Attendance up, but revenue down at Tokyo Disney

October 30, 2019, 1:33 PM · If you ever wondered why theme parks hype their souvenirs so much, just look at the most recent financial results from the Tokyo Disney Resort.

Tokyo Disney operates under license from The Walt Disney Company but it's actually owned and run by The Oriental Land Co., not Disney. Since OLC is a Japanese company that pretty much just runs Tokyo Disney, we have access to far more detailed public information about official attendance and revenue data from its parks than we get from Disney's financial statements.

For the first six months of the company's fiscal year, OLC reported 1.4 percent increase in attendance at Tokyo Disneyland and Tokyo DisneySea over the same period in 2018, from 15.52 million to 15.74 million visitors. But net sales per guest dropped 1.7 percent during the period, led by a 7.2 percent drop in merchandise revenue. That loss wiped out a 5.1 percent increase in per capita food and beverage sales, contributing to an overall 0.9 percent decline in net sales overall for the company during the period.

Why the drop? At this time last year, Tokyo Disney's 35th anniversary merchandise was flying off the shelves. This year, despite Soaring: Fantastic Flight luring more apparently hungry and thirsty fans to Tokyo DisneySea, the resort just didn't have the merchandise to entice those guests to keep spending more on souvenirs and collectibles.

OLC is forecasting a net gain in sales by the end of the year, and Tokyo Disney has a blockbuster line-up of new attractions on deck for the start of its next fiscal year, which begins in April 2020. That's the month that Tokyo Disneyland will debut its expansion project, led by a new Beauty and the Beast trackless dark ride, an indoor, Broadway-style Fantasyland theater, Big Hero 6 spinner, and Minnie Mouse meet and greet experience. And, of course, the Summer Olympics will be coming to Tokyo in 2020, as well, which should bring a substantial increase in international visitors to the Japan.

OLC's report notes that the number of international visitors to Tokyo Disney Resort has been growing substantially over the past five years, from just under 4 percent of all resort guests in 2013 to nearly 10 percent of park guests last year. Tokyo Disneyland's expansion is designed to accommodate an expected surge in those visitors next year.

But you'd better believe that Tokyo Disney will have another fresh line-up of creative souvenirs on sale then to celebrate those new attractions, too.

Replies (8)

October 30, 2019 at 2:10 PM

With attendance up but profits down, do you think OLC considers last quarter a success? I doubt it. I suspect they would rather be like Disneyland and Disneyworld with lower attendance but higher per person spending.

October 30, 2019 at 3:09 PM

I think OLC plays a long game. I would encourage everyone to read that report (first link in the post). The focus on providing "Novelty" and "Comfort" in the guest experience is something that I think all theme park fans welcome.

October 30, 2019 at 6:48 PM

I know it's the capitalist economy in the US that demands constant growth but there will be a moment that model just doesn't work anymore and you just make the same profit (or a bit less) the next years. Why is that wrong?

October 31, 2019 at 8:51 AM

@OT - That's definitely something about business I've never understood. The insistence on constant growth and continuing pressure to draw blood from a rock is mind numbing. Not only does Wall Street demand that companies continue to grow year over year, but it's expected that the rate of growth also increases or investors will sell of their stock. It's not good enough to grow 5% over last year's revenue, you also need to project and deliver 6% (or more) growth the following year. It's a maddening cycle of meeting projections and then being burdened with an even high bar the next year.

Perhaps for companies that don't pay dividends (becoming increasingly common in today's digital economy) that's the only way investors can justify holding stock, but for a company like Disney (and Comcast), holding steady and delivering profit to their shareholders should be more than satisfactory.

October 31, 2019 at 9:24 AM

I agree with the problems about constant growth year after year. Just making the same profit isn't good enough. Its what has led to all those after hours upcharge events that dominate at WDW. I remember ten years ago when MK was open until 1 or 2 am and you could go as long as you wanted for no extra charge. It was great. But now all that is gone. Now it seems if Disney is going to justify having the park open that late and having to pay money to operate it, they better charge as much as they can for it and run it as often as they can. Its the only way to keep getting as much revenue and profit increase as they can. The guest experience isn't a primary concern since the guests keep spending the money.

October 31, 2019 at 2:50 PM

@Robert did this reporting period include any of the period where the Rugby World Cup was on? I know its not the Olympics but it might give a clue as to whether or not sports fans are willing to add parks to their itinerary.

October 31, 2019 at 3:03 PM

Growth is required to keep up with inflation. Would you be happy with not getting a raise in your job from year to year? You would be making the same amount of money for the same amount of work, so that should be okay, right? It's unlikely you would be happy because the cost of the goods you purchase and the services you require would be rising and your salary would not go as far to purchase those goods and services.

Now, I do understand that this growth could be a "Which came first: the chicken or the egg?" question. Is the need for growth in business causing inflation, or does inflation cause the need for growth? IMHO, it is likely the former and not the latter. However, what business is going to be the first to be willing to cease growth in order to eliminate inflation? It would likely be the first business to fail because there is no guarantee that other businesses will follow suit.

November 2, 2019 at 12:46 PM

O T remember you asked why? Any basic economic course would teach you this. The only economic system that does not demand growth in earnings is hardcore socialist countries or communist or nazi countries (Nazi's are really also socialists/communists too. i.e. centralized government control over almost everything). If you can put your money in bonds and earn three percent with little risk, than you are going to demand six or more percent for a very risky investment like stocks. I say all of that respectfully. I generally agree with you on non economic opinions.

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