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Travel & Leisure

Tokyo Disney takes 6% profit hit from typhoon and labor costs

China travel ban risks pain for theme park operator after soggy year

Overall visitors to Tokyo Disney likely fell from a year earlier during April-December period. (Photo by Yuki Masuda)

TOKYO -- Tokyo Disneyland operator Oriental Land is likely to report its first profit decline in three years for the April-December period after a powerful typhoon last autumn forced a rare closure of the theme park, Nikkei has learned.

Group operating profit is seen falling to about 100 billion yen ($915 million), down 6% on the year, with increased labor costs also contributing to the decrease.

Oriental Land is already forecasting a 16% drop in annual operating profit from last fiscal year's record high. Its results serve as an indicator of consumer spending and tourism trends in Japan.

How the remainder of the current fiscal year to March turns out will depend in part on the impact of the new coronavirus outbreak. China has told travel agencies to suspend overseas group tours effective Monday. Chinese tourists are frequent visitors at the Tokyo theme park.

When Typhoon Hagibis slammed into Japan in October, the Disney resort was closed all day on a Saturday, the first day of a three-day holiday, and stayed closed the following morning as well. The storm hit during the park's usually busy Halloween season. 

The closing was the park's first since the March 2011 tsunami. Visitor numbers were also likely down in December, one of the resort's busier months, owing to such factors as inclement weather. 

Sales for the nine-month period likely fell about 2% to around 390 billion yen.

The new Soaring: Fantastic Flight attraction, which opened in July, has helped sustain park attendance. But rising labor costs have become a weight on earnings growth as the company takes such steps as upgrading temporary hires to long-term employees.

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