Dark financial clouds over TDR and the Oriental Land Company?

[Flossbolna]

Just saw this article. They expect a 11% decline in attendance despite the new land in the business year running from 04/01/24 to 03/31/25.

https://www.forbes.com/sites/caroli...-down-11-on-2019-despite-2-billion-expansion/

 

[fatmanatee]

The headline is a bit dishonest, it's a 11 percent decrease *from a high* in 2019, i.e. attendance cratered as a result of COVID travel restrictions and although it's gotten better since then, it hasn't entirely recovered. Curious about how much of this is due to a decrease in local traffic, it certainly feels like more people are travelling internationally, especially with the yen being as weak as it is right now. I've started booking hotels for a visit later this year and I'm stunned with how cheap it is.

 

[dunkindonut]

There's no annual pass in Tokyo anymore, so I think there's a ton of people who just aren't wiling to buy a ticket multiple times a year. Plus obviously it also is counting the covid numbers, and the resort is getting more expensive than ever. What is cheap to foreigners in yen is not cheap in JPY, which definitely I think is beginning to contribute to some possible dwindling numbers.

https://www.olc.co.jp/en/ir/achievement/anticipation.html here is the actual page

 

[soniam]

I wonder how airfares are. If those are high, even with a weak yen, it may not be enough. Iger said attendance would be down too, not sure which parks.

 

[Flossbolna]

I wonder how airfares are. If those are high, even with a weak yen, it may not be enough. Iger said attendance would be down too, not sure which parks.

From Europe airfare is way up. Mainly I think because flight time is much longer as European and Japanese airlines don’t fly over Russia at the moment. If we hadn’t booked using miles, it would have been 1100€ compared to the 700€ we payed in 2017 for similar flights from Germany.

 

[dunkindonut]

My usual flight from US east (DC to Haneda, non stop ANA) went up $800 from last year, one of the reasons I did not go to Japan this year.

 

[Disneyhanna]

Airfare is pretty expensive from the US. Obviously there are budget options such as Zipair from the west coast but I looked into it and by the time you add in baggage and choosing a seat, plus a repositioning flight, it's not such a great deal unless you already live near LAX/SFO/SJC. Flights from the rest of the US are in the realm of $1000USD each way, for direct flights. There are some cheaper times of year but the trend definitely seems higher than ever. Definitely more than I have ever paid in airfare, anywhere! Plus with losing about 3 days to travel with the flight length and time difference, Japan isn't a great destination from the US unless you can take off at least a week and a half.

So, even if being in Japan itself is cheap, the barrier to entry is pretty high from the US, unless you are near LA and can take advantage of some of the cheaper (and quicker) flights that pop up. I have a lot of friends that would love to go to Japan but the flights are just too much and it's also tough to take so much time off work. Everyone I know is going to Europe instead since flight deals are much more common, and obviously it's a bit shorter of a flight. They all see the Fantasy Springs stuff are like wow!!! But for us, going to WDW (especially with an AP) is just a far cheaper option. It's funny to say WDW and cheap in the same sentence, lol!

 

[dunkindonut]

You can fly air canada but it's like a 16+ hour long flight, it's much cheaper though. ANA is the only non stop flight near me so I don't really have any other options.

 

[Smugpugmug]

My usual flight from US east (DC to Haneda, non stop ANA) went up $800 from last year, one of the reasons I did not go to Japan this year.

That's the same route and airline I'm flying to Japan with later this year and price for a regular economy fare was eye watering. United, who also has a nonstop, was somehow even more expensive which is wild to me since United isn't that great.

 

[Lesverts]

My flights were 1945 AUD on Japan Airlines. So just shy of 1300 USD. This is Sydney to Tokyo and Tokyo to Toronto via Chicago. It wasn't the cheapest option but the best one for times/Haneda instead of Narita and better inflight experience.

 

[Kwami]

I usually go round trip BOS->NRT on JAL for about $1250, but this year, it was about $2200. Some of that is because avoiding Russia increases the flight time, but most of it is just pure corporate greed.

 

[dunkindonut]

Realistically most tourists are Korean or Chinese and I'm sure many of them want to go to Disney.

 

[soniam]

We are doing American. Short flight to DFW and then non-stop from there to Haneda. I don't remember the price anymore, but it wasn't cheap. I am sure there were cheaper options, but we are willing to pay for non-stop.

 

[fatmanatee]

Wish I had looked into a comparable trip to my last visit. I’m looking at November this time, in 2018 I visited in May. Cost 1080 in 2018, found a trip for 1250 in July but the layover is really rough. For the trip I’m looking at in November I found a trip that is partly direct for 1350, leaning towards going with that one bc I don’t think it’s going to get better and a nonstop to Tokyo is probably worth it.

 

[dunkindonut]

The most expensive part of Japan is the flight, if you can get passed that barrier yen is extremely weak. I have seen Japanese articles about some politicians pushing to start taxing tourists though so who knows.

 

[gelatoni fan]

It's not just a lack of annual pass. There's also a lack of shows. Nothing is happening in the Hangar Stage and they don't have proper harbor shows. Jamboree Mickey was a 3rd daytime "parade" before the pandemic. Now it's occupying two outdoor show venues.

Hotel prices are also very high in terms of yen compared to pre-pandemic.

But honestly, I don't think OLC likes having 11 hour waits and full capacity days. So if attendance is down while spending per guest is up, then it's exactly what OLC is trying to do. It'd be natural for more of the spend to come from ticket sales rather than merchandise as annual passholders would have low per day ticket spend but comparatively higher per day merchandise spend. Japanese companies tend to have much longer time horizons and aren't as focused on the day to day movements of their stocks as American companies are. So while the trends are true, I'm not sure if it'd be right to interpret it as worrying if it's exactly what OLC is trying to do in order to keep crowds at a manageable level.

 

[Flossbolna]

It's not just a lack of annual pass. There's also a lack of shows. Nothing is happening in the Hangar Stage and they don't have proper harbor shows. Jamboree Mickey was a 3rd daytime "parade" before the pandemic. Now it's occupying two outdoor show venues.

Hotel prices are also very high in terms of yen compared to pre-pandemic.

But honestly, I don't think OLC likes having 11 hour waits and full capacity days. So if attendance is down while spending per guest is up, then it's exactly what OLC is trying to do. It'd be natural for more of the spend to come from ticket sales rather than merchandise as annual passholders would have low per day ticket spend but comparatively higher per day merchandise spend. Japanese companies tend to have much longer time horizons and aren't as focused on the day to day movements of their stocks as American companies are. So while the trends are true, I'm not sure if it'd be right to interpret it as worrying if it's exactly what OLC is trying to do in order to keep crowds at a manageable level.

While I agree with your reasoning, it seems that OLC can’t be totally happy if investors don’t see the long game as much. The article which I linked to concludes with this:

“Despite the hype around the new land at DisneySea, dark clouds have gathered over OLC as its share price hit a one-year low of $27.39 (¥4,278) earlier this month. It was down a staggering 24.9% from its high in July last year so it appears that giving investors a happy ending is far from a walk in the park.”

While I understand that this is written from a US perspective and Japanese companies might see things differently, share prices going down that much doesn’t seem very good to me.