Tokyo Disneyland, now 30, still casts spell; Park keeps loyal fans, adds new ones by keeping its magic fresh

Tokyo Disneyland, now 30, still casts spell

Park keeps loyal fans, adds new ones by keeping its magic fresh


APR 13, 2013


Tokyo Disney Resort, comprising Tokyo Disneyland and Tokyo DisneySea, celebrates its 30th anniversary Monday with no signs that its magic spell has worn off, as figures show the wildly popular venue lured a record 27.5 million visitors in fiscal 2012, which ended in March.

While some theme parks built over the past 30 years, including Universal Studios Japan in Osaka and Huis Ten Bosch in Nagasaki Prefecture, have struggled to make a profit, Disney operator Oriental Land Co. has dominated the industry and aims to attract even more visitors this year.

Industry observers attribute the Disney success to instilling in visitors a sense that they are in dreamland — a place they will seek to return to again and again.“Oriental Land has everything required to allow the company to successfully run a theme park,” said Mia Nagasaka, an analyst at Morgan Stanley MUFG Securities.

The necessary factors, according to Nagasaka, are theme and concept, location, a steady cash flow allowing it to invest in new attractions, and marketing strategies to appeal to targeted segments.

The Chiba Prefecture-based company’s strategy of touting Tokyo Disney Resort as a special place has been especially effective, she said.

You can see the branding efforts wherever you look, Nagasaka said, in its efforts to make the resort look like a fantasy land. Examples include logos on garbage cans, benches, on the monorail that takes visitors between the various hotels and JR Maihama Station, even in the lavatories. The venue is meanwhile super clean, with staff constantly policing the grounds.

The firm has also invested billions of yen every year to provide new attractions to ensure repeat visitors.

“A massive amount of investment has contributed to keeping the theme park fresh,” said Shun Tanaka, an analyst at SMBC Friend Research Center.

Oriental Land has said it will spend ¥200 billion between fiscal 2011 and fiscal 2020 just on its theme park business.

Due to these factors, about 80 percent of Tokyo Disney Resort’s visitors are repeat customers.

Saori Nishiyama, 22, from nearby Kisarazu, Chiba Prefecture, is one such patron.

Nishiyama, who came to the park Thursday to shop, has a yearly pass and visits four or five times a month. She said she especially likes watching the shows and parades.

“Even when the same show is performed, it has small differences each time, like characters’ movements,” so they are always fun, she said.

Located in Urayasu, western Chiba, just 15 minutes or so by train from Tokyo Station, the resort is accessible to a market of 30 million metropolitan residents. Data show that about 70 percent of visitors are from the Kanto region.

Industry figures show the resort dominates the amusement park business. According to a government white paper on leisure activities, the industry in 2010 saw sales of ¥599 billion, with Tokyo Disney Resort accounting for about 45 percent.

Back before ground was broken for the resort three decades ago, skeptics doubted it would be an enduring success.

An Urayasu official who was involved in the planning for Tokyo Disneyland said he visited a Disney theme park in the U.S. around 1977 and remembers seeing adults enjoying themselves alongside their children.

“At that time in Japan, I thought it wasn’t really common for adults to enjoy amusement parks,” said the official who wished to remain anonymous. Adults just waited around while the kids enjoyed themselves because they felt theme parks were for kids.

He just wasn’t sure whether adults in Japan would embrace the concept of also enjoying being in a theme park.

He also recalled that while Urayasu, which aimed for further development after its landfill program was completed, welcomed the arrival of Disneyland on part of that man-made land, it had concerns about potential problems if millions of visitors descended onto the city.

Oriental Land aimed to attract 10 million visitors during Disneyland’s inaugural year. Such a huge number would bring heavy traffic congestion and massive amounts of trash, disrupting the lives of local residents, he said.

Disneyland ended up attracting more than 10 million visitors during that first year, and the city eventually learned how to handle the increased traffic volumes by providing resort-bound cars and buses with a dedicated route. Oriental Land meanwhile created its own garbage-disposal facility.

As for the future, there is always the question of whether the resort will continue to be a success and keep growing.

Nagasaka of Morgan Stanley MUFG believes the loyal fan base will play a key role in the resort’s continued growth.

This is borne out by the strong visitor numbers even after the resort has raised admission prices several times, indicating they will still come if more cost hikes ensue.

Tanaka of SMBC Friend Research Center noted that although the core fans are big assets, to drastically boost visitors, for instance to more than 30 million, the resort will need to expand and cook up new ideas.

With the 30th anniversary, the resort expects a record number of visitors as well as a sharp boost in sales and profit, but after the hoopla subsides the venue will have to get more creative, Tanaka said, noting this may be difficult because the resort’s capacity is “reaching its limit.”

There isn’t enough space to create a third theme park unless Oriental Land acquires new land, but the resort could expand more by, for instance, changing its current flat parking lots to multistory ones, he said.

The firm can also try to woo more foreign tourists, experts say.

In recent years, about 3 to 4 percent of the resort’s patrons were foreigners, many from other parts of Asia, and this ratio could go up, as the government is desperately seeking to boost the number of foreign visitors coming to Japan, and more international low-cost carriers have been coming to Narita airport, which is about an hour away by train.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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