Posted Tuesday, November 9, 2004 8:44 AM | Contributed by Jeff
French theme park operator Euro Disney, which announced a life-saving debt restructuring in September, fell deeper into losses in its 2003/04 fiscal year due to royalty payments and increased operating costs. The company said it made a net loss of 145.2 million euros in the full year to the end of September, after a 56-million loss a year earlier.
That's what amazes me... they want to build more parks when they can't even break even with the parks they currently have! If you can't make a park in Europe turn a profit, how can you expect to do that in Hong Kong or Korea?
Ummm...because their Asian parks have been extremely successful while their European park has been problematic from Day 1?
Am I the only person who thinks that France was the wrong place to build Euro Disney? I can't help but think that park would have been more successful in a different country. My gut instinct would be to put it in Germany instead...
Jeff: That Reuters link results in a friendly 404.
"And a South Korea park sounds good? Could this be the first true Disney theme park to close?"
I think closing Disneyland Paris could be a real possibility. In one of the many books about Eisner (I think it was "Keys to the Kingdom"), Disney was ready to pull the plug on the resort in the mid-90s if they didnt' get the kind of concessions they wanted from the banks. They pretty much got everything they wanted from their debtors, and are still bleeding to death from red ink. This is a bad situation...short of the banks forgiving debt (which isn't going to happen), I'm not sure how they pull this one out.
Didn't Disneyland Paris have a few years (or maybe it was quarters) of profitability (or at least positive cash flow) prior to building the Studios?
It would be a true shame if this park closed---it is the most beautiful of the three Castle Parks I've been to, hands down, with some interesting updates to classic attractions (the Parisian Space and Mansion are both, IMO, even better than the stateside versions.)
I don't think the problems with this resort are as simple as just building it in the wrong place, but that might be a start. They initially mis-read their audience, much of Europe (unlike Asia) suffers from a backlash towards US cultural imperialism, DSP was a disaster that is yet to recover, and there are way too many hotel rooms on that property.
Originally, they were competing between putting it in france on what was solid wasteland and unfriendly people, and round the corner from me here in Essex, UK, on a marsh that would need draining and securing, with very friendly people. It was cheaper to build it in france, but the french people's reputation for arrogance and annoyance stops a lot of people from going, including myself. What's the point of travelling thousands of miles to a park where you're not really wanted?
Had they built it here in the UK, where there is a proven profitable theme park chain (tussaud's, of course), they would have made money with some native english speaking folk, negating the need for multi-lingual signs and the extra cost of the recorded messages with all the french slurs and snorts on them.
I agree that France was not the place to build a Disney park. I don't think that France has embraced American things like other European countries and maybe there is something they dislike about a park that pretty much forces American culture down their throats? Germany would have been my choice as England already seems to have its share of theme parks, even back in the '90s when DLP opened.
The park was probably doomed from the start. Disney seemed to misjudge how people would interpret the park, thinking that it would be destination resort like WDW. I'm sure the original name of the property- EuroDisney- didn't help matters either.
Yeah, Asian markets have seen a huge upswing in tourism. But are people going to travel from the U.S. and Europe to visit Asian Disney parks? Probably not. The target audiences for those parks is going to be people living in those countries; countries where it seems a lot fewer people have a load of disposable income.
My uneducated view: They were making good progress in the last few years for the Magic Kingdom there, but then they decided to build a second gate in France. BIG MISTAKE. By all accounts it's the worst of the Disney parks. Makes DCA look like it's loaded with E-ticket attractions. Attendence is dismal, of course. Makes DCA look like a success.
Maybe the addition of a second gate would have been a good move had they completed the park and brought it up to the usual Disney standards. A second gate, done right, could have made DLP a destination park, if not for the French then perhaps for people of other European countries. But with the dismal review of the park, I'd be surprised if many people in Europe feel the burning desire to go.
Rob: I think you underestimate the amount of disposable income in Korea. This is based only on anecdotal evidence, but there are plenty of grad students here at UM from Korea paying their own way to the tune of US$20K/year, just for tuition. Given China's deregulation and accompanying growth, well, that park seems like a good bet if they target the audience well. And, while the sheer numbers might be smaller, the other entertainment options in those regions *might* present less competition. What remains to be seen is whether China and Korea embrace Disnified US culture in the way that Japan has, and France has not.
I probably do underestimate the amount of disposable income in those Asian countries, although I'm still willing to bet that the country-wide averages are lower than those in the U.S. or many European countries. This could be an example of Disney taking advantage of what it sees as a future opportunity, in which case I think it makes some sense... but with the economy growing in countries such as Hong Kong and Korea, is a Disney vacation the first (or second or third) thing on peoples' list?
So Moosh, DLP is even prettier than Disneyland (post-rehabs, of course)?
I'm still not sure why building the park in France was the main problem. Parc Asterix has been operating since 1989. That's about three years prior to Disneyland Paris. I haven't heard anything bad financially about that park, so I don't buy the "France was a bad location" idea.
IMO, Disney didn't and maybe still doesn't know their market there. Opening a park trying to sell American culture probably wasn't the best marketing strategy. Add to that the lackluster foreign relations between the US and France, and I'm not suprised they don't want to visit the American park.
I'll have my Freedom Fries covered with Idiot Cheese
Perhaps the reason France was a bad idea is because of the French peoples' reluctance to embrace American culture like Germany seems to do. Parc Asterix is probably a lot more "in tune" with the desires of French guests than Disney. But that's just my guess...
Which is exactly what Dave and a couple other people said. Anyway, Up till now I was under the impression that EuroDisney operated as a separate entity from the rest of the Disney parks. I guess I was wrong.
Parc Asteriz also uses a hugely popular character that was created in France and is tailored to French tastes, not American like Mickey and Disneyland. You also forget that even Tokyo Disneyland also did bad back when it opened, but they turned that around by instead of having it as just a new theme park, instead it's like a trip to America without leaving Japan, and no fat people. ;) This worked extermely well, obviously, and it proves that the parks can do well, they just need an image.