Tokyo Disney Sees Visitors Boost from Shanghai Resort’s Buzz

  • Oriental Land expects overseas visitors to double by 2020
  • Hard for co. to lift traffic without expansion: fund manager

Visitors take a rest in front of the Cinderella Castle at Tokyo Disneyland.

Photographer: Tomohiro Ohsumi/Bloomberg

The operator of Tokyo Disneyland expects overseas visitors to more than double by 2020 to around 4 million as Walt Disney Co.’s first resort outside the U.S. rides on publicity generated by Shanghai’s new theme park and a government plan to draw more tourists to Japan.

Oriental Land Co. which is licensed to operate the Tokyo resort consisting of Disneyland, DisneySea, hotels and shopping malls, forecasts its annual investments of 50 billion yen ($481 million) on park attractions and new hotel projects will help it capture about a tenth of the 40 million foreign visitors to Japan by 2020, said executive director Akiyoshi Yokota on Tuesday. The resort attracted 8.5 percent of the 21.4 million foreign visitors to the country in the year ended March 2016.

Akiyoshi Yokota

Photographer: Tomohiro Ohsumi/Bloomberg

“Shanghai Disneyland is a plus for us as it is likely to boost the recognition of Disneyland in the region,” said Yokota, who’s in charge of finance and accounting at Oriental Land, in an interview in Tokyo. “There are wealthy Chinese people who may want to come to the one in Tokyo after experiencing it in Shanghai.”

The company, partly owned by Tokyo train operator Keisei Electric Railway Co., forecasts it can maintain the visitor ratio at around 10 percent of the country’s annual tourists despite a stronger yen, said Yokota. The world’s second-biggest theme park market grew 11 percent last year to hit 823 billion yen, according to Euromonitor International, even as Japanese consumers tighten spending over the country’s economic uncertainty.

Oriental Land fell 0.7 percent to 6,573 yen at the close in Tokyo trading Wednesday. The shares have fallen 10.4 percent so far this year, compared with the 16 percent slump in the benchmark Topix index.

The resort plans to increase the number of foreign language-speaking staff to prepare for the influx of overseas visitors, Yokota said. It raised admission prices for the third consecutive year in April.

Maintaining that pace of visitors may be challenging, said Naoki Fujiwara, chief fund manager at Shinkin Asset Management Co. in Tokyo.

“It will be hard for Oriental Land to increase total visitors beyond the current 30 million level before it expands capacity, which won’t happen before 2020,” the fund manager said. “It’s questionable whether the increasing trend will keep up its pace.”

Shanghai Buzz

Still, Tokyo Disneyland may see a visitors bump from the buzz around Disney’s first park in mainland China, which opened in Shanghai on June 16, rather than competition, said  Seiichiro Samejima, an analyst at Ichiyoshi Research Institute Inc. The opening of Hong Kong Disneyland in 2005 boosted foreign tourists’ visits to Tokyo Disney by 4.2 percent in the following fiscal year, he said.

Tokyo Disneyland

Photographer: Tomohiro Ohsumi/Bloomberg

Japan’s national visitors target could also come under threat amid the yen’s surge in the aftermath of the Brexit vote, making Europe a more attractive destination for tourists from China, the country’s largest source of foreign visitors accounting for 26 percent in the first five months of this year, according to the Japan National Tourism Organization.

Rich Guests

Yokota dismissed those fears, insisting the strong yen won’t deter foreign visitors to the park because he says the park’s guests tend to be affluent consumers. The theme park’s mainstay are Japanese, who account for 94 percent of visitors. The park’s number of visitors rose to a record 31.4 million in the year ended March 2015 due to special events inspired by the movie “Frozen.”

Tokyo Disneyland opened in April 1983, becoming the first Disney park built outside the U.S., while the adjoining DisneySea, which features water-based rides such as the Tower of Terror and Indiana Jones, opened 18 years later.

Oriental Land is considering building a new hotel near the park, Yokota said. The company is weighing options, as there’s demand at the low-end for budget accommodations while Tokyo Disney still doesn’t have a luxury hotel offering, he said. Oriental Land opened its fourth Disney-branded hotel in June.

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