Euro Disney case

Disneyland Park is one of the theme parks belonging to the Walt Disney Company. It is settled in Marne-la-Vallée, near Paris (France). The theme park opened on April 12th 1992 as Euro Disneyland. In 1994, it was renamed Disneyland Paris until 2002. It is now known as Disneyland Resort Paris. A few years ago, its creation had given rise to a general enthusiasm and to many expectations among the French people affected by a period of unemployment. There is an anecdote illustrating the importance of the project : Disneyland Park's CEO was asking by a journalist whether the building of the park would be late or not because the opening was planned on April 12th 1992 at 9 a.m. Smiling, he answered that the opening would be slightly late and that it would take place on the same date but at 9.01 a.m. The cost of the building operations reached 45 billion francs and the park presently covers more than 60 hectares.

Tags: Euro Disney case, Disney diversification, Euro Disney failure, Euro Disneyland case study, Euro Walt Disney case study

[...] In 1992, after only eight months, Euro Disney had lost 1.5 billion francs. At the end of 1993, the net losses reached 5 billion francs and the park was said to collapse. The Walt Disney Company had never undergone such a disastrous situation. The initial failure can be explained by various reasons but there are three major contributing factors : the European economic recession : just as Euro Disney opened, Europe was in the middle of an economic slump. Euro Disney felt that they could overcome this issue, however, Europeans had little spending power at this time. [...]

[...] It was a flop : the expected revenues of Euro Disney were down. There was an enormous amount of properties involved in the business such as hotels and park's attractions. But the real estate companies run the theme park. The park had to pay a lease to the real estate companies which had invested their money at the beginning. The initial investments of the park were split between the real estate companies and Euro Disney properties. By 2005, the estimated returns were pretty good because Euro Disney seemed to have reduced its losses. [...]

[...] The wish to focus on the specificity of the Disney hotels, by developing unique services and advertising so that the visitors sleep in these hotels. The marketing strategy insists on the advantages of the Disney hotels such as the proximity with the theme park, some original activities such as breakfast with some Disney characters. The wish to distinguish the new visitors from the ones who have already come in terms of marketing and sales : there is a selling policy whose aim is to attract the new visitors and to establish loyalty with the visitors who already know the park. [...]