mismatch for WKCD.

Although the WKCDA’s business performance was satisfactory in the last financial year and some revenue generation and tightening measures have proven effective, these can only postpone the cash flow exhaustion until early 2025. Despite this, the operational performance of the WKCDA in the 2022-23 financial year demonstrates WKCD’s ability to fulfil its mission as an international cultural landmark and promote Hong Kong as a hub for cultural and artistic exchange and a cultural tourism destination even amid adversity and challenges. The public will be able to access the 2022-23 Annual Report on the West Kowloon Cultural District website in due course.

As for HKPM, the Hong Kong Palace Museum launched the special exhibition Gazing at Sanxingdui: New Archaeological Discoveries in Sichuan in Gallery 8 from 27 September through 8 January next year. Gazing at Sanxingdui features new archaeological discoveries of the origin ancient Shu civilisation 3000 to 4000 years ago and its connection with the development of Chinese civilisation. It attracted a large number of visitors during the recent National Day Golden Week, with the museum achieving a new single-day attendance record since its opening of more than 9,200 visitors on 2 October.

Furthermore, from 22 November, HKPM will jointly host the large-scale special exhibition From Botticelli to Van Gogh: Masterpieces from the National Gallery, London in Gallery 9 with the National Gallery, UK. A special combo ticket, priced at HK$240 for adults and HK$120 for concessions, will be available to visitors who would like to visit the abovementioned two special exhibitions, as well as the thematic exhibitions in Gallery 1 to Gallery 7. 

For M+, special exhibition Madame Song: Pioneering Art and Fashion in China was opened on 27 July this year. This was closely followed by the second exhibition of the M+ Sigg Collection, M+ Sigg Collection: Another Story, which was opened to the public in late September. The Sigg Prize 2023 exhibition is now also on view free of charge at the Main Hall Gallery on the ground floor of the museum.

The highly acclaimed special exhibition Yayoi Kusama: From 1945 to Now of M+ moved to the Guggenheim Museum Bilbao in Spain for slightly over three months from the end of June. The exhibition concluded on this past Sunday (8 October). Drawing the attention of over 550,000 visitors, it set a new record for the museum’s summer attendance. The exhibition’s public relations promotion and marketing campaign in Hong Kong garnered multiple accolades as well. Just last week, it won the highest honour, the “Now TV Gold Award” at Awards for Marketing Excellence 2023 hosted by the Hong Kong Management Association. This is the first time a local arts and cultural institution has received such esteemed recognition.

For Performing Arts Division, Freespace Jazz Fest brought together more than 500 jazz musicians from 11 countries and regions worldwide, offering jazz extravaganza. Last weekend, due to adverse weather conditions, some ticketed events had to be relocated to Lau Bak Livehouse and were held earlier than originally scheduled. Despite these changes, the atmosphere remained vibrant and energetic. On 26 October, international jazz star Stacey Kent will grace the stage of the Grand Theatre of the Xiqu Centre, bringing the festival to a perfect close. Aside from wheelchair user seats, all tickets have been sold out.

As for Xiqu, the critically acclaimed Black Box Chinese Opera Festival, launched in 2017, returned to the Xiqu Centre on 1 October. Alongside in-house productions by the Xiqu Centre, WKCD invited the Shanghai Kunqu Opera Troupe and the Xiamen Jin Liansheng Gaojia Opera Troupe to bring unique Black Box performances from different regions, showcasing their creativity.

During this summer, Mrs Betty Fung, Chief Executive Officer of WKCDA, led a delegation from the Authority to visit Shanghai, Shenzhen, Guangzhou, Dongguan, and Chengdu. The delegation engaged in in-depth exchanges with local performing arts venues, museums and cultural institutions, exchanging insights on operational models and latest developments. During these visits, Mrs Fung met with Mr Fang Shizhong, Director General of the Shanghai Municipal Administration of Culture and Tourism, and Mr Li Bin, Director General of the Department of Culture and Tourism of Guangdong Province. Both sides expressed a shared aspiration for more interactions and visits to further strengthen the collaboration and linked development between WKCD and cultural and arts institutions in various provinces and cities across the Mainland. This is particularly pertinent in the context of enhancing cooperation with regards to touring exhibitions and performances, and in better utilising the use of the District’s cultural hardware and software.

To accommodate the steady rise in in visitor numbers, a new green minibus (GMB) CX1 will be introduced starting from 13 October 2023 (Friday), and a franchised bus route W4 will be introduced starting from 14 October 2023 (Saturday). They will provide public transport services between WKCD and Hong Kong West Kowloon Station of High Speed Rail/MTR Austin Station. Stops will include M+, HKPM and the Art Park.

With the enhancement of public transport services, the “West Kowloon Circular Route” –  currently providing complimentary shuttle bus service between WKCD and Hong Kong West Kowloon Station of High Speed Rail/MTR Austin Station – will suspend operations after the last bus departs at 8:30pm on 13 October. 

Annex

*With the full operation of the Hong Kong Palace Museum and M+, operating expenditures of the Authority have significantly increased. Hence, the projected operating deficit for the financial year 2022/23, estimated in 2021, rose to HK$1.436 billion. After the tightening measures taken by the Authority, the revised estimate for the 2022/23 financial year's operating deficit, made in 2022, was reduced to HK$1.078 billion. The HK$718 million actual operating deficit for the 2022/23 financial year, based on the above figures, therefore represents a 50% reduction from the estimate before the expenditure tightening.

Compared with the HK$772 million operating deficit for the financial year 2021/22, the HK$718 million deficit for the financial year 2022/23 represented a year-on-year decrease of 7%. However, the operating expenditures for the financial year 2021/22 did not include the operating expenditures of the Hong Kong Palace Museum after its opening, which opened in 2022.

** Year-on-year change

Remarks

About the West Kowloon Cultural District
The West Kowloon Cultural District is one of the largest and most ambitious cultural projects globally. Its vision is to create a vibrant new cultural quarter for Hong Kong on forty hectares of reclaimed land located alongside Victoria Harbour. With a varied mix of theatres, performance spaces, and museums, the West Kowloon Cultural District will produce and host world-class exhibitions, performances and cultural events, providing twenty-three hectares of public open space, including a two-kilometre waterfront promenade.