Japan, Tourists Flee Indoors Due to Heatwave... Hello Kitty Smiles, Disney Cries

Japan Records Highest Number of Overseas Tourists in July Ever
Same Month Sees Highest Average Monthly Temperature in 126 Years

Local entertainment companies in Japan, which had expected a boom due to a record influx of overseas tourists, are experiencing mixed fortunes. The cause is the heat and heavy rain.

According to Bloomberg on the 4th (local time), visitor traffic has dried up at Tokyo Disney Resort, a mecca of outdoor theme parks in Japan. The record-breaking heatwaves and heavy rains during the summer have driven tourists indoors.

[Image source=EPA Yonhap News]

As a result, the stock price of Oriental Land, the operator of Tokyo Disney Resort, has plummeted about 25% since the beginning of this year. This is the seventh worst stock performance among companies listed on the Nikkei 225, Japan’s representative stock index. Operating profit is expected to decline in the first half of the fiscal year ending in September. The stock price of Fuji-Q Co., operator of Fuji-Q Highland, famous for its roller coaster amusement park, also fell 38% during the same period.

On the other hand, companies providing indoor entertainment enjoyed a windfall. Sanrio, which operates indoor theme parks featuring popular characters such as Hello Kitty, a symbol of pop culture, saw its stock price soar 93%. Especially with an increase in visitors from Korea, Taiwan, and China, both operating profit in the first quarter (April to June) and the annual outlook exceeded market expectations. The stock price of Round One, which operates bowling alleys and video game centers, also jumped 56%.

Like most of the world, Japan also suffered from extreme heat this year. According to the Japan Meteorological Agency, the average monthly temperature in Japan in July reached the highest level since 1898. Despite the record number of overseas tourists visiting Japan in July, the stock prices and performance of outdoor theme park operators have been sluggish. The heatwave troubling these companies is expected to continue until November.

Norikazu Shimizu, an analyst at Iwai Cosmo Securities, said, "With the risk of heatstroke looming, families with children will avoid going out or stay indoors. If this heat continues, the shift from outdoor to indoor entertainment will become even more pronounced."

Meanwhile, on the same day, the Nikkei index briefly plunged more than 1,300 points in the morning, breaking below the 38,000 mark. This is interpreted as being influenced by the overnight sharp declines in the three major U.S. stock indices in New York due to renewed concerns about a recession. In particular, the tech-heavy Nasdaq index closed down 577.33 points (3.26%) at 17,136.3, marking its largest drop since August 5. Nihon Keizai Shimbun reported, "Risk-averse sentiment has strengthened in the Tokyo stock market as well, spreading selling pressure," conveying the market atmosphere.

This content was produced with the assistance of AI translation services.