Oriental Land Co., which operates Tokyo Disney Resort, has fallen into the red for the first time since the company went public in 1996, as attendance plunged about 70% in fiscal 2020 from a year earlier.
Tokyo Disney Resort comprises Tokyo Disneyland, Tokyo DisneySea and adjacent hotels.
In a bid to turn its earnings around, the company has not only adopted a system in which ticket prices change in keeping with how crowded the park is expected to be, it is also considering charging for its so-called Fastpass, which lets holders enter popular attractions ahead of other guests.
Oriental Land's consolidated financial statements for the fiscal year ending March 31, 2021, were released on Wednesday. They showed that the company posted net sales of 170.5 billion yen, down 63.3% from the previous year, with a net loss of 54.1 billion yen, compared with a net profit of 62.2 billion yen in the previous fiscal year.
Executive director Akiyoshi Yokota said during an online press conference, "Our business environment and the issues we face have changed considerably."
Both Tokyo DisneyLand and Tokyo DisneySea were forced to temporarily close for about four months from the end of February last year. Although both resumed operations in July, tickets can only be purchased online in advance and daily admissions have been temporarily reduced to around 5,000 people.
As a result, attendance during the year ending March 31, 2021, dropped 70% year-on-year to 7.56 million, the lowest figure since Tokyo DisneyLand opened in 1983.
The personnel expenses of employees and depreciation costs for rides account for a significant part of the cost of operating leisure facilities. Oriental Land has cut the remuneration of its directors and employees' bonuses, and also used government subsidies designed to help businesses pay part of leave allowances to employees. However, it was unable to prevent itself from falling into the red.
It is difficult to foresee any bright prospects for the future, either.
Oriental Land did not make public its financial forecasts for the year ending March 31, 2022, saying, "It's difficult to make a rational estimation."
Because Tokyo Disney Resort is located in Chiba Prefecture, it has not been subject to the third state of emergency declared earlier this month. But if infections with the novel coronavirus spread further, the local government could ask amusement facilities to suspend their operations.
-- Expansion still a go
Oriental Land plans to greatly expand Tokyo DisneySea, opening by fiscal 2023 new areas described as "a magical spring that leads to a world of Disney fantasy." Although the company said there has so far been no change in the main investment plan, it could be forced to modify its scenario if the COVID-19 pandemic lasts for a protracted period.
Oriental Land announced on Wednesday that Kenji Yoshida, 60, currently an executive officer, will be promoted to serve as its new president. Current President Kyoichiro Uenishi, 63, will step down and become a special advisor.
Yoshida is scheduled to take up the post on June 29. It will be the first time in 12 years for Oriental Land to have a new president, with the previous change made in 2009.
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