Euro Disney: Bungling a Successful Concept

W ith high expectations, Euro Disney opened just outside Paris in April 1992. Success seemed assured. After all, the Disneylands in Florida, California, and more recently, Japan, were all spectacular successes. But somehow all the rosy expectations became a delusion. The opening results cast even the future continuance of Euro Disney into doubt. How could what seemed so right be so wrong? What mistakes were made?

PRELUDE

OPTIMISM

Perhaps a few early omens should have raised caution. Between 1987 and 1991, three $150 million amusement parks had opened in France with great fanfare. All had fallen flat, and by 1991 two were in bankruptcy. Now the Walt Disney Company was finalizing its plans to open Europe’s first Disneyland early in 1992. This would turn out to be a $4.4 billion enterprise sprawling over 5,000 acres twenty miles east of Paris. Initially it would have six hotels and 5,200 rooms, more rooms than the entire city of Cannes, and lodging was expected to triple in a few years as Disney opened a second theme park to keep visitors at the resort longer.

Disney also expected to develop a growing office complex, this to be only slightly smaller than France’s biggest, La Défense, in Paris. Plans also called for shopping malls, apartments, golf courses, and vacation homes. Euro Disney would tightly control all this ancillary development, designing and building nearly everything itself and eventually selling off the commercial properties at a huge profit.

Disney executives had no qualms about the huge enterprise, which would cover an area one-fifth the size of Paris itself. They were more worried that the park might not be big enough to handle the crowds: “My biggest fear is that we will be too successful.”1

Company executives initially predicted that 11 million Europeans would visit the extravaganza in the first year alone. After all, Europeans accounted for 2.7 million visits to the US Disney parks and spent $1.6 billion on Disney merchandise. Surely a park in closer proximity would draw many thousands more. As Disney executives thought more about it, the forecast of 11 million seemed most conservative. They reasoned that because Disney parks in the United States (population of 250 million) attracted 41 million visitors a year, if Euro Disney attracted visitors in the same proportion, attendance could reach 60 million with Western Europe’s 370 million people. Table 10.1 shows the 1990 attendance at the two US Disney parks and the newest Japanese Disneyland, as well as the attendance/population ratios.

Adding fuel to the optimism was the fact that Europeans typically have more vacation time than US workers. For example, five-week vacations are commonplace for French and Germans, compared with two to three weeks for US workers.

The failure of the three earlier French parks was seen as irrelevant. Robert Fitzpatrick, Euro Disneyland’s chairman, stated that Disney was spending 22 billion French francs to open the park, compared to the earlier competitors who spent 700 million. “This means we can pay infinitely more attention to details—costumes, hotels, shops, trash baskets—to create a fantastic place. There’s just too great a response to Disney for us to fail.”2

Nonetheless, a few scattered signs could be found that not everyone was happy with the coming of Disney. Leftist demonstrators at Euro Disney’s stock offering greeted company executives with eggs, ketchup, and “Mickey Go Home” signs. Some French intellectuals decried the pollution of the country’s cultural ambiance with the coming of Mickey Mouse and company: They called the park an American cultural abomination. The mainstream press also seemed contrary, describing every Disney setback with delight. And French officials in negotiating with Disney sought less American and more European culture at France’s Magic Kingdom. Still, such protests and bad press seemed contrived and unrepresentative, and certainly not predictive. Company officials dismissed the early criticism as “the ravings of an insignificant elite.”3

TABLE 10.1 Attendance and Attendance/Population Ratios of Disney Parks, 1990

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THE LOCATION DECISION

In the search for a site for Euro Disney, Disney executives examined 200 locations in Europe. The other finalist was Barcelona, Spain. Its major attraction was warmer weather. But the transportation system was not as good as around Paris, and it also lacked level tracts of land of sufficient size. The clincher for the decision for Paris was its more central location. Table 10.2 shows the number of people within two to six hours of the Paris site.

The beet fields of the Marne-la-Vallée area were chosen. Being near Paris seemed a major advantage, as Paris was Europe’s biggest tourist draw. France was eager to win the project to help lower its jobless rate and also to enhance its role as the center of tourist activity in Europe. The French government expected the project to create at least 30,000 jobs and to contribute $1 billion a year from foreign visitors.