Euro Disney
Case Study: 1
The Not-So-Wonderful World of Euro Disney
BONJOUR, MICKEY:
In April 1992, EuroDisney SCA opened its doors to European visitors. Located by the river Marne some 20 miles east of Paris, it was designed to be the biggest and most lavish theme park that Walt Disney Company (Disney) had built to date – bigger than Disneyland in Anaheim, California; Disney World in Oralando, Florida; and Tokyo Disneyland in Japan.
Much to Disney management’s surprise, Europeans failed to “go goofy” over Mickey, unlike their Japanese counterparts. Between 1990 and early 1992, some 14 million people had visited Tokyo Disneyland, with three-quarters being repeat visitors. A family of four staying overnight at a nearby hotel would easily spend $600 on a visit to the park. In contrast, at EuroDisney, families were reluctant to spend the $280 a day needed to enjoy the attractions of the park, including les hamburgers and les milkshakes. Staying overnight was out of the question for many because hotel rooms were so high priced. For example, prices ranged from $110 to $380 a night at the Newport Bay Club, the largest of EuroDisney’s six new hotels and one of the biggest in Europe. In comparison, a room in a top hotel in Paris cost between $340 and $380 a night.
Financial losses became so massive at EuroDisney that the president had to structure a rescue package to put EuroDisney back on firm financial ground. Many French bankers questioned the initial financing but the Disney response was that their views reflected the cautious. Old world thinking of Europeans who didn’t understand U.S.-style free market financing. After some acrimonious dealings with French banks a two-year financial plan was negotiated. Disney management rapidly revised their marketing plan and introduced strategic and tactical changes in the hope of “doing it right” this time.
A Real Estate Dream Come True : The Paris location was chosen over 200 other potential sites stretching from
The Not-So-Wonderful World of Euro Disney
BONJOUR, MICKEY:
In April 1992, EuroDisney SCA opened its doors to European visitors. Located by the river Marne some 20 miles east of Paris, it was designed to be the biggest and most lavish theme park that Walt Disney Company (Disney) had built to date – bigger than Disneyland in Anaheim, California; Disney World in Oralando, Florida; and Tokyo Disneyland in Japan.
Much to Disney management’s surprise, Europeans failed to “go goofy” over Mickey, unlike their Japanese counterparts. Between 1990 and early 1992, some 14 million people had visited Tokyo Disneyland, with three-quarters being repeat visitors. A family of four staying overnight at a nearby hotel would easily spend $600 on a visit to the park. In contrast, at EuroDisney, families were reluctant to spend the $280 a day needed to enjoy the attractions of the park, including les hamburgers and les milkshakes. Staying overnight was out of the question for many because hotel rooms were so high priced. For example, prices ranged from $110 to $380 a night at the Newport Bay Club, the largest of EuroDisney’s six new hotels and one of the biggest in Europe. In comparison, a room in a top hotel in Paris cost between $340 and $380 a night.
Financial losses became so massive at EuroDisney that the president had to structure a rescue package to put EuroDisney back on firm financial ground. Many French bankers questioned the initial financing but the Disney response was that their views reflected the cautious. Old world thinking of Europeans who didn’t understand U.S.-style free market financing. After some acrimonious dealings with French banks a two-year financial plan was negotiated. Disney management rapidly revised their marketing plan and introduced strategic and tactical changes in the hope of “doing it right” this time.
A Real Estate Dream Come True : The Paris location was chosen over 200 other potential sites stretching from