Disney theme park spending continues to grow... in Shanghai and Tokyo
Published: April 28, 2014 at 10:33 PM
You're waiting for the catch, aren't you? Okay, let's rephrase that lead: It's looking like a great time to be a Disney theme park fan in Asia, as Shanghai Disneyland's getting another US$800 million in investment while the company that runs the Tokyo Disney Resort is promising an additional US$4.8 billion in spending over the next decade on its parks.
Tokyo Disneyland. Photo submitted by David Weiss
No new word on what those investments will buy, save for the previously announced new Jungle Cruise and Stitch Encounter attractions which will debut later this year and next, respectively, at Tokyo Disneyland.
The Walt Disney Company will contribute $344 million of the new investment for Shanghai Disneyland, with its Chinese business partner Shanghai Shendi picking up the rest. The two companies already have announced $4.7 billion in investment to build the new 225-acre Disneyland park and its surrounding hotel and retail district. A Disney spokesperson told the New York Times that the spending reflects investment in additional attractions for the park, and not cost overruns, but industry gossip overflows with tales of cost overruns in Shanghai (and projects cut back as a result), so maybe it's worth asking if this new spending is just adding stuff previously cut to account for increased costs? Disney's been coy about revealing many plans for the Shanghai park, in large part due to wanting to avoid inspiring preemptive knock-offs from other Chinese parks.
The recent $500 million investment in Hong Kong Disneyland, which brought fans Grizzly Gulch and Mystic Manor, helped drive a 10 percent annual increase in attendance at that park, which drew a record 7.4 million visitors last year, so recent investments with its Asian theme park partners have delivered additional business for Disney.
In Tokyo, the Disney Co.'s share of the new investment will be $0, as Tokyo Disney is wholly owned and operated by the Oriental Land Company [OLC], which pays license fees and royalties to Disney. OLC released its annual report today, and if you're a theme park fan who's into the numbers behind this business, OLC's annual report always provides a fascinating read, as it delivers numbers at a level that Disney never officially provides for its theme parks in the United States.
Oriental Land reports that Tokyo Disney welcomed 31.3 million visitors in the fiscal year ending March 31, a record attendance driven in large part by the resort's 30th anniversary. That represents a 13.8% increase in attendance over the previous year. In addition, OLC reported that per-guest spending rose on top of the attendance increase, with per-guest spending up 4.5% overall, led by an 8.4% increase in merchandise sales.
However, OLC warned that Tokyo Disney's attendance trend should have had it attracting between 27 and 28 million visitors this year, and that the company expects resort attendance to drop to 28 million visitors next year, with per guest spending dropping 4.1%, and per-guest spending on merchandise expected to drop 9.7%, as people won't have all that 30th anniversary stuff to buy.
OLC also revealed that it's looking at adding new investments outside the Maihama district where the Tokyo Disney Resort is located. But there's no detail on that, including whether that investment would take the form of a new theme park or not.
Finally, anyone who's visited the Disney theme parks in the United States or France has grown accustomed to seeing many international visitors at Disney's parks. But the OLC's annual report reveals just how few people from outside Japan are visiting the Tokyo Disney parks, despite their well-earned reputation as the world's best.
Last year, overseas attendance finally cracked the 1-million-visitor mark. That's right, just 1 million of the resort's 31 million visitors were from outside Japan, for just 3.9% of visitors overall. And that represents a substantial increase over previous years. For example, when I visited in December 2011 (the year of the earthquake and tsunami), just 333,000 overseas visitors came to Tokyo Disney that fiscal year, an average of fewer than 1,000 per day. And OLC noted that almost all of its overseas visitation comes from China, Taiwan, and Hong Kong.
The OLC report presented a goal of consistently drawing 30 million visitors a year to Tokyo Disney by 2023, with a continued increase in overseas visitors, as Japan tries to increase overseas visitation to the country from about 11 million visitors this year to 20 million by 2020, when Tokyo hosts the Summer Olympics. (For comparison, the United States welcomed more than 70 million foreign visitors last year.)