Tokyo Disneyland and DisneySea’s operator, Oriental Land Firm (OLC), has launched its monetary outcomes for the primary half of the present fiscal yr, which have some attention-grabbing takeaways. This publish summarizes the important thing factors in regards to the file revenue, attendance numbers, and plans to extend funding within the theme parks.
For starters, all the pieces within the monetary outcomes shall be wholly unsurprising to those that paid consideration to the Walt Disney Firm’s earnings requires the 2 years earlier than 2023. Nicely, minus Bob Chapek and all dialogue of streaming companies, linear tv, and different albatrosses on theme parks. So mainly, 100% higher!
All joking apart, it’s price reviewing the precise fiscal outcomes launched by OLC. It’s mainly a Powerpoint presentation and is solely in English. It’s arguably simpler to digest than Disney’s monetary outcomes, with the one level the place that is debatable being in that every one values are in yen as a substitute of {dollars}. However even then, there are comparisons to the previous, so it’s easy so long as you perceive the idea of “percentages.”
With that in thoughts, I’m not going to fixate on many of the specifics. Should you actually care that a lot, you’ll learn the flick thru the 41-page presentation your self. (It ought to take lower than quarter-hour.) Should you don’t, a consolidated runthrough of the important thing takeaways adopted by our commentary ought to suffice.
First, OLC upgraded its working revenue projection to 146.7 billion yen (roughly $980 million) for the total 2024 fiscal yr, which is a rise of 31.9% year-over-year and up 24.5 billion yen from the earlier forecast. Nonetheless, it’s honest to level out that Tokyo Disney Resort was nonetheless working at considerably decreased capability as a part of its phased reopening final yr.
As with Walt Disney World and Disneyland, it thus is smart to look again to Tokyo Disney Resort’s final regular yr: 2019. Throughout that fiscal yr, OLC had a file working revenue of 129.2 billion yen, which was then up by 17.2% as in comparison with the prior yr. It’s potential that 2020 would have surpassed 2019 had the parks been open for the whole thing of that point, however for the first 9 months of that fiscal yr, income had been really down 5%. (Digging deep as a result of we’ll circle again to this within the commentary.)
The massive driver of the file revenue is larger per-guest spending. (Sound acquainted, Walt Disney World followers?!) Oriental Land has raised its forecast gross sales per visitor to 16,623 yen ($111.52); that’s up 593 yen from the beforehand projected quantity of 16,030 yen.
That’s up from the earlier medium time period forecast of 14,500 yen for this yr. Trying ahead, OLC has revised its forecast for subsequent yr as much as roughly ¥17,000. As for the why of this, it’s attributed to robust gross sales of Disney Premier Entry, the paid FastPass service at Tokyo Disney Resort. (Once more, sound acquainted?!)
Tokyo Disneyland’s fortieth Anniversary can be offered as a most important driver of spending. Sturdy gross sales of each merchandise and meals & beverage related to the anniversary had been drivers of upper spending. Apparently, a decrease proportion of friends doing desk service meals did drag this down a bit.
Trying ahead to the rest of this fiscal yr and 2025, Tokyo Disney Resort has launched a variable pricing system that adjusts admission relying on anticipated crowd ranges, elevating the very best worth of an grownup one-day ticket by 1,500 yen to 10,900 yen in October. Moreover, Disney Premier Entry line-skipping will roll out at extra choices.
Tokyo Disney Resort is the one Disney resort advanced that releases official attendance numbers, as a result of it’s the one one not owned in full or half by the Walt Disney Firm. Anyway, attendance elevated by 40% to 12.5 million within the first half of the fiscal yr.
Total attendance for the fiscal yr ending March 2024 is now forecast as 26.3 million friends, up 300,000 from the earlier forecast. That projection would put the parks at 19.1% larger than final yr, and at 80% of the file excessive set within the 2019 fiscal yr. Once more, these are numbers similar to what Walt Disney World was reporting in 2021 and into 2022–simply delayed by practically 2 years because of Japan’s slower reopening.
Worldwide guests now account for 13% of attendance at Tokyo Disney Resort, which exceeds the earlier file of 10% set within the 2020 fiscal yr.
For 2021 and 2022, the proportion of abroad guests was 0.0%. That makes full sense, given the stringent border closure that resulted in inbound overseas customer numbers within the tens of hundreds, versus tens of hundreds of thousands. In any case, the rise for the second half of final yr and first half of this yr are spectacular.
Nonetheless, I’d in all probability additionally add a caveat that Annual Move gross sales stay suspended. Though OLC doesn’t attribute the rise in per-guest spending or larger proportion of worldwide guests to that, it’s undoubtedly made a distinction. If locals must buy tickets with each go to, they’re spending extra once they do attend–and going much less, within the first place. Once more, we’ve seen this film earlier than with the reopening of Walt Disney World.
Trying ahead, OLC anticipates robust demand for Tokyo Disneyland’s fortieth Anniversary occasions to proceed within the 2nd half of this fiscal yr. It additionally reiterates that the suspension of Annual Passports shall be continued, and that APs aren’t anticipated to renew within the 2025 fiscal yr, both.
OLC additionally notes that the every day restrict on attendance was lately elevated in contrast with the extent set in the course of the first half of the present yr. Going ahead, cautious consideration shall be given in deciding whether or not to additional ease the restrict.
In view of the robust demand within the 1st half, the proportion and variety of abroad friends anticipated within the 2nd half is prone to be round 9% and 1.2 million, respectively. As in previous fiscal years, the variety of abroad friends within the 2nd half of the yr is predicted to be much less compared with the first half.
In keeping with OLC, it is because inbound vacationers from nations aside from mainland China have a tendency to go to regional areas of Japan. (This is smart–Tokyo isn’t precisely a draw for fall colours.) Though restrictions on the group journey have been lifted, the rise within the variety of friends from mainland China within the 2nd half is predicted to be restricted, judging from the current standing of flight ticket issuance.
For the 2025 fiscal yr, OLC has issued an attendance forecast of 28.5 million friends. That’s a large enhance as in comparison with the present fiscal yr, which beforehand was adjusted from 26 million to 26.3 million.
At minimal, attendance is predicted to be maintained on the identical stage as within the present yr. On the one hand, the top of Tokyo Disneyland’s fortieth Anniversary can have a unfavorable impact on numbers. Conversely, the rise in capability because of the opening of Fantasy Springs coupled with the additional enhance anticipated within the variety of abroad friends attributable to an increase within the variety of inbound vacationers will assist attendance enhance.
OLC notes that within the early phases of opening of Fantasy Springs, the realm shall be operated with managed capability in view of demand and friends’ expertise worth in addition to our operational proficiency with the intention of sustaining excessive expertise worth.
The corporate additionally adjusted its medium-term marketing strategy via the 2025 fiscal yr due largely to Fantasy Springs and these unanticipated outcomes. OLC expects Fantasy Springs to spice up consolidated gross sales by an annual 75 billion yen or so, up from 50 billion yen. Of that, round 20% shall be attributable to larger resort income. (There’s a brand new resort in Fantasy Springs, which would be the large enhance–but it surely’s secure to count on larger charges and barely larger occupancy on the different lodges, too.)
On the entire, OLC now expects consolidated working revenue of 160 billion yen for the 2025 fiscal yr. Once more, that’s up from a forecast of 146.7 billion yen for the present fiscal yr, which shall be a file.
As a result of these file outcomes, OLC is now allocating extra funds to funding in Tokyo Disneyland and DisneySea. (Think about that–when theme parks overdeliver, the corporate that operates them invests extra in them, relatively throwing good cash after dangerous on different money-losing ventures. What a loopy idea!!!)
Oriental Land Co. will now make investments 215 billion yen in progress ($1.44 billion US) and 90 billion yen ($604 million US) in upgrading its parks, up from the previously-planned 160 billion yen and 75 billion yen that was introduced in its medium-term plan. After the Fantasy Springs enlargement, Oriental Land plans to reimagine Area Mountain and its plaza in Tomorrowland. That has a price range of 56 billion and ought to fall into the upgrades bucket, because it’s described by OLC as a “renovation and renewal” on this report. (I could possibly be fallacious on that, particularly on condition that it leaves little or no for different upgrades.)
It’s additionally notable that the enterprise technique for enhancing theme park expertise worth won’t be revised. The OLC Group will attempt to create a persistently nice theme park surroundings by selling environment friendly operations with a decrease restrict on every day attendance than earlier than the outbreak of COVID-19 and by in search of to even out attendance ranges.
Turning to commentary, once more, a number of this in all probability sounds acquainted. On the one hand, I’m not shocked by the robust income and attendance. Though the report itself doesn’t include the phrases “pent-up demand,” that’s undoubtedly a giant driver. Japan additionally has had important fiscal stimulus focused at tourism, which is one other contributing issue. That is hardly speculative; the Financial institution of Japan has mentioned these matters in its financial outlooks.
It’s additionally not shocking as a result of our visits to Tokyo Disneyland post-reopening had a few of the worst ‘seems like’ crowds we’ve ever skilled. Nonetheless, that additionally got here at a time when a notable variety of eating places and retail areas had been nonetheless closed, and leisure was suspended. Reductions in capability have an outsized influence on congestion there, simply as they do at Walt Disney World, making an apples to apples comparability of crowds from 2019 to at this time practically not possible.
What’s shocking is that that is all occurring with out Annual Passes. I don’t have precise numbers and even approximations, however for those who informed me that Tokyo Disney Resort had extra Annual Passholders than Disneyland Resort in California as of 2019, I might completely consider it. (In reality, I might proactively make that wager.) Tokyo Disneyland and DisneySea are very a lot locals’ parks, and the crowds on weekends bear that out–much more so than Disneyland.
It’s actually outstanding that Tokyo Disney Resort is so near 2019 attendance numbers with out Annual Passes, and that alone ought to vindicate their choice to maintain APs suspended for thus lengthy. Though that’s been a extremely sore topic with Japanese Disney followers, for those who’re studying this, presumably that isn’t you. It’s a internet optimistic for worldwide vacationers to have APs suspended. (Sorry, locals!)
Circling again to the per-guest spending quantity, which works out to be ~$112 US. No, that isn’t a typo. Park tickets are considerably cheaper at Tokyo Disney Resort, as is meals and most merchandise. (Solely “most” as a result of Duffy stuff is absurd–it’s like that bear and his posse subsidize the remainder of the resort.)
When in comparison with Walt Disney World or Disneyland, that is arguably greater than a bit of deceptive. For one factor, the greenback is extremely robust versus the yen proper now. Nice for People touring internationally, however a non-factor for the overwhelming majority of Japanese friends who’re paid and pay for issues in yen.
To that time, median family earnings can be considerably decrease in Japan than in america. So sure, Tokyo Disney Resort is cheaper than Walt Disney World or Disneyland. That’s true irrespective of the way you slice it. For the native viewers, although, the distinction is just not as pronounced because it may appear. Nonetheless, it’s one of many many the reason why we encourage People to go to Japan!
Trying ahead, one large wildcard is whether or not Japanese friends postpone journeys whereas ready for Fantasy Springs. We’ve already up to date our When to Go to Tokyo Disneyland in 2023-2024 publish with a few of this commentary, however figured it’s price reiterating right here–particularly since we’ve now reviewed 2019 and 2020 monetary experiences for this text.
As famous above, attendance was down 5.3% within the first 9 months of the 2020 fiscal yr (via December 31, 2019–the total fiscal yr report provides much less worth because of the COVID closures). Notably, this was after Tokyo Disneyland’s thirty fifth Anniversary ended on March 25, 2019 however earlier than the large-scale enlargement (Magnificence and the Beast, and many others.) was slated to open on April 15, 2020.
It was mainly a lull yr between a significant celebration and a colossal enlargement. In different phrases, an analogous setup to the primary half of the 2024 calendar yr. The most important distinction, in our view, can be the Annual Passes and seasonal occasions that had been used then to keep up comparatively steady attendance all year long at the moment.
With Annual Move gross sales nonetheless paused–and extremely unlikely to renew till after Fantasy Springs opens (until there are important blockout dates)–that dynamic is completely different. Pair that with slowing pent-up demand and extra cautious shopper spending, and our view is that it’s extremely seemingly that vacationers and even native diehard Japanese Disney followers will postpone visits to Tokyo Disneyland and DisneySea within the first 5 months of 2024.
Proper now, it looks like a really secure wager that attendance numbers in April and Might 2024 shall be decrease than they had been this yr. To a lesser extent, the identical must be true for January via March 2024. Nonetheless, it’s potential that locals will need to get in final visits earlier than the top of Tokyo Disneyland’s fortieth Anniversary, or there shall be a Grand Finale, of types, to that.
One other risk is that return of seasonal occasions in Winter and Spring 2024. This is able to sort of make sense regardless, as OLC desires to maintain growing capability they usually’re in all probability now in a position to workers extra of those celebrations. It will even be savvy from the attitude of drawing locals to the parks at a time when there may in any other case be a reasonably important lull. Again in early 2020, that was roughly what occurred, with the introduction of the ‘Very Very Minnie’ occasion. Bringing that again, or one thing else solely, together with Easter would make an incredible quantity of sense.
In any other case, OLC could be taking a look at greater than a 5% drop from this January via Might to January via Might 2024. Towards the backdrop of slowing pent-up demand extra broadly throughout Japan, decreased shopper spending, locals suspending visits till Fantasy Springs opens in June 2024, and no Annual Passes, it positive looks like OLC might want to pull some “levers” to maintain this stage of success within the near-term. Within the medium and long-term, they need to don’t have any hassle persevering with this record-setting run within the years to come back. Seems that investing in theme parks and never simply treating them as money cows to be milked is wise enterprise. Who knew?!
Planning a visit to Tokyo Disney Resort? For complete recommendation, the perfect place to start out is our Tokyo Disneyland & DisneySea Journey Planning Information! For extra specifics, our TDR Resort Rankings & Opinions web page covers lodging. Our Restaurant Opinions element the place to dine & snack. To save cash on tickets or decide which kind to purchase, learn our Ideas for Saving Cash publish. Our What to Pack for Disney publish takes a novel take a look at intelligent gadgets to take. Venturing elsewhere in Japan? Seek the advice of our Final Information to Kyoto, Japan and Metropolis Information to Tokyo, Japan.
YOUR THOUGHTS
What do you consider OLC’s monetary outcomes for the primary half of the 2024 fiscal yr? Should you’ve been to Tokyo Disneyland or Tokyo DisneySea this yr, what did you consider crowds or costs? Trying ahead to visiting within the first half of 2024 or after Fantasy Springs opens? Do you agree or disagree with our evaluation? Any questions? Listening to your suggestions—even if you disagree with us—is each attention-grabbing to us and useful to different readers, so please share your ideas beneath within the feedback!