HONG KONG -(Dow Jones)- More people are visiting Hong Kong Disneyland, indicating its marketing is starting to pay off, but Hong Kong and Walt Disney Co. (DIS) have yet to resolve differences over funding an expansion.

Hong Kong's government said last year it might inject funds into the park for an expansion, and although it has declined to discuss figures, the Hong Kong Economic Times reported Thursday that elements of an expansion now under discussion would cost HK$8 billion (US$1.03 billion).

"We are still in talks with Walt Disney Co. about the expansion plan and we haven't set a time frame," a Hong Kong government information officer, who declined to be named, told Dow Jones Newswires.

Hong Kong Disneyland has missed attendance targets since it opened in September 2005, but the South China Morning Post reported Thursday attendance is expected to hit 5.6 million this year - finally reaching Disney's goal for the first year.

Disney and Hong Kong won't provide attendance figures, although Hong Kong had originally hoped attendance would hit 6.5 million in 2008, according to a paper the government gave lawmakers when the park was in the planning stages.

A Disney spokesman, who declined to be named, would say only that attendance has been growing.

An academic who studies Hong Kong Disneyland called the rising attendance "a good sign" but said it is premature to say the park is turning things around.

"It's too early to say anything based on three years' figures. We need to look at the first five years for a better assessment," said John Ap, associate professor in tourism management at Polytechnic University.

Simon Lee, founder of an independent local think tank, the Lion Rock Institute, said the improved attendance probably won't be enough to convince the government to fund an expansion at Hong Kong Disneyland, the smallest of the Disneyland parks.

"There are many burning issues such as high inflation that are on a higher priority than the park's expansion plan," Lee said.

The park is owned 57% by Hong Kong and 43% by Disney.

Although Hong Kong's investment in the park itself was US$417 million and Disney put up US$314 million, critics say Hong Kong cut a bad deal because taxpayers also paid US$1.74 billion for related infrastructure and land reclamation.

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