Consumer

David Fickling is a Bloomberg Gadfly columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.

What use would a country with more people over the age of 70 than under 20 have with amusement parks? More than you might think.

U.S. cable giant Comcast Corp. certainly seems to think so, judging by its decision to spend $2.3 billion buying full control of Universal Studios Japan. Comcast's NBCUniversal unit previously paid $1.5 billion for 51 percent of the Osaka theme park back in 2015, suggesting a 60 percent jump in equity value in less than 18 months.

Wild Ride
Attendance growth at Universal Studios Japan has led the world's top theme parks
Source: Themed Entertainment Association, Gadfly calculations

Forget what you may have heard about Japan as a nation in demographic decline. Despite the undeniable fact of an aging population, it's home to three of the world's top five theme parks, all of which have consistently boosted visitor numbers while rivals in South Korea, Hong Kong and France have stagnated.

Big in Japan
Growth at Universal Studios Japan has outpaced other Asian amusement parks
Source: Themed Entertainment Association
Note: Tokyo Disneyland and Tokyo Disney Sea not shown.

The easy explanation for this performance is that Japan's weak yen has made it the beneficiary of a wave of tourism from more buoyant corners of Asia, particularly China.

That doesn't hold up to scrutiny, though: Of the 30 million-odd visitors to the two Disney-branded properties in Tokyo operated by Oriental Land Co. in fiscal 2016, just 6 percent came from overseas.

Playing to the Home Crowd
Overseas tourists aren't that big a deal for Tokyo Disneyland and Tokyo Disney Sea
Source: Oriental Land Co., Gadfly calculations

The truth, as Gadfly has argued before, is that Japan's domestic economy is a lot healthier than pessimists realize. The country is still the world's third-biggest consumer market, with final consumption expenditure of $2.5 trillion during 2015 outstripping all the rest of East Asia bar China.

Spend to Win
Japan is the world's third-biggest consumer market
Source: World Bank
Note: Shows household final consumption expenditure. "Rest of East Asia" is South Korea, Indonesia, Hong Kong, Philippines, Thailand, Malaysia, Vietnam, Singapore, Cambodia, Macau, Laos, Mongolia, Brunei. Data not available for Taiwan, Myanmar.

That's particularly the case for women. Children account for less than 30 percent of visitors at Tokyo's two Disney parks, so the 70-30 split between female and male attendees at the resort can't be dismissed simply as schoolgirls attending the Anna and Elsa show. A larger proportion of Japan's working-age women are in jobs than in the U.S. or Europe, and while the gender pay gap is higher than in most other rich countries, it's diminishing faster.

Bending Toward Justice
Japan's gender wage gap is still too high, but it's shrinking faster than elsewhere
Source: OECD
Note: Calculated as male wages minus female wages as a percentage of male wages.

Japan's theme parks have also hit on the business model to make the most of a population that's not growing enough to provide fresh visitors every year -- they're cheaper. Day passes to Japan's big amusement parks cost 30 percent to 50 percent less than their U.S. equivalents , and as a result the resorts don't carry the one-visit-in-a-lifetime cachet that comes with the overdraft-busting ticket prices in Orlando and Anaheim. At Tokyo Disneyland, more than 90 percent of guests are repeat customers.

It's possible that the wave of amusement parks now opening in China -- from Shanghai Disneyland, through Dalian Wanda Group Co.'s network of properties, to Comcast's own Universal Beijing site due to open in 2020 -- will eventually eclipse Japan's resorts. In the meantime, they can still provide investors with an exciting ride.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

  1. Based on prices of 7,600 yen ($67) at Universal Studios Japan and 7,400 yen at Tokyo Disney Resort. Prices at U.S. resorts vary between peak and low season, but "regular" tickets to the full parks as Disneyworld, Disneyland, and Universal Studios Hollywood cost around $170, $110 and $105 respectively. 

To contact the author of this story:
David Fickling in Sydney at dfickling@bloomberg.net

To contact the editor responsible for this story:
Matthew Brooker at mbrooker1@bloomberg.net