Tokyo Disney Resort owners the Oriental Land Company (OLC) have set out an eight-year blueprint for long-term growth by reducing attendance levels at their theme parks to below pre-pandemic levels.
The ambitious strategic program, set out in two OLC press releases, outlines a medium-term goal from 2022 to 2024 and a long-term plan to be realized by 2030, emphasizes greater guest experiences, more sustainable operations, and an overall aim to “pandemic-proof” the business.
And, while the OLC is a separate business entity to the Walt Disney Company, which only operates the Tokyo franchise, cross-pollination of financial synergies could end up in Disney’s U.S. parks as well.
Several of the strategies outlined in OLC’s long-term proposals, which have been inspired by recent operational changes from the effects of the COVID-19 virus, resonate with some of the measures Disney has already quietly dabbled with at Walt Disney World and Disneyland Resort.
These include the addition of more exclusive park and hotel experiences, and this seems to be a fundamental pillar of Tokyo Disney’s openly-stated approach.
And, if it achieves OLC’s detailed goals of lowering their maximum attendance levels from prior to the start of the pandemic in 2020, while also raising revenue, it’s hard to see how this policy wouldn’t be adopted by Disney worldwide.
Here’s how OLC sets out its two-pronged vision for the group’s financial future:
Tokyo Disney Resort 2024 medium-term plan
- Enhance guests’ experience value: OLC aims to offer a comfortable park environment by bringing down the daily attendance limit to below the level before the pandemic started. The group will also take flexible actions to meet diversifying guest needs and roll out decisive new measures to help guests find new experience value, thereby enhancing the value they gain from experience.
There is a lot of business-speak here, but the essential part of the message is in helping guests “find new experience value,” which strongly suggests adding themed experiences with a higher price point and limited attendance, much like Walt Disney World’s recent After Hours events, private photography sessions, and Disney Vacation Club specials, which have all proved popular.
- Restore financial performance: While taking steps to attract guests back to the parks, OLC will aim to restore its financial performance in phases. By expanding capacity through the opening of Tokyo DisneySea Fantasy Springs and attracting guests at a higher level, OLC will aim to achieve in a consolidated operating profit of at least ¥100.0 billion in financial year 2024, a record high consolidated operating cash flow, and a return on equity of at least eight percent.
The giveaway phrase here is “attracting guests at a higher level.” It’s no secret that fewer guests paying more money is a successful theme park strategy all-round, and it sounds like OLC aims to introduce more special events based around new attractions, such as their massive $2.5 billion Fantasy Springs expansion, which includes a luxury hotel.
- Enhance quality of park experience: By bringing down the daily attendance limit from the pre-pandemic level, OLC aims to provide an environment that offers consistent comfort. The parks’ appeal will be further enhanced with the addition of new content during the Medium-term plan period, including Fantasy Springs and the remodeling of existing facilities. Furthermore, OLC will offer new optional experiences in an effort to meet guests’ high expectations and needs. The execution of such measures aims at ensuring high-quality park experiences, which will hopefully lead to increased earnings.
While not mentioning specific events, it does seem clear the Tokyo theme park experience will become more exclusive and almost certainly more expensive as a result. Disney has raised the bar substantially with new ideas like the Galactic Starcruiser hotel, but the cost inevitably goes up, too.
The Medium-term plan goes on to state it aims to even out attendance levels across weekdays, holidays, and the high and low seasons, and that the overall annual attendance can ultimately be raised while lowering the daily attendance.
It’s unclear exactly how OLC would do this, and if it would translate to the U.S. parks, where visitors are more restricted by seasonality and school schedules such as spring break and other holidays.
The press release also points out that one of the positive effects of the pandemic has been that in reducing attendance numbers and limiting them by requiring theme park reservations, OLC has been better able to control the use of resources and address environmental changes, thus reducing their overhead.
Tokyo Disney Resort 2030 Plan
Building on the guidelines of the medium-term plan, the longer-range blueprint sets out different goals, with its top priority of being more sustainable and flexible, especially after the sudden cessation of business caused by the virus.
Both employee and guest “happiness” are high on the agenda, and it sounds like OLC wants to increase their range beyond just their theme parks and resorts into the community in general, creating even more awareness of the brand.
Under the heading of sustainable business development, the news release reiterates the need for “higher value” experiences, insisting:
- Existing businesses: The OLC Group will seek higher added value for Tokyo Disney Resort as a whole by addressing diversifying guest needs and fluctuations in demand.
- New businesses: The OLC Group will engage in businesses that help resolve issues faced in existing businesses and increase their value, possibly obtaining new earning opportunities.
These two points simply underline the need for the “higher revenue from fewer guests” model and suggest guests will see the higher-value experiences well into the future.
However, the long-term plan also highlights eight key areas of environmental, social, and governance issues that will form the basis of their sustainability efforts.
- Employee happiness – In an effort to remain the chosen employer of employees, implement measures to help them feel a sense of joy and accomplishment (job satisfaction) and establish a comfortable and supportive workplace environment and internal systems.
- Happiness of children – To achieve a thriving society by nurturing the dreams and minds of children, who are our future, implement measures that resonate with children, engender their trust, and resolve social issues pertaining to children, through the Tokyo Disney Resort business.
- Diversity & inclusion: To address changes in society and customer needs and conduct business activities in which diverse customer values are respected, implement structured measures to ensure human rights are respected, review existing products and services, and build systems to give due consideration to diversity, among others.
- Supply chain management: Develop a policy to achieve sustainable procurement in collaboration with suppliers.
- Measures to address climate change & natural disasters: Produce and procure renewable energy, take energy-saving actions, install environmentally friendly design, etc. to reduce the risk of climate change and adapt to climate change with enhanced resilience in efforts to increase the sustainability of business.
- Recycling oriented society: Implement measures to save resources and reduce waste pertaining to products and services, and promote the sustainable use of resources in order to contribute to the development of a recycling-oriented society.
- Stakeholder engagement: To evolve business activities and contribute to achieving a sustainable society, implement measures to attribute importance to appropriate and open information disclosure to stakeholders and dialogues with them.
- Fairness in corporate management: Ensure all laws and regulations and the Corporate Governance Code are complied with, and establish management systems that allow flexible responses to changes and facilitate growth.
This sounds much more like the essential Disney company ethos for community outreach and environmental awareness.
It all adds up to a fascinating potential blueprint for the Disney future, with an emphasis on new experiences, and less crowded conditions in the theme parks. Is this worth higher prices? Only the consumer will decide in the months and years to come.
More importantly, will this all translate directly to Walt Disney World and Disneyland? No-one is saying for now, but it seems certain the company’s head honchos in Burbank will be watching very closely.