Disney theme park spending continues to grow... in Shanghai and Tokyo
Published: April 28, 2014 at 10:33 PM
It's looking like a great time to be a Disney theme park fan, as today saw two separate announcements of new investments totaling $5.6 billion dollars in Disney theme parks over the next decade.
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.)
Published: April 29, 2014 at 7:53 AM
Thanks for the anual report link.
Published: April 29, 2014 at 8:06 AM
Wow! Three things that you would never expect.
-Cost overruns in mainland China due to perhaps corruption and bribery. Now that's a new one.
-Disney spending a lot of money and Imagineering resources outside the USA while letting the Orlando parks outside of the MK languish.
-Attendance growing at a set of parks where the management company (OLC) spends the money, builds the attractions, and delivers the quality.
Meanwhile in the States, the Avatar development moves at a snail's pace while Universal builds exciting new lands and rides. Star Wars Land is still a rumor, and Epcot is left with nothing but the glory of yesteryear.
I know that the Disney Corp. has to invest their money where it provides the greatest return, and obviously right now that is overseas, but can the American Disney fan be taken any more for granted?
Published: April 29, 2014 at 8:41 AM
"...new investments totaling $5.6 billion dollars in Disney theme parks over the next decade."
Of which Disney itself is only investing $344M in a park that is rumored to be behind schedule, over budget, and losing opening day attractions.
Does Disney even really invest in theme parks anymore?
Published: April 29, 2014 at 9:54 AM
I agree with Tim. Disney World has gotten the shaft. (And I am a Disney fan) Some will say the Magic Kingdom got some love with the new Fantasy Land expansion, but when you do something that needed to be done a decade ago it’s kind of hard to be give them credit. Fantasy land basically got another Spinner and a tent. A cloned Mermaid ride (yawn, one ride is all you need) 2 meet and greets, a kiddie coaster that took 3 years to build and Beauty and the Beast restaurant (good luck getting a reservation to eat there) While it’s all visually appealing there really is no substance. I’m sure Avatar (if it really gets build) will be visually appealing as well. I don’t see people rushing to buy merchandise, toys, or food. (Which every attraction now needs to be build on some IP that will generate more $--no more original attractions for WDW) Hopefully they will be able to pull of the two rides in Avatar which sounds like a boat ride and a Soarin 2.0. I can only imagine what the summer crowds will be with this new Fast-pass plus. (Since it was a GF last Wednesday at 3 P.M. with moderate crowds.) I guess the WDW parks are not worthy of a Mystic Manor, Rataouille, Cars Land, or Star Wars land. I would even take a Frozen or Tangled dark ride. Disney-- get with the program or eventually the blind sheep will realized how lazy and complacent you have become, while Universal created a Transformers ride, Harry Potter land, and an entire hotel in 12-18 months!
Published: April 29, 2014 at 9:58 AM
Great news for Asia, sure, but it's kind of a case of the rich getting richer; the Tokyo resort is already the cream of the Disney resorts crop, and now they're plowing ahead with continued massive investment. It's a little disheartening for Walt Disney World fans. Just imagine what $4.8 billion in new attractions investment at WDW could bring: an overhauled Epcot, a full fledged Star Wars land as part of a park-wide refresh of Hollywood Studios, much-needed refurbishments and upgrades at the classic attractions that already exist...
But nope. We're getting wristbands, longer lines, stagnating Epcot and Hollywood Studios parks, and the promise of an Avatar land coming in three/four years (and probably opening in phases, no less, with its headliner being merely a Soarin' 2.0), with nothing substantive coming before then, attractions-wise.
I hope Universal's Diagon Alley is a smash hit this summer, and that - even if only in a small way - it serves to remind the WDW brass that consistent investment in park attractions can still pay off in big ways. I want to see WDW do great, amazing things again.
Published: April 29, 2014 at 12:57 PM
I couldn't agree with Brett more. I wonder at times if Disney is afraid to invest in the WDW attractions (especially in the other 3 parks) as in doing so will shine a light on all the other attractions/areas that are currently being neglected...look at Epcot alone, the Wonders of life Pavilion, what it now calls the Odyssey Center, a majority of the Imagination Pavilion for biggies.
Even some of the smaller things like the blown out speakers in Living with the Land, the dirty projection on Soarin', screens not working on Spaceship Earth, empty tanks in the Living Seas etc. which should be no brainers to maintain are being neglected. It looks like money is being invested in great restaurants but the attractions/areas that don't provide an immediate ROI are being forgotten. It makes me think more about an article written here that over time you start to lose that fan base as people start losing that connection.
I am starting to wonder if the effects of removing all of those mid level positions during the recession are showing up now in areas such as maintenance.
Published: April 29, 2014 at 8:35 PM
I agree with pretty much everything that was said in the previous posts. But $344m in investment in Asia is not all that much, guys. The $4.7b is entirely funded by OLC.
Yes, I hope Diagon Alley is a massively successful project. I hope their upcoming fifth hotel at Universal is just as amazing and well done as Cabana Bay is turning out. I hope Universal Orlando becomes a destination resort and makes Disney finally realize that they have competition that they can't ignore, spurring them to improve WDW.
If I move back to Central Florida, I will likely be a Universal annual pass holder, and stick to EPCOT After 4pm, and the other parks on the rare occasion. I do love the food options at EPCOT, afterall. But Universal has been earning my allegiance for a while now.
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