Fantasy Springs Boosts Tokyo Disney as Universal Tests LARPing

Philip Hernandez (00:01.088)
Okay, this week we're gonna talk about the earnings from Oriental Land, which is the operator for Tokyo Disneyland and the Tokyo Disneyland Resort. And then hopefully we're gonna also talk about the new Universal Fan Fest event coming to Hollywood. This is Green Tag, The Parking 30, I'm Philip, and he is Scott Swenson of Scott Swenson Creative Development.

Scott (00:20.796)
Hello, how's everybody doing? Hopefully well. Good, I can't hear you. All right, let's dive in.

Philip Hernandez (00:25.066)
Yes, we especially can't hear you because we currently when you are hearing this, we are actually in Riyadh at the IAPA Middle East Trade Summit. So if any news has come out and you are wondering, well, gosh, how come Philip and Scott are not discussing this breaking news? It's because, you know, we are recorded early. Yes. Yes, it hasn't happened yet. Yes.

Scott (00:46.338)
happened yet. It hasn't happened yet. So there's that. But and if you do happen to be listening to this and you do happen to be at the Middle East Summit in Riyadh, go up and say hi and we can listen to it together. That'd be interesting.

Philip Hernandez (00:59.979)
Yes, yes, tell us what you think about the show also that'd be nice

Scott (01:02.866)
in real time. It would be creepy.

Philip Hernandez (01:05.358)
Okay, that'd be weird. That might be a little weird. Okay, let's dive into this. I'm gonna give a little bit of a caveat for this. So Orientaland, obviously they're based in Japan and so their earnings are all in Japanese as long and so is their reports and everything. And so this is like translated material that I'm working off of. And then what I did was like took the translated material and then compared it to what a lot of analysts were saying and kind of like tried to fact check everything to make sure I was getting the correct sentiment for what's going on.

That is my disclosure, but let's dive in. So first, the headline financials. So they saw a 14.3 % year over year increase in revenue and 11 % year over year in green profit, which is bonkers. Like for context, last week we talked about Disney and Disney was only 5 % year over year revenue growth. This is 14.3. So it's quite a big jump. And of course we know the reason for that.

is Fantasy Springs that just opened up plus their seasonal events. Theme park spending also rose 11.9 % driven by the attendance and the higher guests per guest spending which we'll get into. And they also had a 30.7 % revenue surge for hotels which boosted from Fantasy Springs. So obviously this all comes back to Fantasy Springs, the new area that opened there. Yep.

Scott (02:27.814)
Right. Also, and Philip, help me. They're also a little bit behind the US as far as reopening and getting back from post-COVID, are they not? So they're still in that surge, correct?

Philip Hernandez (02:42.339)
Yeah, so

Yeah, Japan as a whole, think now has fully opened and I think they're starting, they're barely like, they're just starting to reach their like equalization dip. So they're where, you know, a little bit behind the US. they're equalizing now. But when this was happening, you're right. So it was two things together, fantasy Springs opening and like still that revenge tourism to Japan. So that's why I think the growth was so insane.

Scott (03:13.234)
Absolutely. No, I just wanted to clarify that it was... There are multiple factors, like with so many of the stuff that we report on. There's never just one reason why things happen. It's either a perfect storm or a perfect catastrophe or a perfect wonderful moment. And so this is kind of the riding the wave plus a new attraction that is very, very popular or a new area that is very popular.

Philip Hernandez (03:36.024)
Yeah, and we will talk about that too because a lot of the, your point or maybe what you're trying to allude to, I think some of the analysts have brought that up as a concern where they're basically like, yes, everything looks good now, but it's because of that revenge travel wave and it's because of this new land, but you're not opening a new land every year. So how is this going to be sustained? And so they do talk about that in their strategy, but that is a concern of.

Scott (03:59.75)
And I think that was one of the reasons that I brought it up. The other reason I brought it up is since you mentioned that we did talk about the Disney earnings call last week. I just want to make sure that we're comparing apples to apples here and we understand that why one is at 5 % and one's at 14%.

Philip Hernandez (04:14.594)
Yeah, so looking at Fantasy Springs, just as that segment, you know, obviously it was the biggest contributor to the attendance boost, but it also drove record spending, including higher merchandise sales and paid Fastpass. And here's a stat that's insane. So the Premier Access, which is their version of the Fastpass there, it accounted for over 10 % of attraction and show revenue per guest in the quarter.

which is bananas, but it really reinforces this idea where they're like, basically they're saying like all these people were coming to the parks and they were like flooding this area and they wanted to make sure they could get on these rides. So they were paying the money to like guarantee they would get on these items, which is definitely one, one, you know, direction to take with, with your pricing is to kind of hold it out there for people to do that. So,

Scott (05:10.7)
And I think that, you know, again, since it's the revenge tourism and the surge, it's absolutely a great thing to do, whether it is something that is going to be sustainable. We'll see. Time will tell. But yeah, I think it's I mean, it's clearly it's working. So.

Philip Hernandez (05:26.19)
Yeah. So they did have a lot of increased costs for staffing and whatnot, but that's all again, because they had to scale up to open a whole new hotel. mean, like, so they just need more staff. So, but you know, all that was covered by the, the surge. Although to my previous point that was brought up by some of the analysts as a concern where basically where they're like, I think some of the analysts are saying, if you look at the other areas, the other areas were softer, like, like softer than anticipated.

Um, and so, you know, Disney or Disney or Oriental land is trying to say, well, you know, overall attendance was higher and it was really because people were just waiting to get into the fantasy Springs and blah, blah, blah. But the, you know, the people counter to that were saying, well, but all the other areas were softer and you had to staff up more in order to cover this. So what happens when that becomes like when fantasy Springs also becomes normalized, then you're going to.

potentially have overall softer and you're still gonna be stuck with higher operating costs. So there's been some pushback to this and I'm just laying that out. But what they've said in Canada all this is basically Oriental is like, look, a big strategy for us is to balance new lands with seasonal events because the seasonal events are huge, especially Halloween. They call that Halloween like, I know, it's like,

What was interesting to me about this is after I translated all of this, I was like, oh, they're basically saying the same thing we've been saying.

Scott (07:03.186)
20 years. let's see. You can't open a new major attraction every year, but you can do a different seasonal event every year, and you can do a different seasonal event every year, and it costs about the same as one roller coaster over 25 years.

Philip Hernandez (07:05.355)
Yeah.

Philip Hernandez (07:12.376)
Yep.

Philip Hernandez (07:21.666)
Yeah, it was almost uncanny. they talked about how the third quarter benefited from popular seasonal events, like especially Halloween and also Christmas. So it's like the top ranking one is actually Halloween, then it's Christmas. And they credited leveraging strong contents themed on Halloween. I know that sounds awkward, but that's translated phrase is leveraging strong contents themed on Halloween and Christmas for helping achieve the record long quarterly sales. Seasonal merchandise also was a big seller for them, like

Like it seems like, especially in Japan, that whole seasonal merchandise item does really well. Also with the limited time shows, lifting per cap spending because you can also buy premier passes for the limited time shows, which like sell out. So there's all that stuff that they've worked into it.

Scott (08:11.974)
And when it comes to merchandise, let's be honest, it's not just Japan. We'll call it the popcorn bucket theory because when you can have a line that's longer to get a popcorn bucket than one of the rides or several of the rides in the park, that shows that something is working well as far as revenue generation.

Philip Hernandez (08:17.474)
Yep. Yep.

Philip Hernandez (08:26.7)
Yep. They specifically, and this is what's interesting too, since we, a few episodes ago we talked about Merlin Cutting Entertainment, but Oriental Land specifically called out in their report that guests were drawn by limited time entertainment like the villains Halloween shows and exclusive seasonal decor, which in turn boosted park admission and park spending. Huh, turns out, know, guests like entertainment.

Scott (08:53.02)
Well, and it's also, it's also when you can provide entertainment that has a fuse, you know, when you have, when you can provide an entertainment that you have to see, it's not like, well, you know, we can go see space mountain cause it's always going to be at Walt Disney world in Orlando. can go whenever, or if you could say you've got from here to here, you've got from this date to this date, it drives attendance because there's a fuse lit. goes away. Yeah.

Philip Hernandez (09:21.538)
Yep. So they overall, underscored how going forward, they're intending to balance the large scale new attractions with the seasonal events and they plan to keep investing and to steadily roll out seasonal events kind of going forward. Of course, the challenges we talked about some of them, you know, the margins were pressured by the new investment, the labor costs. They did also talk about weather, which we talked about last week, but

The weather, especially the heavy rains in October and some of the heat caused shortfalls in those time periods. Especially the shortfalls in the early Q2, or sorry, early Q3, so end of Q2. They also had higher costs of goods, which they didn't say where that came from. I'm not clear if the higher cost of goods is a tariff or a manufacturing cost or what's going on with that kind of thing.

Aside from the rain, there was also the severe heat wave that happened in the post summer, which caused a slowdown in the revenge spending that they were anticipating for the Q3. And then as I mentioned earlier, too, that the guests were concentrated in the Fancy Springs area, which was, which made the other areas have less than expected guest movement. And so which kind of made the staffing be a little bit out of whack because we had like, they had to staff areas where there was not

enough people to merit the staff in them. But then they had too many people in fantasy. So they were having trouble balancing all this. But I think all that's normal. Yeah.

Scott (10:52.442)
It's growing pains. It's growing pains. It's going to happen whenever you expand.

Philip Hernandez (10:57.186)
Yeah, so their continued direction, they do have some big developments planned. They're doing the space mountain redevelopment. They're also doing the record Ralph Attrash and they've talked about a few times. And then of course, they want to keep investing in the seasonal events and their premium upsells, the premium access to kind of expand the options for what you can do that. But they're also trying to make the resort more affordable. So they launched a college passport actually for

This one is for discount tickets to college students. They also expanded their weeknight evening tickets, because that's a thing that Tokyo Disney does. Where like, you can buy like a day of weeknight ticket that we can show up after work until they're sold out. So they are expanding those two programs. And they said that so far the College Passport has had solid sales and it's helping to fill in the parks with student groups, which is great. They're also targeting international tourists. So again, we've talked about this, but basically they're trying to

Now that Japan's borders are fully open, they're seeing an inbound in international visitors specifically from North America, Southeast Asia, Taiwan and South Korea. So they're looking at ways to entice them over but also interestingly to make it more accessible, which is something I noticed. like, for example, in the US, right, we like, I don't wanna say we don't care, but we kind of like don't really try to accommodate that. But you know, there,

They have guests that have like translation devices so they can easily talk to people. have like pre, they have signs in different languages that they just have, that cast members just have with them. So like, they're really saying we should expand that to make sure that all these guests are coming internationally can really navigate the park with complete ease, you know, and therefore to entice them because they spend more. And I thought that was an interesting take on it just because we, I feel like we don't.

really try.

Scott (12:58.416)
Well, and I think we try less because, at least in the vast majority of my international travel, English is far more common internationally than Mandarin or Japanese or whatever. There's a lot more

There's a lot more commonality in English. English kind of is the, I'm from Barcelona, I'm from Japan, but we both speak English. That's the language that we use to communicate with one another. So I think part of the reason is the practicality of the fact that English is spoken more widely around the world. And secondly, you're right, we really don't care. It's an American thing.

Philip Hernandez (13:48.13)
Yeah. yeah.

Scott (13:51.846)
But I think it's a combination of the two. I don't think it's just because we don't care. I think it's because we don't care. We don't care because we don't have to. You know, the fact that all signage, for example, in the Middle Eastern parks is both in English and in Arabic. The vast majority of signage in most of the other parks or at least most of the other airports in the countries that I've traveled to is in both the native language and English. So.

Philip Hernandez (14:07.202)
Yep. Correct.

Philip Hernandez (14:17.868)
Yep. Yep. And ours are just English basically, unless you're in, Detroit for some reason, which has Japanese signs everywhere. so yeah. So anyway, that's, that's where we kept the earnings just to kind of draw the, because last week we talked about Disney so much. So was just kind of like looking at the two things. It's pretty clear that even when we talked last week about how Disney's domestic parks for plateauing and the international ones are seeing that.

you saw that same effect, right? Because this is an international park. So you saw it like the expansion still being quite large, whereas the Disney's, you know, kind of seen plateauing or slower growth for the same period as domestic parks. The pricing, both are using very similar tiered pricing options, you know, and similar to here in the US, like the Oriental Group's guests show less pushback. Same with the guests in the US here, like they're

configuring pricing. I would argue though that Oriental Land is trying harder to come up with options for different classes of people. Because you could get a college student pass and just show up in the middle of the afterschool and then you could wait in line. And I think that's still something that is hard to do at Disneyland or like.

Scott (15:38.482)
It's almost impossible to do at Disneyland and Walt Disney World. However, when Walt Disney World first opened, all of these things were very, very popular. There were student passes. There were actually longer park hours. So there was an after dinner pass. It used to be that Magic Kingdom in the summer was open until midnight every night. So it was very common that you'd get people come later in the day for a discounted price. So it's...

Philip Hernandez (15:50.242)
Yep. Yep. Yep.

Scott (16:06.244)
It's the same basic model and structure just at different time periods, at different time periods in the growth and the expansion of these parks. So it doesn't seem like it's anything particularly revolutionary, but I think it's also based on need. know, if they're looking at it going, gosh, you know, we're kind of soft after five, let's do an after five pass. We're not getting, we're not training our next generation enough, our next generation of families with young children enough. So let's get a college pass.

Philip Hernandez (16:27.704)
Yep.

Scott (16:35.91)
You know, it's, as we talked about last week with the Disney stuff, this is adapting to the lifestyle and adapting to the needs of the park and the desires of the guests coming to the

Philip Hernandez (16:55.116)
I think your point about how it's nothing new, what I found most interesting about this was that how you could look at an operator that is not Disney, know, Oriental Land is not Disney and it's a different country, but they are looking at the same, almost the same exact trends and problems. That to me was the more interesting thing is that you're right in that it's like, this is basic, not rocket science-y. I'm like, yes, that's the point. The point is that like, I think we're pretending

that everything is rocket science when it comes to theme parks, it's really not. Like, because if you can look at like a brand that's not even Disney and it's a different country, but they're having the same problems where guests don't want to go when it's too hot. You know, like, yeah, and I think that's again should, I don't know, I keep saying this over and over, but I'm like, we should be making more plans. What do we do about the heat? What, how we plan for these rain contingencies? Like, how do we encourage multi-

Scott (17:27.398)
Mm-hmm. True.

Scott (17:51.248)
Yeah, Disney, quite honestly, Disney Sea is as from what I've seen when the park was built, they were more the fact that, just look at any look at any video or still photo of Disney Sea and you look at their their high end moving fixtures and they are all they all have rain protectors on them. They all were built to operate in any weather. So, you know, I think that's happening. I and I hope that it will continue to happen.

I think that, you know, it's, but we've also talked about it. It's really, it's really hard.

to find the capital investment to make those kinds of things because it's impossible to market it. You're not going to say, now with more shade, no one's going to come to a park because it has more shade. They may enjoy it more. They may come back more often. But it's not something that is sexy enough to put into the advertising. And that's certainly in the United States one of the biggest challenges as far as making those kinds of creature comfort additions and alterations to the park.

It's very quiet because again, you know, no one's going to say, come back to come back to Animal Kingdom this year. We now have 30 % more water fountains. But it's not, but it's not going to drive you to go or not to go. It's something to, you know, it's not going to, it's not going to be, there's not a conversion rate to that into buying tickets.

Philip Hernandez (19:08.298)
Yeah. I mean, I would like to hear that, but yeah, that's because I'm old.

Philip Hernandez (19:20.952)
Yeah, yeah. Okay, well, let's leave the earnings aside and that whole thing aside, let's come back to the US and look at the Universal FanFest nights. this is, we talked about this before when they announced it and this news is old by the time that you guys listen to this, but we never on this show really talked about the specifics for what they were planning, which is what we know now because tickets went on sale, people have been buying tickets, and now we have the specifics about what they're actually doing.

You know, for context, this is an after hours event that is new to Universal Studios Hollywood. And it has been described by the design team as like if Halloween Horror Nights and Comic-Con had a baby. Literally an exact quote from the press releases, how they describe this. So it's 12 nights, select dates between April 25th and May 18th. And it includes, you know, different IPs they haven't used before. So we had the details now, so what they're going to actually be doing.

I'm gonna go through a quick summary of them. We can talk about each one. But the biggest one they're pushing seems to be the Back to the Future Destination Hill Valley, which essentially it's like you're gonna go, because you know, Universal Studios Hollywood still has that set. They still have the clock tower facade and that set there. So essentially they're gonna make that, they're gonna decorate that area. They're gonna put like a DJ down there. They're gonna have some like people that are dressed up as Marty.

and as the professor and they're gonna have like lightning hit the tower on regular basis. So you're gonna be able to take like the tram over to this area and get off and walk around this kind of area that's almost like they've recreated that scene basically from the movie and you're gonna be able like hang out in that area and watch that stuff. I'm not sure what the like, I don't want to say like the point of that is, but from what I read, I don't see like.

what you're going to be doing. It just says like several times each night, lightning will strike the clock tower, sending Marty McFly back to the future. So it's kind of like you just exit and explore the space. So

Scott (21:29.532)
Well, again, it's larping. It's creating a world that you... And again, that's why they make that Comic-Con reference. And don't think for a moment that you won't see a million and one guests showing up dressed as their favorite character from whatever fan moment the FanFest is talking about. Yeah, I think that this is, again, another...

Philip Hernandez (21:32.512)
Yeah, it's LARPing. Yeah.

Philip Hernandez (21:51.648)
Yeah, I think so. Yeah.

Scott (21:57.49)
another moment where theme parks are looking at things like Comic-Con, Megacon, Gen-Con, they're going, my gosh, look at all of these interactive character-driven...

moments that are having gigantic impact and have significantly less financial investment than creating an entire attraction. The other thing that I think is interesting and I think part of the reason, and this is going outside the industry for a moment, but I think, parallel industry, I think part of the reason they're pushing the Back to the Future so hard is the Back to the Future musical is doing incredibly well.

doing incredibly well. It's opening in multiple countries. It's touring. It's a nice comfort food nostalgia moment that I think is multi-generational. And there's so many reasons to do it from a content standpoint. And they're looking at their assets.

They're going, hey, we got this. What can we do with it? I know. Let's make it look like lightning strikes it. You know, it sounds it sounds to me like it's almost going to be a bit show like, but still creating it gives you what Universal started out. know, Universal's one of their very early or their very early taglines was ride the movies. And this is now live the movies. You know, you can now live in your favorite.

your favorite fan-based IP.

Philip Hernandez (23:32.238)
So we don't have too long left, so I think I'll just, what I wanna say is overall I wanna give that it seems like all these different elements are drawing from Universal's different experiments across the world. And they're putting it all into this one event. So while this one, to Scott's point, is more like we're repurposing this area that we have to make it like a little LARPing walk around experience, the other experiences they have planned are.

not like that. are different. They are doing a walkthrough experience on with Star Trek that's more like the haunt side and they are doing similar to what I reported on last year from Universal Studios Japan where they did the special made 3D show. We've talked about that. They are bringing that concept also. So you have a 3D experience. So it's like they're combining the different, you know, remember like last year at Universal, I talked about the Resident Evil

immersive outdoor kind of experience. I think that this one, the Back to the Future thing is similar to that, where you're led in big groups into an area and there's show elements.

Scott (24:38.63)
And quite honestly, now that they've got enough universal parks, can test it out at Universal Hollywood and what works, can take those assets on tour. And other universal properties.

Philip Hernandez (24:43.276)
Yep. Correct. Yeah. So that's what this, on a macro sense, that's what this seems like to me, is they are testing.

Scott (24:50.476)
Yeah, it's pop-up. They're doing pop-up in their own parks.

Philip Hernandez (24:53.708)
Yes, yeah, which I think is brilliant and something that they haven't done in the past.

Scott (24:57.54)
is internationally popular right now. It's internationally popular right now. It's a way to test out what is worth investing a bunch of money in, and it's also a great way to, in the short term, figure out how can we constantly have new seasonal elements and new seasonal experiences that aren't necessarily tied to a specific holiday.

Philip Hernandez (25:17.672)
Yeah, it's also not something they were capable of doing in the past because their teams did not talk to each other. okay, so now that we have that thing, I'm gonna try and get through the other elements. So, as I mentioned, so in Hollywood, if you all know the park, Hollywood has the old Walking Dead experience, which, you know, they shut down the Walking Dead, but they use that now for Halloween Horror Nights. But what they're gonna be doing is converting

Scott (25:23.602)
Correct. That's true.

Philip Hernandez (25:46.582)
that into a walkthrough experience for the Star Trek Red Alert. And instead of, it's not like a, it's still gonna be a walkthrough like Horror Nights in that, you know, they're building a set that you walk through, but this is gonna be small groups and they're gonna be going through different show scenes. So this to me is a lot more like what they tried to do with Hotel Albert in Japan, which is like, kind of like, you know, you like groups go in and there's like a.

a show scene moment and then you move to the next show scene. So it's more like a show in that way, but it is a set they are creating. So it seems to be more investment than the Back to the Future one because Back to the Future is like recycling assets in an outdoor space. And this one is like, we're building a haunt, but the haunt is not scary and we're having actors say lines instead of scare you, right? But it's the same idea. In my brain, it's the same concept because as Scott has mentioned so many times, know, like haunts are built

Scott (26:36.466)
Right.

Philip Hernandez (26:43.318)
like theater you walk through. So there are like more cinematic scenes, especially in Universal haunts, you know, it's like they have big rooms with scenes. So to me, this is gonna be like the same concept, but instead of scaring you, they're talking.

Scott (26:55.568)
Yeah, to me, it goes back to what they used to do in Vegas at the Star Trek experience, where you walk through the enterprise and engage and get to once again, just like they're doing with Back to the Future, give you a chance to live within your favorite IP.

Philip Hernandez (27:15.182)
And speaking of that, they're also building the Dungeons and Dragons, Secrets of the Waterdeep, which is in sound stage 15, which is also usually a place they use Halloween Horror Nights for. This one seems like it's gonna be, I'm not sure what this is gonna actually be like. What it is billed as is that visitors will be recruited to join an adventure through multiple scenes and save a city. Who knows, there's supposed to be a giant monster in this one that's created by the Jim Henson company.

So that one seems like it's a lot more, like much more similar to the Halloween Horror Nights because it's higher action. And then you're like fighting a monster. So much more like a maze. So they're probably gonna be like bringing you, I don't know, who knows? But that one's another set-based one.

Scott (27:58.418)
Once again, if we're going to sum it all up, it's LARPing comes to universal.

Philip Hernandez (28:03.468)
Well, but in different methods, right? Because there's also the, yeah.

Scott (28:05.956)
Right, but LARPing is not one thing. LARPing is a very large umbrella, but it all comes down to living in a world that is created for you.

Philip Hernandez (28:15.694)
Well, yes, I agree with that on the whole. I would say that they're trying to do different levels of it. like, know, like back to the future, you're just going and you can do your own free adventure, like pure LARPing. But then these two are more guided experiences. Like you're still LARPing, but there's a guided experience, just like a haunt, right? And then the Jujutsu Kaisen one is, or is it Jujutsu Kaisen, or is it, hold on, it's, yes, it is Jujutsu Kaisen. So Jujutsu Kaisen is a 4D,

So in that one, like there's no guest agency. You just like you walk in, you watch a thing. So it's almost like they're making these levels, right? They're like, like highest levels back to the future show up and wander around. You could spend all night there, LARPing to your heart's content versus the guided experiences versus you just go into a theater and you watch an exclusive experience.

Scott (29:02.566)
testing to see which pop-up works.

Philip Hernandez (29:04.62)
Yes, exactly. I think the idea that they're testing all these, they also have photo ops for other IPs and like blah, blah. But it does seem like they're really putting the gambit of just trying to see which ones are most popular. And also, I think it's a diversity of investment as well.

Scott (29:26.994)
Makes sense to me. Makes sense to me. You know also makes sense? Time is finite, especially time for our show.

because we are out of time or just about there. once again, I'm going to encourage all of you to see what actually happens in Green Tagged Unhinged and join our Patreon version of the show where we dive deeper and a little crazier into some of the topics. You can go to Patreon and search Green Tagged and you'll find us and hear more, have more access to us where we answer questions directly from some of our listeners, which we did last week and we will probably do again this week, assuming we get

Philip Hernandez (29:34.766)
Okay.

Scott (30:04.714)
get more listeners who will ask questions for us, which we love. But until then, until next week, where we will definitely come back, and you can just listen to us right here, this is Green Tag Theme Parking 30. I'm Scott Swenson, and I'm here with my co-host, Philip Hernandez, and we will see you next week.