EuroDisney to Disneyland Resort Paris

 

 Background

In April 1992, after the incredible success of Tokyo Disneyland in Japan, Disney was out to set up the largest theme park they have ever built to date in Paris, named EuroDisney. Paris is carefully selected from a list of potential European countries for investment after the management receives impressive data on regional demographics and incentives form the government. Paris seems to be a real estate dream comes true. However, the journey for success of this new sensation was not easy. The management has to deal with lots of issues that contributed to major financial losses to the company. Financial losses become so massive that the president has to structure a rescue package to put EuroDisney back on firm financial ground. Disney management rapidly revised its marketing plan and introduced strategic and tactical changes in hope of “doing it right” this time.

 

At the same time, Disney theme parks are enormously successful in the United States.  Families flock there at all times of the year. Disney’s best customers are repeat customers. When Tokyo Disneyland opened in 1983, it was more popular than Disney ever imagined. With one foot in to the international area, Disney decided to conquer Europe.  They scouted out possible locations and decided on an area outside of Paris, France. The deciding factors that led to France were available space, convenient location in Europe, and possibly most encouraging support from the French government.

 

Issues

Tokyo Disneyland found enormous success in Japan. The park in Tokyo has very little differences from the American Magic Kingdoms. Tokyo’s success with like change from the American parks might have led Disney executives to the misguided belief that cultural differences would not affect the success of EuroDisney. But Tokyo and Paris have some pretty critical differences. Tokyo not only has a higher concentrated population surrounding the park but the average income is higher. Probably the biggest difference is that Japan, as a country, tends to embrace American culture much more readily than the French.

 

Disney was optimistic about the success of EuroDisney and they spent lavish amounts constructing the park.  The location was prime with 310 million Europeans just a 2 hour flight away; Disney expected to make over $100 million in their first year. Almost $3 billion was spent on the park and surrounding hotels. The castle was built with extra attention to fit with its European background (where actual castles can be found).With all this hype who would expect the enormous losses EuroDisney suffered in its first year? The park lost over $900 million, not even close to the expected $100 million profit. Were there signs that Disney missed? Looking back on the sentiment of the French during the construction of the park, Disney should have been more careful. A criticism from Ariane Mnouchkine, a Paris theater director, described Euro Disney as “a cultural Chernobyl.”

 

Disney did not account for European vacation habits. Most Europeans are not willing to take their children out of school for a trip to Disney. Instead families take month long vacations in the summer. Factories and business even shut down to allow employees to take these vacations. Families did visit EuroDisney, but only as a pit stop on the way to their final vacation spot. And probably most detrimental is that families spent less time in at the park than predicted. While American families spend 3-4 days at the parks, the average stay at EuroDisney was only 1-2 days.A slumping economy also kept guests from visiting the park in the first place.

 

Disney executives also did not have a grasp of how Europeans spent their money.  Because European vacations are longer, they tend to spend their money more modestly.  Guests are not as thrilled about superfluous spending on souvenirs, and extravagant meals at the parks. The prices at Euro Disney were set higher than the American parks.The cold winters on Paris were identified as a potential problem but when asked in a meeting if Europeans would be willing to stand in the cold a Disney executive simply stated, “The Japanese do”. Japanese and Paris winters vary greatly. Paris has 3 times as many rainy days. And the average highs during winter are 5 degrees warmer in Tokyo than in Paris.

 

Disney and its advisors failed to see signs at the end of the 1980s of the approaching European recession. As one former executive said, “We were just trying to keep our heads above water. Between the glamour and the pressure of opening and the intensity of the project itself, we didn’t realize a major recession was coming”. Other dramatic events included the Gulf War in 1991, which put a heavy brake on vacation travel for the rest of that year. The fall of communism in 1989 after the destruction of the Berlin Wall provoked far-reaching effects on the world economy, National defense industries were drastically reduced among Western nations. Foreign aid was requested from the West by newly emerging democracies in Eastern Europe. Other external factors that Disney executives have cited in the past as contributing to their financial difficulties at EuroDisney were high interest rates and the devaluation of several currencies against the franc. Difficulties were also encountered by EuroDisney with regard to competition. Landmark events took place in Spain in 1992. The world’s Fair in Seville and the 1992 Olympics in Barcelona were huge attractions for European tourists.

 

French culture is rich and the French people take a lot of pride in. Paris is host to the Louvre, one of the largest museums in the world. As Spencer puts it,“The French, in general, harbor a modicum of hostility toward American culture.” The French press waged its war against Disney in time leading up to the park’s opening.  Michael Serres, a French scholar, was explicit about the damage he thought Disney would cause to French culture. One essay by Serres “If we’re not careful, we will soon lose our philosophical language and even our language for raising our children”.Serres was not alone in this point of view. Marc Lambron, a French commentator, compared Disney to Marxism and feared that Disney movies and characters would replace classic French literature. An image of Mona Lisa with Mickey Mouse ears might amuse American but disgracing this revered painting offends the French. Disney is the epitome of mass consumerism, which the French finds as a detriment to their civilization.

 

Disney entered France with and purpose and their attitude only succeeded in push the French people farther away. The people of Marne-la-Vallee (the location of EuroDisney) were never consulted about park developments.  Not only were they not involved in negotiations; they were not even kept informed. Local officials took it upon themselves to form an association to get some answers.Environment concerns were raised about Disney constructing a huge park in Marne-la-Vallee. Local ecologist worried about the “threat of irreparable damage to the region.” And farmers staged protests about the environment impact. Disney did not address any of these concerns and continued with construction, further alienating the French people.

 

Disney management’s conviction that it knew best was demonstrated by its much-trumpeted ban on alcohol in the park. This proved insensitive to the local culture because the French are the world’s biggest consumers of wine. To them a meal without unverre de rouge is unthinkable. Disney relented. It also had to relax its rules on personal grooming of the projected 12,000 cast members, the park employees. Women were allowed to wear redder nail polish than in the United States, but the taboo on men´s facial hair was maintained. “We want the clean-shaven, neat and tidy look”, commented David Kannally, director of Disney University ´s Paris branch. The “university” trains prospective employees in Disney values and culture by means of a one-and-a-half-day seminar. EuroDisney’s management did, however, compromise on the question of pets. Special Kennels were built to house visitors’ animals. The thought of leaving a pet at home during vacation is considered irrational by many French people.

 

After a bailout of EuroDisney parent company, Disney. 

The new park started to make some adjustments to attract the European audience.  The park name went through some changes and ultimately became Disneyland Paris. Park prices were lowered and hotel prices were cut by 30%. A new marketing plan targeted individual countries in advertisements. In 2001, Walt Disney Studios Theme Park was added to Disneyland Paris. This new addition was designed with the French audience in mind, and could accommodate conventions which were always more profitable than expected. Walt Disney Studios blends Disney entertainment and attractions with the history and culture of European film since French camera-makers helped invent the motion picture. Small details reflect the cultural lessons learned. Food, travel habits and all others have been changed to cater the taste and culture of the locals. With the new additions and refocused marketing plan Disneyland Paris started turning a profit and now attracts more guests than the Eiffel Tower and the Louvre combined.

 

After years of trial and error in Europe, was Disney ready to start another park?  Plans for Hong Kong Disneyland began in the early 2000s.  This time around park designers took special care to accommodate Chinese guests. A fengshui master was consulted during construction. Disney was more successful in Hong Kong but they did make some big cultural mistakes, similar to EuroDisney. Original commercials advertising the park feature a family with 2 kids. Really Disney? It didn’t come up in research that Chinese are only allowed one child?

 

 

 

 

References

 

“Disney Traditions” Disney University, Orlando, FL. February 5, 2008

 

Spencer, Earl P. “Educator Insights: Euro Disney- What Happened? What Next?” Journal of International Marketing Vol. 3, No. 3, 1995, pp.103-114

 

Amine, Lyn S. PhD. “The Not-So-Wonderful World of Euro Disney- Things are better now at Paris Disneyland” International Marketing. MKGT 38000/ 14th Ed.

 

Forman, Janis “Corporate Image and the Establishment of Euro Disney: Mickey Mouse and the French Press” Technical Communication Quarterly Vol. 7, No. 3. 1998, pp. 247-258

 

 

Questions

  1. What factors contributed to EuroDisney’s poor performance during its first year operation?

 

  1. To what degree do you think that these factors were (a) foreseeable and (b) controllable by either EuroDisney or the parent company Disney?

 

  1. What role does ethnocentrism play in the story of EuroDisney’s launch?