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BONJOUR, MICKEY!
In April 1992, EuroDisney SCA opened its doors to European visi-
tors. 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 Disney-
land in Anaheim, California; Disneyworld in Orlando, 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 Dis-
neyland, with three-quarters being repeat visitors. A family of four
staying overnight at a nea
y 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
ack on firm financial ground. Many French bankers questioned
the initial financing, but the Disney response was that their views
eflected the cautious, Old World thinking of Europeans who did
not understand U.S.-style free market financing. After some acri-
monious dealings with French banks, a two-year financial plan was
negotiated. Disney management rapidly revised its 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 Portugal through Spain, France, Italy, and into Greece. Spain
thought it had the strongest bid based on its yearlong, temperate,
and sunny Medite
anean climate, but insufficient acreage of land
was available for development around Barcelona.
In the end, the French government’s generous incentives,
together with impressive data on regional demographics, swayed
Disney management to choose the Paris location. It was calculated
that some 310 million people in Europe live within two hours’ air
travel of EuroDisney, and 17 million could reach the park within two
hours by car—better demographics than at any other Disney site.
Pessimistic talk about the dismal winter weather of northern France
was countered with references to the success of Tokyo Disneyland,
where resolute visitors
ave cold winds and snow to enjoy their
piece of Americana. Furthermore, it was argued, Paris is Europe’s
most-popular city destination among tourists of all nationalities.
Spills and Thrills Disney had projected that the new
theme park would attract 11 million visitors and generate over
$100 million in operating earnings during the first year of opera-
tion. By summer 1994, EuroDisney had lost more than $900 mil-
lion since opening. Attendance reached only 9.2 million in 1992,
and visitors spent 12 percent less on purchases than the estimated
$33 per head.
If tourists were not flocking to taste the thrills of the new Euro-
Disney, where were they going for their summer vacations in 1992?
Ironically enough, an unforeseen combination of transatlantic air-
fare wars and cu
ency movements resulted in a trip to Disneyworld
in Orlando being cheaper than a trip to Paris, with guaranteed good
weather and beautiful Florida beaches within easy reach.
EuroDisney management took steps to rectify immediate prob-
lems in 1992 by cutting rates at two hotels up to 25 percent, intro-
ducing some cheaper meals at restaurants, and launching a Paris ad
litz that proclaimed “California is only 20 miles from Paris.”
An American Icon One of the most wo
ying as-
pects of EuroDisney’s first year was that French visitors stayed
away; they had been expected to make up 50 percent of the at-
tendance figures. A park services consulting firm framed the
problem in these words: “The French see EuroDisney as American
imperialism—plastics at its worst.” The well-known, sentimental
Japanese attachment to Disney characters contrasted starkly with
the unexpected and widespread French scorn for American fairy-
tale characters. French culture has its own lovable cartoon charac-
ters such as Astérix, the helmeted, pint-sized Gallic wa
ior, who
has a theme park located near EuroDisney.
Hostility among the French people to the whole “Disney idea”
had surfaced early in the planning of the new project. Paris theater
director Ariane Mnouchkine became famous for her description
of EuroDisney as “a cultural Chernobyl.” In fall 1989, during a visit
to Paris, French Communists pelted Michael Eisner with eggs. The
joke going around at the time was, “For EuroDisney to adapt prop-
erly to France, all seven of Snow White’s dwarfs should be named
Grumpy (Grincheux).”
Early advertising by EuroDisney seemed to aggravate local
French sentiment by emphasizing glitz and size rather than
the variety of rides and attractions. Committed to maintaining
Disney’s reputation for quality in everything, more detail was built
into EuroDisney. For example, the centerpiece castle in the Magic
Kingdom had to be bigger and fancier than in the other parks.
Expensive trams were built along a lake to take guests from the
hotels to the park, but visitors prefe
ed walking. Total park con-
struction costs were estimated at FFr 14 billion ($2.37 billion) in
1989 but rose by $340 million to FFr 16 billion as a result of all
these add-ons. Hotel construction costs alone rose from an esti-
mated FFr 3.4 billion to FFr 5.7 billion.
CASE XXXXXXXXXXThe Not-So-Wonderful World of
EuroDisney * —Things Are Better Now at
Disneyland Resort Paris
*The Official name has been changed from “EuroDisney” to “Disneyland Resort Paris.”
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CONFIRMING PAGES
Cases 2 The Cultural Environment of Global Marketing
in a 350-seat restaurant [at some of the hotels]. The lines were
ho
endous. And they didn’t just want croissants and coffee, they
wanted bacon and eggs.”
In contrast to Disney’s American parks, where visitors typically
stay at least three days, EuroDisney is at most a two-day visit. En-
ergetic visitors need even less time. One analyst claimed to have
“done” every EuroDisney ride in just five hours. Typically many
guests a
ive early in the morning, rush to the park, come back
to their hotel late at night, and then check out the next morning
efore heading back to the park.
Vacation customs of Europeans were not taken into consider-
ation. Disney executives had optimistically expected that the ar-
ival of their new theme park would cause French parents to take
their children out of school in mid-session for a short
eak. It
did not happen unless a public holiday occu
ed over a weekend.
Similarly, Disney expected that the American-style short but more
frequent family trips would displace the European tradition of a
one-month family vacation, usually taken in August. However,
French office and factory schedules remained the same, with their
emphasis on an August shutdown.
In promoting the new park to visitors, Disney did not stress
the entertainment value of a visit to the new theme park; the
emphasis was on the size of the park, which “ruined the magic.” To
counter this, ads were changed to feature Zo
o, a French favorite,
Mary Poppins, and Aladdin, star of the huge moneymaking
movie success. A print ad campaign at that time featured Aladdin,
Cinderella’s castle, and a little girl being invited to enjoy a “magic
vacation” at the kingdom where “all dreams come true.” Six new
attractions were added in 1994, including the Temple of Peril,
Story book Land, and the Nautilus attraction. Donald Duck’s
irthday was cele
ated on June 9—all in hopes of positioning
EuroDisney as the number 1 European destination of short
duration, one to three days.
Faced with falling share prices and crisis talk among sharehold-
ers, Disney was forced to step forward in late 1993 to rescue the
new park. Disney announced that it would fund EuroDisney until
a financial restructuring could be worked out with lenders. How-
ever, it was made clear by the parent company, Disney, that it “was
not writing a blank check.”
In June 1994, EuroDisney received a new lifeline when a mem-
er of the Saudi royal family agreed to invest up to $500 million
for a 24 percent stake in the park. The prince has an established
eputation in world markets as a “bottom-fisher,” buying into po-
tentially viable operations during crises when share prices are low.
The prince’s plans included a $100 million convention center at
EuroDisney. One of the few pieces of good news about EuroDisney
is that its convention business exceeded expectations from the
eginning.
MANAGEMENT AND NAME
CHANGES
Frenchman Philippe Bourguignon took over at EuroDisney as
CEO in 1993 and was able to navigate the theme park back to prof-
itability. He was instrumental in the negotiations with the firm’s
ankers, cutting a deal that he credits largely for
inging the park
ack into the black.
Perhaps more important to the long-run success of the ven-
ture were his changes in marketing. The pan-European approach
to marketing was dumped, and national markets were targeted
separately. This new localization took into account the differing
EuroDisney and Disney managers unhappily succeeded in
alienating many of their counterparts in the government, the
anks, the ad agencies, and other concerned organizations. A barn-
storming, kick-the-door-down attitude seemed to reign among
the U.S. decision makers: “They had a formidable image and con-
vinced everyone that if we let them do it their way, we would all
have a marvelous adventure.” One former Disney executive voiced
the opinion, “We were